The Morning Filter 4 Cheap Stock Picks We Still Like for 2026
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Dec 22, 2025 Dave Sekera, Morningstar's Chief U.S. Market Strategist, shares insightful stock analysis and investment philosophy. He reflects on the importance of reviewing past stock picks and the lessons learned from wins and losses. Dave discusses several companies, including Baxter's challenges, Alphabet’s strong fundamentals due to AI innovations, and AMD’s strategic partnerships. He wraps up by highlighting four undervalued stocks for 2026: Biogen, Microsoft, LPL Financial, and Devon Energy, showcasing their potential for future gains.
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Long-Term Intrinsic Value Focus
- Morningstar focuses on long-term intrinsic value, not short-term trading gains.
- Dave Sekera defines intrinsic value as the discounted present value of future free cash flows and seeks safety margins.
Make A Yearly Stocks Review
- Review yearly stock calls to learn what worked and improve accountability.
- Use watchlists and Morningstar tools to monitor valuation and star-rating changes over time.
Baxter's Multi-Year Struggle
- Baxter faced supply-chain issues and inflation that crushed margins and delayed a turnaround.
- Sekera notes Baxter now trades at half Morningstar's fair value but requires patience for recovery.