What Is A Good Cheap Stock To Buy Right Now
When markets swoon and stock prices drop across the board, smart traders know there are deals to be had. But picking the right stock to buy is tough: How do you decide which ones are poised to bounce back?
what is a good cheap stock to buy right now
Buying the dip is not a simple trading strategy and should be approached cautiously. Done right, you can earn a fat discount on stocks with sound fundamentals and strong prospects. Think of it like buying quality stocks at a discount.
The truth is that many great companies get dinged in short-term market drops but tend to perform very well over time. When you know which metrics of quality to track to uncover cheap stocks to buy, you can pick winners that the market may reward with higher prices after the dip.
We have identified nine cheap stocks to buy that have fallen along with the S&P 500 over the last year and have yet to recover. Each company has a multiyear history of growing earnings per share (EPS) and revenue, and analysts are still expecting similar growth in the years ahead.
Back in 2021, SPWH entered a merger arrangement with Great Outdoors Group, but the deal was called off due to regulatory challenges. The stock price sank as much as 55% over the next year as investors who were expecting the merger sold out. Shares of SPWH remain about 49% below their all-time highs from 2020.
While shares of UMC have gained more than 300% over the last five years, the stock is currently trading 31% below its 2021 all-time high. Over the last decade, UMC has seen multiple declines of 30% to 50%, and the pullbacks ended up being excellent entry points to buy the dip.
Please note that the stocks above were selected by an experienced financial analyst, but they may not be right for your portfolio. Before you decide to purchase any of these stocks, do plenty of research to ensure they are aligned with your financial goals and risk tolerance.
Cory has been a professional trader since 2005, and holds a Chartered Market Technician (CMT) designation. He has been widely published, writing for Technical Analysis of Stock & Commodities magazine, Investopedia, Benzinga, and others. He runs TradeThatSwing.com, has authored several trading courses and books, coaches individual clients, and regularly trades stocks, currencies, and ETFs.
Stocks trading under $10 can be attractive for investors looking to scoop up some cheap shares. Unfortunately, quality stocks in that price range are few and far between, and they can be red flags that something serious is wrong with a company. Many of these stocks have challenged underlying business models or difficult near-term outlooks. Fortunately, the CFRA Research analyst team has identified these cheap, high-quality stocks that could be excellent buying opportunities in 2023.
Nokia is a telecom equipment and digital map data vendor that also licenses intellectual property to third parties. Analyst Keith Snyder says 5G investment momentum in North America and China is a bullish catalyst for Nokia, and he expects the global 5G upgrade cycle will be larger and longer than previous cycles. Nokia lost North American mobile network market share in 2022, but management says it can regain lost share and outgrow the overall industry this year. Snyder expects a rebound year for Nokia in 2023. CFRA has a "buy" rating and $6.50 price target for NOK stock, which closed at $4.59 on March 22.
Telefonica is the leading telecom company in Spain. Analyst Adrian Ng says Telefonica's acquisitions of Germany's E-Plus and Brazil's GVT, along with its exit from Central America, have helped strengthen its top businesses and improve its balance sheet. In addition, its deal to combine U.K. telecom assets into a joint venture with Liberty Global PLC (LBTYA) will provide 2.5 billion pounds ($3.1 billion) in cash. Ng expects Telefonica will generate about 3% earnings before interest, taxes, depreciation and amortization growth in 2023, the high end of the company's guidance range. CFRA has a "buy" rating and $4.50 price target for TEF stock, which closed at $4.09 on March 22.
Carnival is the world's largest cruise line operator. Carnival investors experienced a near worst-case scenario when the entire cruise industry was completely shut down for more than a year during the worst stages of the COVID-19 pandemic. Carnival shares are down 82.3% from Jan. 1, 2020 through March 22, 2023, but analyst Razak Ashman says it may finally be time to buy the dip. Ashman says Carnival's recent operating trends are strong, and he projects pent-up demand will drive 16% compound annual revenue growth over the next five years. CFRA has a "buy" rating and $12.40 price target for CCL stock, which closed at $8.99 on March 22.
