In this article, we will take a look at the 10 dirt cheap stocks to buy. To see more such companies, go directly to 5 Dirt Cheap Stocks To Buy.
Amid a disastrous 2022 some analysts and market pundits are predicting a market rebound in late 2023 or 2024. Historically, market declines have given a golden opportunity for investors to pile into stocks before they rebound to higher valuations. As inflation begins to show signs of cooling in the US, the Federal Reserve might begin to ease monetary policy in 2023 and eventually halt rate hikes. In a Bloomberg survey, about 70% of the top global investors said they expected stocks to rise in 2023.
However, there seems to be a consensus among market analysts that we are set to face a recession this year. A Bloomberg Economics model shows a 100% probability of recession starting by August 2023, and some market experts believe the market slowdown would not cause central banks to take any unexpected action. The Bloomberg report quoted Deutsche Bank Private Bank’s global chief investment officer Christian Nolting, who thinks that policymakers in the US and Europe are now “resigned” to weaker economic growth in 2023. The analyst said that recession might be short but “will not be painless.”
Despite the possible market situation in 2023 or beyond, the fact remains that successful investors always ignore short-term volatility when investing and pile into solid stocks when they are trading at lower prices. Sooner or later the stock market is expected to turn the corner. When it does, only those investors would come out as winners who had invested when things were bad.
JPMorgan said in a latest report that P/E ratios are much closer to fair value than they have been in recent years. This is one of the biggest benefits of the latest market correction. Talking about the US stock market, JPMorgan said that its expected return in 2023 from US equities increased from 4.1% to 7.9% in U.S. dollar terms. The firm noted that in its last year’s forecast, valuations were a significant headwind. But current earnings multiples give a much better starting point.
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Our Methodology
For this article we scanned Insider Monkey’s database of 920 elite hedge funds’ holdings and picked 12 stocks that are priced under $15 as of January 12. Most of the companies that are profitable in this list have a PE ratio of under 15. For loss-making companies, we have mentioned the growth catalysts and analyst ratings that justify our claim of “dirt cheap” since these companies present an attractive entry point for investors who want to reap profits in the long term.
The list is ranked in descending order of stock prices.
Dirt Cheap Stocks To Buy
10. Asana, Inc. (NYSE:ASAN)
Price as of January 12: $14.04
P/E Ratio: N/A
Number of Hedge Fund Holders: 26
Asana is a software company that is famous for its SaaS-based project management platform. Asana, Inc. (NYSE:ASAN) has a growing list of customers including big names like Spotify and Accenture. Asana, Inc. (NYSE:ASAN)’s founder and CEO is Dustin Moskovitz, who also cofounded Facebook (now Meta Platforms). The executive, who owns about half of Asana, Inc. (NYSE:ASAN), also reported some insider buying. In September, Moskovitz purchased 19.273 million shares of Asana, Inc. (NYSE:ASAN) at $18.16 per share, higher than January 12 price of $14.
For the third quarter, Asana, Inc. (NYSE:ASAN) posted revenue of $141.44 million, which surpassed analyst estimates by $2.42 million.
9. UiPath Inc. (NYSE:PATH)
Price as of January 12: $13.59
P/E Ratio: N/A
Number of Hedge Fund Holders: 26
UiPath Inc. (NYSE:PATH) is a software company that is operating in the high-growth segment of robotic process automation. UiPath Inc. (NYSE:PATH) was hammered in 2022, losing about 65% in value over the past 12 months. However, UiPath Inc. (NYSE:PATH) has a great chance for a rebound amid the automation wave that is taking over the world. The RPA industry is expected to reach about $44 billion in value by 2029 and UiPath Inc. (NYSE:PATH) is a leader in this space. Major companies, including Uber, General Electric, Autodesk, Virgin, Google, among others, use UiPath products for automation.
UiPath’s third quarter results were strong. Revenue in the period came in at $262.74 million, beating the Street estimates by $6.81 million. Net new ARR came in at $67 million in the period, which showed a 38% growth on a YoY basis.
A total of 26 hedge funds tracked by Insider Monkey reported having stakes in UiPath Inc. (NYSE:PATH).
8. Ford Motor Company (NYSE:F)
Price as of January 12: $13.43
P/E Ratio: 6.07
Number of Hedge Fund Holders: 47
Ford is one of the best cheap stocks to buy. The US automaker is slowly but surely gaining a significant market share of the lucrative EV market. Ford Motor Company (NYSE:F) now ranks at the second spot, behind Tesla, in terms of EV sales in the US. Ford Motor Company (NYSE:F)’s truck sales are also strong. Its F-series truck was the best-selling truck in the US in 2022, notching the award for the 46th straight year.
Hedge funds are bullish on this cheap stock. As of the end of the third quarter, 46 hedge funds tracked by Insider Monkey reported having stakes in Ford. The total value of these shares was $1.2 billion. The biggest stakeholder of Ford Motor Company (NYSE:F) at the end of September 2022 was Ken Fisher’s hedge fund, which had a $504 million stake in Ford Motor Company (NYSE:F).
7. Coursera, Inc. (NYSE:COUR)
Price as of January 12: $13.07
P/E Ratio: N/A
Number of Hedge Fund Holders: 22
Online course platform Coursera ranks 8th in our list of the best dirt cheap stocks to buy now. Coursera, Inc. (NYSE:COUR) has a long-term growth potential since it has a strong position in the online education market which is set to grow as more and more people opt to upskill themselves. Coursera, Inc. (NYSE:COUR) also collaborates with over 275 top universities and businesses to offer an online education.
In the third quarter, Coursera, Inc. (NYSE:COUR)’s revenue jumped 9.3% QoQ to $136.3 million, up from $109.0 million a year ago.
As of the end of the third quarter, 22 hedge funds tracked by Insider Monkey reported having stakes in Coursera. Gilchrist Berg’s Water Street Capital has a $12.2 million stake in Coursera, Inc. (NYSE:COUR).
Here is what ClearBridge SMID Cap Growth Strategy has to say about Coursera, Inc. in its Q3 2021 investor letter:
“We also added two positions in the IPO aftermarket, (one is) online education portal Coursera. Coursera, which makes academic courses from some of the world’s leading universities available through its platform and offers online degree programs, saw its shares trade lower following its March IPO but has seen significant uptake for its services since the onset of COVID.”
6. NIO Inc. (NYSE:NIO)
Price as of January 12: $11.81
P/E Ratio: N/A
Number of Hedge Fund Holders: 26
There has been a lot of hype around Chinese EV company NIO Inc. (NYSE:NIO) over the past few years. While some have lost hope on NIO Inc. (NYSE:NIO), some believe the stock is set for a rebound. In December, Morgan Stanley gave bullish comments about Nio despite the company giving a weak Q4 forecast. Morgan Stanley said in a report that the guidance should not trigger a sharp selloff because the “fallout from China’s reopening should be sector-wide and likely transitional.” The bank said that in the near future it expects the market to “refocus on the pace of resurgence in store traffic/order intake.” Morgan Stanley reiterated its Overweight rating on NIO Inc. (NYSE:NIO) and gave a $16.10 price target for Nio.
As of the end of the third quarter, 26 elite hedge funds of the 920 funds tracked by Insider Monkey reported having stakes in NIO Inc. (NYSE:NIO), compared to 25 funds in the previous quarter. The total value of these stakes is $519 million.
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Disclosure: None. 10 Dirt Cheap Stocks To Buy is originally published on Insider Monkey.
