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One S&P 500 sector that is heavily populated with underpriced stocks is healthcare and, specifically, the sub-sector of pharmaceuticals. The most extreme example of that is Pfizer (PFE), trading at 9 times earnings. Even Merck (MRK), maker of the world’s largest selling drug, Keytruda, trades at a lowly P/E of 13, excluding one-time charges. (Keytruda does lose patent protection in 2028.)

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