In this article, we will look at the 10 cheap hot stocks to buy now. If you want to explore similar stocks, you can go to 5 Cheap Hot Stocks to Buy Now.
2022 was one of the worst years for the stock market. Supply disruptions, inventory gluts, geopolitical tensions, inflation, tight money, and a lot of other factors caused valuations of some of the biggest companies in the world to go down. Investors became wary and panicky whenever some bad news hit the markets, and triggered massive sell offs. All things concerned, it can be argued that certain businesses with solid fundamentals and compelling long-term growth stories may have been oversold.
“There Are Parts of The Market That Are Not Expensive”
On January 6, Hightower’s chief investment strategist and portfolio manager, Stephanie Link, appeared in an interview on CNBC where she talked about her view of the markets and about the “parts of the market” that “are frothy and expensive” and “parts of the market that are not expensive”. Stephanie Link thinks that “it’s not all gloom and doom” and “there are opportunities in the down draft”. Here are some comments from Stephanie Link:
“It’s not all negative. The dollar’s down 9%, that’s gonna help multinationals. Input costs are definitely falling. Rents are starting to ease a little bit. We have to keep an eye on wages, but that’s the good part for the economy, jobs. And that means consumers hanging in, and by the way wildcard, China reopening, so who knows that even is going to be happening. But it’s not all negative, and so that’s why it is a market of stocks and you have to take advantage of the winners when everybody’s looking for, you know, this is such a negative type of environment.”
Stephanie link noted that “there are definitely parts of the market that still are seeing froth” and that tight money is not good for growth and fixed-income assets. However, Stephanie Link does not see that “the market has to fall tremendously from here” and that “there are areas in the markets that are actually holding up pretty well, and it’s not just energy and financials. It’s industrials, it’s materials, parts of discretionary as well”. Stephanie Link is optimistic about the “other parts of the market and sectors that actually should benefit” as rates tend to move higher or stay higher in the foreseeable future.
We came up with a basket of stocks that have attractive valuations and outperformed the markets in the fourth quarter of 2022. These cheap hot stocks, which include Modine Manufacturing Company (NYSE:MOD), Amkor Technology, Inc. (NASDAQ:AMKR), and Olympic Steel, Inc. (NASDAQ:ZEUS), are currently presenting attractive entry points for investors, and we have discussed them, among others, in detail below.
Image by Sergei Tokmakov Terms.Law from Pixabay
Our Methodology
We screened for stocks that had a trailing twelve-month or forward PE multiple of less than 15, as well as those that gained at least 30% in the fourth quarter of 2022 (we call these stocks “hot” because of this momentum). From the wide majority of companies, we carefully selected stocks that had the lowest PE ratios, the best performance, and positive market sentiment. We have also included analyst ratings, if recent, and the hedge fund sentiment along with our picks. We have ranked these stocks in a descending order of their PE ratios, as of January 6.
Cheap Hot Stocks to Buy Now
10. Myers Industries, Inc. (NYSE:MYE)
PE Ratio as of January 6: 14.92
Performance (Q4 2022): 30.17%
Number of Hedge Fund Holders: 12
Myers Industries, Inc. (NYSE:MYE) is a global manufacturer and distributor of polymer products, agricultural and automotive parts. Headquartered in Akron, Ohio, the company has a strong presence in the agriculture and automotive markets, as well as industrial, consumer, and government markets. The company has a strong focus on innovation, which it believes is key to its success in the markets it serves. Myers Industries, Inc. (NYSE:MYE) is committed to providing the highest quality products and services to its customers.
Myers Industries, Inc. (NYSE:MYE) is one of the best cheap hot stocks to buy now. As of January 6, the stock is trading at a PE multiple of 14.92 and is offering a forward dividend yield of 2.45%. Moreover, the stock gained 30.17% in the fourth quarter of 2022. Myers Industries, Inc. (NYSE:MYE) has a strong cash position and, according to its balance sheet, the company has an FCF of $60.9 million.
At the end of Q3 2022, 12 hedge funds disclosed positions in Myers Industries, Inc. (NYSE:MYE). These funds held collective stakes of $85.9 million in the company. As of September 30, Mario Gabelli’s GAMCO Investors is the largest shareholder in the company and has a position worth $52.3 million.
Some of the best cheap hot stocks to buy right now include Modine Manufacturing Company (NYSE:MOD), Amkor Technology, Inc. (NASDAQ:AMKR), and Olympic Steel, Inc. (NASDAQ:ZEUS).
9. Vector Group Ltd. (NYSE:VGR)
PE Ratio as of January 6: 13.75
Performance (Q4 2022): 33.30%
Number of Hedge Fund Holders: 16
Vector Group Ltd. (NYSE:VGR) is a leading American tobacco company. In addition to making cigarettes, the company also manages a real estate investment business. Vector Group Ltd. (NYSE:VGR) was held by 16 elite money managers that disclosed collective positions worth $91.6 million in the company, at the end of Q3 2022.
