In this article, we will take a look at the 13 cheap new stocks to buy.
Global markets were rattled by the market crash of 2022 whose reverberations are expected to affect equities for several months to come. However, prudent investors always invest for the long term and an equities downturn is perceived by them as an opportunity. While there’s a consensus that the world will see a recession in 2023, major analysts believe it’ll be a short one. For example, JPMorgan said in its 2023 market outlook report that the global economy is expected to see “substantial” improvement in inflation levels and a pause in rate hikes. The report said that US stocks returns will be driven by earnings but will continue to see caps due to market volatility.
JPMorgan also said that the Federal Reserve is expected to conclude its rate hike spree in the first quarter of 2023. This would cause yields to stabilize and interest rate volatility to decline.
The JPMorgan report also said that the outlook for earnings for US stock would depend “on the evolution of economic growth.” If the economy manages to avoid a recession, JPMorgan expects earnings growth to remain flat when compared to 2022. If, however, the economy enters a recession the report said “history suggests earnings could decline by as much as 15%–20%.”
JPMorgan is not alone in its optimistic calls related to inflation. WisdomTree Investments, in a latest report, said that it believes inflation in the US has reached its “zenith” and would continue to decrease in 2023. The firm, however, said that bringing inflation back to the 2% threshold set by the Federal Remains “may remain elusive” due to the service sector.
The IPO space got hammered in 2022 due to the macroeconomic backdrop as companies chose not to enter the stormy waters. A Bloomberg report in December said that just $207 billion were raised in 2022 from public listings, a whopping 68% drop when compared to 2021. The report quoted Edward Byun, co-head of Asia ex-Japan equity capital markets at Goldman Sachs Group Inc., who thinks that “stability” around inflation and visibility on the trajectory for interest rate hikes is needed for the activity in the IPO markets to return.
Photo by Ruben Sukatendel on Unsplash
Our Methodology
For this article, we used stock screeners to first list down growth stocks that went public in the past two years. From these we selected stocks that have lost at least 10% in value over the past six months as of January 22. The result was a long list of stocks. To find cheap stocks whose valuations look depressed when compared to their actual value, we picked 13 of these stocks which have long-term growth catalysts and attractive valuations. These stocks look cheap when analyzed based on their long-term gains in light of their strong growth catalysts. Many of these new stocks are also popular along the 920 elite hedge funds tracked by Insider Monkey. To justify our claim of “cheap”, in addition to the stock price declines of these stocks, we have also discussed their growth catalysts and positive analyst ratings which indicate these companies might perform very well in the months and years to come.
The list is ranked in descending order of stock prices.
Cheap New Stocks To Buy
13. Acrivon Therapeutics, Inc. (NASDAQ:ACRV)
Price: $12.42
Price Decline Over the Past Six Months: 15%
Number of Hedge Fund Holders: N/A
Founded in 2018, Acrivon Therapeutics, Inc. (NASDAQ:ACRV) is a Massachusetts-based biotech company that is working on oncology products. Acrivon Therapeutics, Inc. (NASDAQ:ACRV) went public back in November 2022. Acrivon Therapeutics, Inc. (NASDAQ:ACRV) finished its first session about 33% after its $94 million IPO. Acrivon Therapeutics, Inc. (NASDAQ:ACRV) main drug candidate is ACR-368. Acrivon Therapeutics, Inc. (NASDAQ:ACRV) is making efforts to advance the drug into Phase 2 testing for the treatment of bladder, endometrial and ovarian cancers and HPV+ tumors. Acrivon Therapeutics, Inc. (NASDAQ:ACRV) also claims to have developed a diagnostic solution called OncoSignature to help identify which patients would benefit from the drug.
Acrivon Therapeutics, Inc. (NASDAQ:ACRV)’s website says its pipeline is focused on advanced asset targeting the DNA Damage Response (DDR) and cell cycle regulation with demonstrated, durable single agent clinical activity in solid tumors.
12. Samsara Inc. (NYSE:IOT)
Price: $12.01
Price Decline Over the Past Six Months: 10%
Number of Hedge Fund Holders: 23
Samsara Inc. (NYSE:IOT) is an IoT company that offers solutions for fleet management. Last month, Samsara Inc. (NYSE:IOT) shares jumped more than 20% after the company crushed estimates for Q3 and gave full-year 2022 forecast that surpassed analyst estimates. RBC said in a note to investors that Samsara Inc. (NYSE:IOT) managed to beat estimates despite a challenging macro environment.
“While macros remain uneven, management highlighted the quick time to value and meaningful ROI as key factors in delivering durable results,” RBC added.
