It's understandable if some investors are wary of buying stocks this month. Some could recall that several of the biggest stock market crashes in history occurred in October. Many stocks remain expensive even though the stock market has lost much of its momentum from earlier this year.

But October has frequently been a pretty good month for the stock market. And while many stocks are priced at a premium, not all of them are. Here are three magnificent stocks that are screaming buys in October.

1. Bank of America

Most bank stocks have been hammered in 2023 by the banking crisis that erupted earlier this year. Bank of America (BAC -0.21%) is no exception. Its shares have fallen around 15% year to date.

Quite a few regional banks have heavy exposure to commercial real estate (CRE), which is a risky bet these days with so many employees working from home. Some have worrisome capital ratios -- metrics that assess banks' financial strength.

However, Bank of America isn't a regional bank. Its CRE exposure is low. The company's balance sheet remains rock-solid. BofA's business is booming, too. In the second quarter, revenue jumped 11% year over year while profits soared 19%. 

This a stock that Warren Buffett loves so much it's the second-largest holding in Berkshire Hathaway's portfolio. It's also attractively valued with shares trading at only 8.2 times expected earnings. A screaming buy in October? I think so.

2. PayPal Holdings

You might question the premise that PayPal Holdings (PYPL 2.90%) deserves to be called magnificent in any shape, form, or fashion. The digital payments stock is down nearly 20% year to date. PayPal's shares plummeted 62% in 2022.

However, I think there's a strong argument to be made that PayPal stock is significantly oversold. Wall Street certainly seems to think that's the case. The consensus 12-month price target for PayPal reflects an upside potential of close to 50%. 

PayPal's business continues to gain momentum. The company reported in August 2023 that its revenue grew by 7% year over year in the second quarter. Adjusted earnings per share jumped 24%. PayPal CEO Dan Schulman said in the Q2 buy-side conference call, "We're seeing all of our key metrics accelerate and accelerate nicely."

The long-term prospects for e-commerce and digital payments appear to be bright. PayPal has also expanded into in-store digital payments, a potential large new market for the company.

PayPal's valuation doesn't reflect all of these positives. The stock trades at a forward earnings multiple of 10.3x. That's a bargain level, in my view, in light of the company's growth prospects.

3. Vertex Pharmaceuticals

Vertex Pharmaceuticals (VRTX -0.06%) stock has soared nearly 22% year to date. Of course, that's during a period when the overall market has performed well. Vertex was also a big winner last year (vaulting nearly 32% higher) when the market tanked.

The key to Vertex's success so far has been its cystic fibrosis (CF) franchise. Vertex doesn't have any competition in treating the underlying cause of the rare genetic disease. Its closest rival is only in phase 2 testing, which means Vertex will enjoy a monopoly for at least several more years.

CF won't be Vertex's only growth driver for long, though. The company hopes to win U.S. regulatory approvals for exa-cel in treating rare blood disorders sickle cell disease and transfusion-dependent beta-thalassemia over the next few months. It also foresees a near-term commercial launch for VX-548, a powerful non-opioid pain drug.

The big biotech's prospects look even better if we fast-forward a few years. Vertex is evaluating inaxaplin in a pivotal clinical study targeting APOL1-mediated kidney disease, which impacts more patients than CF. It has three programs in clinical testing that could hold the potential to cure type 1 diabetes.

Vertex's share price, however, doesn't fully reflect the company's prospects. The stock's price-to-earnings-to-growth (PEG) ratio stands at 0.50, indicating a very attractive valuation.