If you’re looking to grow your money smartly in 2025, 5-star stocks may be your best bet. These stocks are chosen through a mix of analyst-driven rating, deep financial data, and real equity analysis. In this guide, you’ll find everything you need to know about 5-star stocks, including how they work, why they matter, and which ones are hot right now in the US stock market and globally. Whether you’re new to value investing or looking to level up your strategy, this article will give you the edge.
You can also explore more financial deep-dives and stock-related topics on our Blog Section.
Why 5-Star Stocks Matter in 2025
Investors love 5-star stocks because they offer a smart path to a long-term investment strategy. These stocks are given a star rating based on how far their market price is from the fair value estimate. A 5-star stock is often trading at a discount, which means it could be a great deal.
In 2025, with rising interest rates and global market changes, finding undervalued companies is more important than ever. Ratings like the Morningstar Rating help you discover shares trading below fair value, based on a forward-looking measure built by independent analysts. This helps take emotion out of investing and adds a layer of trust to your decisions.
How We Chose These 5-Star Stocks
Our selection process is based on detailed investment research and stock screeners that scan the entire US stock market. We focus on companies with strong fundamentals, reliable dividend yield, and room for growth. Each company here is also on the Best Investments list created by Morningstar Investor.
We’ve reviewed hundreds of stock recommendations and picked those with a material discount to their fair value estimate. We also looked at their sector performance, business models, and market capitalization. Each stock included below fits the criteria of a high conviction stock with a healthy risk rating for 2025.
Market Outlook: Are U.S. Stocks Still Undervalued?
Despite recent gains, many stocks are still trading at a discount in the US stock market. Rising interest rates and global supply chain issues have caused prices to drop below fair value in many sectors like basic materials, healthcare stocks, and communication services.
Here’s a quick snapshot of sectors with the most undervalued stocks right now:
Agilent Technologies (A Growth Pick in Life Sciences)
| Sector | Average Discount to Fair Value | Risk Level |
|---|---|---|
| Technology Sector | -20.3% | Medium |
| Healthcare Stocks | -25.8% | High |
| Consumer Cyclical Stocks | -18.5% | Very High |
| Industrials and Real Estate | -16.9% | Medium |
| Basic Materials Sector | -24.2% | Very High |
Agilent Technologies is a leader in the life sciences space and earns its 5-star stock status with a strong track record. The company creates advanced lab tools used in drug development and disease detection. It has a steady dividend yield and healthy growth outlook.
This creates a big opportunity for value investing, especially for those who are patient and looking at market trends 2025.
The fair value analysis by Morningstar Investor shows that Agilent is trading at a discount, which makes it one of the top long-term stock picks for global investors. Its strong foothold in biotech and medical research boosts its status in the healthcare stocks sector.
Akamai Technologies (Cybersecurity & Cloud Powerhouse)
Akamai Technologies is known for its edge computing and cloud security. It currently sits on the Best Investments list due to strong earnings and global demand for online security. Analysts give it a medium risk rating but high upside potential.
It’s one of the few technology sector stocks that is trading at a discount with reliable cash flow. According to Morningstar Rating, Akamai still has room to grow, especially as more businesses shift to the cloud in 2025.
Bio-Techne (Biotech Backed by Fundamentals)
Bio-Techne is a rising name in biotech, offering essential tools for laboratories and drug makers. Its analyst-driven rating puts it in the 5-star stocks category due to a sharp drop in share price despite strong business results.
The company shows excellent financial data and low debt, which makes it a top pick among undervalued companies in the healthcare stocks segment. Long-term growth and innovation are strong selling points for investors looking for smart, medium risk investments.
Edison International (A Utility with Clean Energy Ambitions)
Edison International supplies power to millions and is shifting to clean energy. Its earnings are stable, and it provides a decent dividend yield, making it a safe long-term investment.
With rising fuel prices and demand for renewables, Edison is positioned to benefit from the green energy wave. Its stock is trading at a discount to the fair value estimate, making it appealing for income-focused portfolios.
Globant (AI & Digital Transformation Leader)
Globant is a top name in AI, digital transformation, and enterprise software. The company has global operations and works with big names like Google and Disney. Its strong revenue growth puts it on the Best Investments list.
It’s a standout in the technology sector, with an expanding client base and increasing earnings. Independent analysts believe it’s a high conviction stock, even with high volatility in tech. Its forward-looking measure shows massive upside potential by 2025.
Hewlett Packard Enterprise (HPE: Quiet Tech Comeback)
Hewlett Packard Enterprise is seeing a comeback with its GreenLake cloud services and edge computing growth. After years of being overlooked, it’s now trading at a discount, which pushed it into 5-star stock territory.
The fair value analysis supports its status as an undervalued player in the technology sector. Investors seeking stock recommendations with upside and low price risk should keep HPE on their radar.
James Hardie (Building Materials with Global Reach)
James Hardie makes smart siding and building solutions. It’s known for innovation in sustainable materials. The stock took a hit during housing slowdowns but remains solid in its business.
The company shows strong sector performance in the industrials and real estate group. Analysts say it’s trading at a premium in some regions but still shows long-term investment appeal due to global expansion.
Manhattan Associates (Supply Chain Tech Titan)
Manhattan Associates offers powerful software for supply chain management. With ongoing global shipping delays and logistic needs, it’s a top player in solving these problems.
Its stock is currently trading at a discount, but earnings are growing fast. With solid market capitalization and a strong product roadmap, it’s one of the most promising 5-star stocks in the technology sector.
