Nvidia, Boeing and GE are all good buys for different reasons, Wall Street's 'dean of valuation' says

Key Points
  • Nvidia is undervalued and is a good buy for the long term, Wall Street’s “dean of valuations” Aswath Damodaran says.
  • Buy Boeing because "you can't easily substitute" for the company even though the stock was hurt by U.S.-China trade relations, he says.
  • GE "is not a turnaround story" but one of "selling off its pieces for the best prices they can get," he says.
NYU's 'dean of valuation' says stocks are undervalued, and there are 2 areas to watch

Investors can bet on names such as Nvidia, Boeing and General Electric as the markets attempt to stage a comeback, markets guru Aswath Damodaran told CNBC on Wednesday.

Known as Wall Street's "dean of valuation," Damodaran said stocks are undervalued considering the cash flows and interest rate levels.

Damodaran, who is a finance professor at New York University's Stern School of Business, said he bought shares of Nvidia in December at $145 when the stock was rocked during the fourth-quarter sell-off. The chipmaker closed at $142.58 on Wednesday, a far cry from its all-time high of $292.76 it reached last October.

"I'm still waiting to get back to $145. I might never get there, but I like the company," he said on "Fast Money." "I mean, I think that there is a real chance growth can drop off next year, but I think long term I would still buy the growth in that stock at the prices that you get them for today."

Boeing, which has surged about 20 percent since hitting a 52-week low of $292.47 the day after Christmas, is a company Damodaran thinks was "punished for all the wrong reasons" by the trade war between the United States and China. The airplane manufacturer increased its forecast last September when China agreed to buy thousands of its planes for $1.2 trillion over 20 years.

"Let's face it, you can substitute for Apple. You can't easily substitute for Boeing," he argued. "I don't think you can tar all these companies which have China exposure with the same brush."

The stock is up 8 percent so far this year, closing at $343.83 on Wednesday.

Though people have low expectations of GE, Damodaran is still buying shares of the company because the stock could see a "significant recovery" if it "plays its cards right." Last November he said that its GE Capital business is weighing on the stock, but it could be bought with a "strong stomach."

Once holding the title of America's most valuable company, the industrial conglomerate bottomed out at $6.66 during its ongoing decline in 2018. Damodaran sees opportunity there if management can "untangle the parts."

"This is not a turnaround story. This is a story of disentangling a company and selling off its pieces for the best prices they can get," he said.

GE closed at $8.50 on Wednesday.