Vector Group Ltd. (NYSE:VGR) is another cash-rich company that is committed to returning cash to shareholders. The company has free cash flows of $261.7 million and is offering a forward dividend yield of 6.51% to shareholders, as of January 6.
Vector Group Ltd. (NYSE:VGR) returned 33.30% to investors in the fourth quarter of 2022. The stock is currently trading at bargain levels and is presenting an attractive buying opportunity for investors looking for cheap hot stocks. As of January 6, the stock is trading at a PE multiple of 13x.
As of September 30, Jim Simons’ Renaissance Technologies is the leading shareholder in Vector Group Ltd. (NYSE:VGR) and has a position worth $68.9 million.
8. The ODP Corporation (NYSE:ODP)
PE Ratio as of January 6: 13.52
Performance (Q4 2022): 32.19%
Number of Hedge Fund Holders: 35
The ODP Corporation (NYSE:ODP) is a leading provider of business services, products and digital workplace solutions for SMEs. As of September 30, HG Vora Capital Management is the dominant investor in The ODP Corporation (NYSE:ODP) and has disclosed a position worth $175.75 million in the company.
On November 2, The ODP Corporation (NYSE:ODP) announced a $1 billion share repurchase program that is expected to reach completion by the end of 2025. The ODP Corporation (NYSE:ODP) is a cheap hot stock that investors should not overlook. As of January 6, the stock is trading at a TTM PE ratio of 13.52. The ODP Corporation (NYSE:ODP) gained 32.19% in the fourth quarter of 2022.
On January 6, The ODP Corporation (NYSE:ODP) announced a strategic collaboration with Indian IT company, HCLTech, by which HCLTech will provide end-to-end IT solutions for the company’s business.
At the close of the third quarter of 2022, 35 hedge funds were bullish on The ODP Corporation (NYSE:ODP) and held collective stakes of $477.4 million in the company.
7. CNH Industrial N.V. (NYSE:CNHI)
PE Ratio as of January 6: 12.63
Performance (Q4 2022): 32.19%
Number of Hedge Fund Holders: 28
CNH Industrial N.V. (NYSE:CNHI) is a global leader in the manufacturing of agricultural, construction, and commercial vehicles. The company has a strong focus on innovation and technology, investing in research and development to ensure their products are efficient and reliable. The company also believes in sustainability, aiming to reduce its environmental footprint through efficient production processes and the use of renewable energy sources.
For investors in search for a good cheap hot stock, CNH Industrial N.V. (NYSE:CNHI) presents a decent value proposition. As of January 6, the stock is trading at a PE multiple of 12x. Moreover, the stock posted gains of over 32% in the fourth quarter of 2022.
On December 20, Credit Suisse analyst Jamie Cook started coverage of CNH Industrial N.V. (NYSE:CNHI) with an Outperform rating and a $21 price target.
CNH Industrial N.V. (NYSE:CNHI) was spotted on 28 investors’ portfolios at the end of Q3 2022. These funds held collective positions worth $755 million in the company. As of September 30, Harris Associates is the top investor in the company.
6. Tecnoglass Inc. (NASDAQ:TGLS)
PE Ratio as of January 6: 11.85
Performance (Q4 2022): 34.21%
Number of Hedge Fund Holders: 15
Tecnoglass Inc. (NASDAQ:TGLS) is a leading manufacturer and distributor of architectural glass, windows, and associated products for the construction industry. In the fourth quarter of 2022, Tecnoglass Inc. (NASDAQ:TGLS) returned over 34% to investors and, as of January 6, the stock has a trailing twelve-month PE ratio of 11.85. Tecnoglass Inc. (NASDAQ:TGLS) is the sixth cheapest hot stock to buy now in this list.
On December 2, B. Riley analyst Alex Rygiel raised his price target on Tecnoglass Inc. (NASDAQ:TGLS) to $40 from $38 and reiterated a Buy rating on the shares.
On December 7, Tecnoglass Inc. (NYSE:TGLS) declared a quarterly cash dividend of $0.075 per share. The dividend is payable on January 31 to stockholders of record on December 30. As of January 6, the stock is offering a forward dividend yield of 0.97%.
At the close of Q3 2022, Tecnoglass Inc. (NASDAQ:TGLS) was spotted on 15 money managers’ portfolios that disclosed collective positions worth $81.75 million in the company. Of those, Portolan Capital Management was the most prominent shareholder in the company and held a position worth $23 million.
Like Modine Manufacturing Company (NYSE:MOD), Amkor Technology, Inc. (NASDAQ:AMKR), and Olympic Steel, Inc. (NASDAQ:ZEUS), Tecnoglass Inc. (NASDAQ:TGLS) is presenting an attractive entry point for investors that are on the lookout for cheap hot stocks.
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Disclosure: None. 10 Cheap Hot Stocks to Buy Now is originally published on Insider Monkey.