Hidden Gems: 5-Star Stocks Flying Under the Radar
Some of the best 5-star stocks are not household names. These hidden gems often fly under the radar because they aren’t covered heavily in mainstream media. Yet, they carry strong fundamentals, smart leadership, and a record of innovation. One example is Rentokil Initial, a pest control leader expanding globally, now seen as a high conviction stock in the consumer cyclical stocks space.
These companies might have lower market capitalization, but their steady performance and strong fair value analysis make them attractive. Investors using stock screeners from tools like Morningstar Investor can uncover these undervalued companies trading far below their fair value estimate. Don’t ignore them—many turn out to be the best performers over time.
4 Long-Term Stocks to Buy on the Dip
In 2025, some well-known names are down but not out. These stocks are trading at a discount due to temporary problems, not long-term weakness. For instance, Taiwan Semiconductor, a global chip leader, has seen high volatility, but demand remains strong. Similarly, Target and Teradyne are also showing resilience despite recent dips in price.
These are classic long-term stock picks with solid earnings, positive sector performance, and strong dividend yield. Their temporary setbacks offer chances for value investing, especially for those looking to buy into medium risk investments during market pullbacks. Buying now means positioning for growth when recovery kicks in.
The 5 Best 5-Star Stocks to Buy Right Now
If you’re short on time and want quick action, these five 5-star stocks deserve your attention in 2025. They combine strong fundamentals, low valuations, and high potential returns.
| Company | Sector | Discount to Fair Value | Dividend Yield |
|---|---|---|---|
| Nike (NKE) | Consumer Cyclical | -20.8% | 1.2% |
| Roche Holding (RHHBY) | Healthcare | -24.5% | 2.8% |
| Anheuser-Busch (BUD) | Consumer Defensive | -22.1% | 1.5% |
| Ambev (ABEV) | Consumer Defensive | -18.9% | 4.3% |
| Rentokil (RTO) | Industrials | -19.7% | 2.1% |
All these companies are listed on the Best Investments list and have been rated using the Morningstar Rating system. Each one offers a different flavor of growth, safety, and stock volatility control.
How to Build a Portfolio with 5-Star Stocks
A strong portfolio balances risk and reward. Including 5-star stocks from different sectors like the technology sector, basic materials sector, and healthcare stocks helps you stay protected against market swings. Diversifying by market capitalization and dividend yield ensures you’re not relying on just one company or type of asset.
Use investment research tools like stock screeners to check ratings, track the price-to-earnings ratio, and measure sector performance. Your goal is not just to collect stocks with high ratings, but to build a portfolio that fits your goals, risk tolerance, and time frame. That’s what makes it a long-term investment strategy.
Key Metrics to Watch in 5-Star Stocks
When choosing 5-star stocks, it’s not just about ratings. You should also look at real numbers. These financial data points help tell the full story:
| Metric | What It Tells You |
|---|---|
| Fair Value Estimate | If a stock is under- or over-valued |
| Dividend Yield | Income potential from holding shares |
| P/E Ratio | How expensive the stock is vs earnings |
| Market Cap | Company size and investor confidence |
| Risk Rating | Volatility and investment safety |
These metrics support your equity analysis and help ensure you’re buying undervalued stocks that are likely to rebound or grow.
Stocks That Upgraded from 3-Star to 5-Star in 2025
Some stocks make major moves in ratings. A jump from 3 stars to 5 shows that a stock is now trading at a discount after being overpriced or ignored. Adient PLC, for example, is now considered undervalued due to shifts in the consumer cyclical stocks sector. This kind of change usually reflects better earnings or new company direction.
Such upgrades are a great signal for value investing. Use tools like Morningstar Investor to catch these movements early. They often mark the beginning of a strong upside trend, especially if supported by strong fair value analysis and improving sector performance.
Expert Tips: When to Buy and When to Hold
Knowing when to buy or hold a 5-star stock takes patience and knowledge. Experts suggest buying when a stock falls below its fair value estimate, especially if it’s on the Best Investments list. That means it’s trading at a discount and likely to rise again as the market corrects.
But don’t rush. Stock volatility is normal. Focus on whether the business is solid, and ignore short-term noise. Hold through dips if the fundamentals remain strong. This approach makes you a smarter, more confident investor using real investment research instead of guessing.
Final Thoughts: Investing Smarter with 5-Star Stocks
Smart investors don’t just chase trends—they follow facts. With the right knowledge, you can find undervalued companies, track market trends 2025, and build wealth over time. This is where 5-star stocks truly shine. They’re rated using expert analyst price targets, tested through real data, and chosen for their upside.
Don’t forget to use platforms like Morningstar Investor, take advantage of a free 7-day trial, and study independent analysts who do the hard work for you. It’s the key to making strong decisions, building a powerful portfolio, and mastering value investing the right way.
📘 Frequently Asked Questions (FAQs)
What are 5-star rated stocks?
5-star rated stocks are those trading below their fair value estimate, offering strong upside potential based on analyst-driven rating and deep financial data.
What are 5 good stocks to buy?
In 2025, top picks include Nike, Roche, Anheuser-Busch, Ambev, and Rentokil — all trading at a discount and listed on the Best Investments list.
What stocks have a 5-star Morningstar rating?
Stocks like Agilent, Akamai, Bio-Techne, Globant, and HPE currently hold a Morningstar Rating of 5 stars due to their equity analysis and market trends 2025.
What are the top 7 stocks to buy?
Besides the 5-star picks, consider Taiwan Semiconductor and Target — both show value investing potential and are considered long-term stock picks.
What are the top 20 stocks to buy?
Look across sectors: technology, healthcare, basic materials, and consumer cyclical stocks to find undervalued stocks backed by strong risk rating and analyst price targets.
