In this article, we will look at the 12 best stocks to buy under $50. If you want to explore similar stocks, you can also take a look at 5 Best Stocks Under $50.
Stocks have been sandwiched between inflation and an aggressive Fed. Equity investors are panicking and exiting positions in companies due to lackluster earnings and a weakening macro environment. The Fed is on track to raise interest rates by another 75 basis points in November which is expected to sink equities further. However, some analysts think that the market has already priced this in and investors may be in for a positive surprise.
“Santa Claus Rally”
Another reason why some analysts see a rally is that, historically, midterm elections have been bullish for stocks. On October 22 Dr. Ed Yardeni, president of Yardeni Research, Inc., appeared in an interview on CNBC where he built the bull case for why he sees the market entering a “Santa Claus rally” as we move into year-end. Here are some comments from Dr. Ed Yardeni:
“I think we’re gonna get another Santa Claus rally, and Santa Claus rallies are predictable and strong as a result of midterm elections. It almost really doesn’t matter which way the house or the senate go, but midterm elections no matter what have had a tendency to be very bullish and the Santa Claus rally just continues right through the next 3,6, or 12 months…
I think at this point, the market knows they’re (the Fed) gonna be doing another 75 basis points in early November, and now the market’s confused about whether it’s gonna be 75 or 50 basis points in December. I thought it was gonna be two 75s, one after the other, but now the Fed is showing some uncertainty about that. I think what the market is looking for is a pause. I don’t think they’re looking for a pivot, they’re looking for a pause. The Fed’s been awfully aggressive, 300 basis points so far since March, and now another 75 basis points in November, and I think they will go ahead with another 75 basis points in December. But I think the market knows all of that…”
Investing in stocks that trade for under $50 can be a great way to make money in the stock market. These stocks are often overlooked by investors and analysts and can help investors outperform the broad market with a relatively small investment. However, these shares are susceptible to both positive and negative volatility and investors should always bear in mind their risk tolerance. Some of the top stocks to buy now that are currently trading for less than $50 a share include Vale S.A. (NYSE:VALE), Hormel Foods Corporation (NYSE:HRL), and FirstEnergy Corp. (NYSE:FE). These stocks, among others, are discussed in detail in the article below.
Photo by Mohamed Hadji on Unsplash
Our Methodology
To determine the best stocks to buy right now that are trading for less than $50 a share, we screened for quality companies that had leading positions in their respective spaces. We preferred companies with healthy balance sheets and positive market sentiment. Along with each stock, we have mentioned the hedge fund sentiment, analyst ratings, and relevant growth catalysts which make them viable investment options to consider right now. These stocks are ranked according to their popularity among elite hedge funds.
12 Best Stocks Under $50
12. Centrus Energy Corp. (NYSE:LEU)
Share Price as of October 21: $42.74
Number of Hedge Fund Holders: 6
Centrus Energy Corp. (NYSE:LEU) is a leading provider of uranium enrichment services to the U.S. government and commercial nuclear power industry. The company has a long history of successful operations, a strong balance sheet, and an experienced management team. On September 14, Centrus Energy Corp. (NYSE:LEU) announced that it has secured new nuclear fuel sales contracts worth $320 million over the past twelve months. Centrus Energy Corp. (NYSE:LEU) is well-positioned to benefit from the continued growth of the nuclear power industry, both in the United States and around the world and is among the best stocks to buy right now.
This August, Lake Street analyst Rob Brown upgraded Centrus Energy Corp. (NYSE:LEU) to Buy from Hold and reiterated his $70 price target on the shares. On August 8, Roth Capital analyst Joe Reagor raised his price target on Centrus Energy Corp. (NYSE:LEU) to $48 from $45 and upgraded the stock to Buy from Neutral.
At the end of Q2 2022, Centrus Energy Corp. (NYSE:LEU) was spotted on 6 hedge fund portfolios that held stakes worth $14.7 million in the company. This is compared to 9 positions in the previous quarter with stakes worth $15.4 million in the company.
