After a brief selloff in Q1 2021, growth stocks are once again in focus. Investors can take advantage of this by investing in growth companies such as Johnson & Johnson (JNJ), Target (TGT), Dell Technologies (NYSE:), Agilent Technologies (NYSE:), and Goldman Sachs (GS) that are trading at low valuations.Growth stocks soared in 2020, with tech shares leading the way. The SPDR S&P 500 Growth ETF (SPYG) gained 78.3% from March 23rd to December 31st. When investors learned of the efficacy of the coronavirus vaccines at the end of the year, a rotation out of growth stocks took place in the market, as a rapidly improving economy benefits more cyclical and value names.
But it appears growth stocks are back in favor as the SPGY gained 6.8% last month. The value trade is taking a breather as improving economic conditions look already priced in. With many of the top growth stocks seeing their shares pullback in the winter, now is a great time to invest in growth at a lower valuation. This way, we get the best of both worlds.
So, I ran a screen for top undervalued growth stocks in our POWR Rating system for Buy-rated stocks with a Growth Grade of A or B and a Value Grade of A or B. This makes sure we see the best growth stocks at low valuations, and why I am recommending investors consider Johnson & Johnson (JNJ), Target Corporation (NYSE:), Dell Technologies Inc (DELL), Agilent Technologies, Inc. (A), and Goldman Sachs Group Inc. (NYSE:) for the second quarter.
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