Aegon is a Dutch insurance company that offers insurance, savings, pension, and investment products and services around the world. Analyst Jeff Lye says Aegon has an attractive track record of execution and is positioned to significantly deleverage its balance sheet and generate 600 million euros ($653 million) in free cash flow in 2023. Lye is bullish on the company's strategy of focusing on assets that generate attractive returns on capital and reduce capital ratio volatility. In addition, he says the company's commitment to capital returns makes it a shareholder-friendly investment. CFRA has a "buy" rating and $7 price target for AEG stock, which closed at $4.23 on March 22.
Telecom Italia is the leading fixed-line and wireless telecom provider in Italy. The company plans to split off its network business into a separate company, and Ng says merger and acquisition news will remain the primary catalyst for Telecom Italia as the company divests assets to reduce its debt. KKR & Co. Inc. (KKR) has reportedly made a nonbinding offer to buy Telecom Italia's network business in a deal valued at about 20 billion euros ($21.8 billion). Competition in Italy remains fierce, but Telecom Italia's Brazil business has been an attractive growth source. CFRA has a "buy" rating and $3.50 price target for TIIAY stock, which closed at $3.19 on March 22.
iQiyi is a leading Chinese streaming video platform that is often compared to U.S. streaming platform Netflix Inc. (NFLX). Analyst Nazira Abdullah says iQiyi has differentiated premium and on-demand content, and its tiered membership services allow it to monetize a wide range of customers. The company is on track for its first profitable year in 2023 after years of growing its subscriber count, online advertising revenues and content distribution. Abdullah says recent cost-cutting has demonstrated iQiyi's ability to maintain subscriber growth even when tightening its profitability belt. CFRA has a "buy" rating and $8.50 price target for IQ stock, which closed at $6.92 on March 22.
Crescent Point Energy is a Canadian oil and gas exploration and production company that has assets in Western Canada, Utah and North Dakota. Global energy shortages coupled with commodity price inflation have led to record energy sector profits. Analyst Jonnathan Handshoe says Crescent Point has taken advantage of the favorable environment by significantly reducing debt. He projects nearly 1.34 billion Canadian dollars ($980.6 million) in excess cash flow in 2023. CFRA has a "buy" rating and CA$11 ($8.05) price target for CPG stock, which closed at $6.60 on March 22.
Rocket Lab is an aerospace and defense company that specializes in launch services, spacecraft engineering and design, components manufacturing, and other spacecraft management solutions. Analyst Keith Snyder says Rocket is a top launch provider for customers with small payloads. Snyder says Rocket has a better track record of successful launches than smaller competitors and can offer customers more orbit flexibility than SpaceX and other larger competitors. Finally, he says Rocket Labs is positioned to reduce launch costs as it works to make its Electron rocket reusable. CFRA has a "buy" rating and $8 price target for RKLB stock, which closed at $3.85 on March 22.
With any investment, there is a degree of risk as well as return. When deciding which cheap stocks to buy, here are key factors to keep in mind: P/E ratio, price-to-book value, cash flow and earnings reports.
Earnings reports offer a wealth of information on companies, including their profits and losses. They also note whether a company performed as expected for a given period. Digging into past earnings reports can help you anticipate future performance and decide whether cheap dividend stocks are a good buy.
In that case, stocks that trade at a relatively low multiple of earnings with good growth may do better than the hypergrowth yet profitless tech stocks that dominated over the past five to 10 years, because of the effect of interest rates on growth stock valuations.
Fortunately, despite strong year-to-date gains, there are still ample opportunities to find low-priced, high-quality stocks throughout the market. Here are three names -- two in the tech space, and one natural gas producer -- that should reward shareholders handsomely in the year ahead.
If you think 20 times earnings is a small price to pay for an artificial intelligence leader, Super Micro Computer (SMCI 2.79%) is also leveraged to big AI trends, and its stock only trades at 7.25 times earnings! Even more remarkable, that cheap valuation remains even after the stock more than doubled over the past year. So Super Micro didn't benefit from a multiple rerating -- its success is all related to earnings growth.
One screamingly cheap and shareholder-friendly natural gas stock is CNX Resources (CNX 0.25%), a U.S. natural gas driller that operates in Pennsylvania, West Virginia, and Ohio, and owns 2,600 miles of gas gathering pipelines and other processing facilities.
In this article, we discuss the 11 best cheap stocks to buy, according to billionaire Dalio. If you want to see more stocks in his portfolio, go to the 5 Best Cheap Stocks To Buy According To Billionaire Dalio. 041b061a72