11. Clearwater Paper Corporation (NYSE:CLW)
Share Price as of October 21: $41.96
Number of Hedge Fund Holders: 14
Clearwater Paper Corporation (NYSE:CLW) is an American pulp and paper company headquartered in Spokane, Washington. The company operates through three segments: Pulp and Paperboard, Consumer Products, and Forest Products. Clearwater Paper Corporation (NYSE:CLW) is seeing strong demand for its products as companies around the world are looking to reduce their environmental impact. The company is well-positioned to benefit from the growing trend of consumers wanting to buy products that are made from recycled materials and is therefore one of the best stocks to buy right now.
Shares of Clearwater Paper Corporation (NYSE:CLW) are trading at bargain levels. As of October 21, the stock is trading at a PE multiple of 15x and has gained 55% over the past six months. The company has a strong cash position and has free cash flows of $137 million. This August, BMO Capital analyst Mark Wilde raised his price target on Clearwater Paper Corporation (NYSE:CLW) to $47 from $40 and reiterated an Outperform rating on the shares.
At the close of Q2 2022, 14 hedge funds were long Clearwater Paper Corporation (NYSE:CLW) and held stakes worth $55 million in the company. This is compared to 10 positions in the previous quarter with stakes worth $35.9 million. The hedge fund sentiment for the stock is positive. As of June 30, Schonfeld Strategic Advisors is the largest investor in the company and has stakes worth $14 million.
Some of the best-in-class names that investors can own for under $50 right now include Vale S.A. (NYSE:VALE), Hormel Foods Corporation (NYSE:HRL), and FirstEnergy Corp. (NYSE:FE).
10. AbCellera Biologics Inc. (NASDAQ:ABCL)
Share Price as of October 21: $10.31
Number of Hedge Fund Holders: 17
AbCellera Biologics Inc. (NASDAQ:ABCL) is a leading clinical-stage biotechnology company that discovers, develops, and manufactures therapeutic antibodies. The company’s platform enables rapid screening of natural immune responses to pathogenic and non-pathogenic proteins. The company has a strong cash position and its shares are currently attractively valued. As of October 21, the stock has a trailing twelve-month PE ratio of 15x and free cash flows of $286.76 million. AbCellera Biologics Inc. (NASDAQ:ABCL) is ranked high among the best stocks to buy now.
On August 10, Credit Suisse analyst Tiago Fauth revised his price target on AbCellera Biologics Inc. (NASDAQ:ABCL) to $34 from $40 and reiterated an Outperform rating on the shares. The stock is gaining in 2022 and, as of October 21, has gained 25% over the past six months.
At the end of Q2 2022, AbCellera Biologics Inc. (NASDAQ:ABCL) was a part of 17 investor portfolios. The total stakes of these hedge funds amounted to $320.49 million. This is compared to 17 positions in the previous quarter with stakes worth $329.16 million. As of June 30, Baker Bros. Advisors is the top shareholder in AbCellera Biologics Inc. (NASDAQ:ABCL) and has stakes worth $111.29 million in the company.
9. Northern Oil & Gas, Inc. (NYSE:NOG)
Share Price as of October 21: $34.48
Number of Hedge Fund Holders: 19
Northern Oil & Gas, Inc. (NYSE:NOG) is an oil and gas exploration and production company with a focus on the Williston Basin in the United States. Northern Oil & Gas, Inc. (NYSE:NOG) is well-positioned to capitalize on the secular tailwinds in the oil and gas industry and is ranked among the best stocks to buy now. As of October 21, the stock has surged more than 61% year to date. Northern Oil & Gas, Inc. (NYSE:NOG) is an attractive buy right now and is also awarding shareholders with dividends. As of October 21, the stock is trading at a PE multiple of 10x and is offering a forward dividend yield of 2.90%.
This October, Piper Sandler analyst Mark Lear raised his price target on Northern Oil & Gas, Inc. (NYSE:NOG) to $59 from $51 and reiterated an Overweight rating on the shares. On October 19, Jefferies analyst Lloyd Byrne took coverage of Northern Oil & Gas, Inc. (NYSE:NOG) with a Buy rating and a $37 price target.
At the close of Q2 2022, 19 hedge funds were eager on Northern Oil & Gas, Inc. (NYSE:NOG) and held stakes worth $160.4 million in the company. Of those, Angelo Gordon & Co was the most prominent investor in the company with stakes worth $31.5 million.
8. Griffon Corporation (NYSE:GFF)
Share Price as of October 21: $30.78
Number of Hedge Fund Holders: 21
Griffon Corporation (NYSE:GFF) is a leading provider of home and building products. The company has a diversified business model with a healthy balance sheet and is among the best stocks to buy now. Griffon Corporation (NYSE:GFF) is undervalued and is also paying dividends to investors. As of October 21, the stock is trading at a PE multiple of 11x and is offering a forward dividend yield of 1.17%.
Over the past three months, Griffon Corporation (NYSE:GFF) has received 2 Buy ratings from Wall Street analysts. On September 8, Raymond James added Griffon Corporation (NYSE:GFF) to its “Analyst Current Favorites” list. As of October 21, the stock has gained 62.93% over the past six months.
At the end of Q2 2022, 21 hedge funds disclosed ownership of stakes in Griffon Corporation (NYSE GFF). The total value of these stakes amounted to $218.77 million, up from $139.47 million in the previous quarter with 12 positions. The hedge fund sentiment for the stock is positive. As of June 30, GAMCO Investors is the largest shareholder in Griffon Corporation (NYSE:GFF) and has stakes worth $95.3 million in the company.
7. O-I Glass, Inc. (NYSE:OI)
Share Price as of October 21: $16.56
Number of Hedge Fund Holders: 26
O-I Glass, Inc. (NYSE:OI) is one of the world’s largest manufacturers of glass containers for the food and beverage industry. The company has a strong history of profitability and is well-positioned to continue growing its market share in the years to come. The company’s share price has been on a tear lately and is presenting an optimal buying opportunity for value investors. As of October 21, O-I Glass, Inc. (NYSE:OI) is trading at a PE multiple of 5x. The stock is ranked high among the best stocks to buy now.
On October 11, Citi analyst Anthony Pettinari raised his price target on O-I Glass, Inc. (NYSE:OI) to $15 from $14 and reiterated a Neutral rating on the shares. This October, BofA analyst George Staphos revised his price target on O-I Glass, Inc. (NYSE:OI) to $17 from $18 and maintained a Buy rating on the shares.
At the close of Q2 2022, 26 hedge funds were long O-I Glass, Inc. (NYSE:OI) and held stakes worth $228.45 million in the company. This is compared to 23 positions in the previous quarter with stakes worth $227.42 million. The hedge fund sentiment for the stock is positive. As of June 30, Abrams Capital Management is the largest shareholder in O-I Glass, Inc. (NYSE:OI) and has stakes worth $97 million in the company.
6. SM Energy Company (NYSE:SM)
Share Price as of October 21: $44.50
Number of Hedge Fund Holders: 27
SM Energy Company (NYSE:SM) is an independent exploration and production company with a focus on the upstream oil and gas sector. The company has a diversified portfolio of properties across the United States and South America. SM Energy Company (NYSE:SM) is a high-quality operator with a proven track record of delivering strong financial results and is ranked among the best stocks to buy now. The stock is currently trading at an attractive valuation and offering investors the chance to cash in on the weakness. As of October 21, the stock is trading at a PE multiple of 5x and is awarding shareholders with a dividend yield of 1.35%.
SM Energy Company (NYSE:SM) has a strong cash position and is efficiently utilizing its cash resources. On September 7, SM Energy Company (NYSE:SM) announced a share repurchase authorization of up to $500 million through year-end 2024 and a fixed dividend increase to $0.60 per share annually. The company has free cash flows of $968.68 million.
On September 19, KeyBanc analyst Tim Rezvan took coverage of SM Energy Company (NYSE:SM) with an Overweight rating and a $64 price target. As of October 21, the stock has returned 25% to investors over the past six months.
At the end of Q2 2022, 27 hedge funds held stakes in SM Energy Company (NYSE:SM). The total value of these stakes amounted to $374.6 million, up from $367.9 million in the previous quarter with 28 positions. As of June 30, Marshall Wace LLP is the largest shareholder in SM Energy Company (NYSE:SM) and has stakes worth $80.8 million in the company.
In addition to SM Energy Company (NYSE:SM), other stocks that are trading for under $50 and are on investors’ radars include Vale S.A. (NYSE:VALE), Hormel Foods Corporation (NYSE:HRL), and FirstEnergy Corp. (NYSE:FE).
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Disclosure: None. 12 Best Stocks Under $50 is originally published on Insider Monkey.