Samsara Inc. (NYSE:IOT) went public in December 2021.
As of the end of the third quarter, 23 hedge funds tracked by Insider Monkey reported having stakes in Samsara Inc. (NYSE:IOT), compared to 17 funds in the previous quarter.
11. Udemy, Inc. (NASDAQ:UDMY)
Price: $11.01
Price Decline Over the Past Six Months: 12%
Number of Hedge Fund Holders: 12
Online education and courses company Udemy, Inc. (NASDAQ:UDMY) went public in 2021. It is one of the best cheap new stocks to buy as it has strong growth prospects. In December, Cantor Fitzgerald called Udemy, Inc. (NASDAQ:UDMY) one of its top picks for 2023. The firm believes that Udemy, Inc. (NASDAQ:UDMY) is widely discounted when compared to the overall software sector. Cantor’s analyst Brett Knoblauch believes Udemy, Inc. (NASDAQ:UDMY) is trading at 1.1 times enterprise value-to-sales, which would represent a 77% discount to the broader software sector. Cantor Fitzgerald also said that Udemy, Inc. (NASDAQ:UDMY) is “flush with cash” at roughly $500 million and no debt.
As of the end of the third quarter, 12 hedge funds tracked by Insider Monkey reported having stakes in Udemy, Inc. (NASDAQ:UDMY). The total value of these stakes was $85 million.
10. Marqeta, Inc. (NASDAQ:MQ)
Price: $6.59
Price Decline Over the Past Six Months: 27%
Number of Hedge Fund Holders: 33
Marqeta, Inc. (NASDAQ:MQ) is a fintech company operating in the card and payment solutions space. While Marqeta, Inc. (NASDAQ:MQ) took a beating last year, analysts believe Marqeta, Inc. (NASDAQ:MQ) could turn the corner in the coming months and years. In the third quarter Marqeta, Inc. (NASDAQ:MQ) posted revenue growth of 46%. The increase in Marqeta, Inc. (NASDAQ:MQ)’s revenue was due to strong TPV (total processing volume), which was up 54% from $27.6 billion to $42.5 billion.
Marqeta, Inc. (NASDAQ:MQ) went public in the summer of 2021, but the stock has gained decent popularity among the smart money. Of the 920 elite hedge funds tracked by Insider Monkey, 33 had stakes in Marqeta, Inc. (NASDAQ:MQ). The total value of these stakes was $658 million.
9. Amprius Technologies, Inc. (NYSE:AMPX)
Price: $6.15
Price Decline Over the Past Six Months: 36%
Number of Hedge Fund Holders:10
Amprius Technologies, Inc. (NYSE:AMPX) went public last year and is operating in the battery market. Amprius Technologies, Inc. (NYSE:AMPX) makes silicon anodes for high energy density lithium-ion batteries. Amprius Technologies, Inc. (NYSE:AMPX) has a first-mover advantage in the silicon battery market and analysts believe Amprius Technologies, Inc. (NYSE:AMPX)’s technology reduces the threat of thermal runaway in battery products. Amprius Technologies, Inc. (NYSE:AMPX) also plans to launch a Gigafactory in the US in 2023.
Hedge funds were quick to pile into Amprius Technologies, Inc. (NYSE:AMPX). A total of 10 hedge funds reported having stakes in Amprius Technologies, Inc. (NYSE:AMPX) as of the end of the third quarter. The total value of these stakes was $1.1 million.
8. Atlis Motor Vehicles, Inc. (NASDAQ:AMV)
Price: $5.91
Price Decline Over the Past Six Months: 94%
Number of Hedge Fund Holders: N/A
Arizona-based Atlis Motor Vehicles, Inc. (NASDAQ:AMV) ranks 8th in our list of cheap new stocks to buy. Atlis Motor Vehicles, Inc. (NASDAQ:AMV) is operating in the lucrative EV industry. Atlis Motor Vehicles, Inc. (NASDAQ:AMV) makes EVs and charging infrastructure. It’s famous for its energy cells and battery packs as well as its AMV XT pickup trucks. Earlier in January, Atlis Motor Vehicles, Inc. (NASDAQ:AMV) shares soared 200% to reach new all-time highs of $2.26. Atlis Motor Vehicles, Inc. (NASDAQ:AMV) announced that it had reached a sales milestone of receiving preliminary and firm orders amounting to two gigawatt-hours’ worth of battery capacity. Atlis Motor Vehicles, Inc. (NASDAQ:AMV) aims to reach profitability and is counting on a subscription model in the EV space.
7. Weave Communications, Inc. (NYSE:WEAV)
Price: $5.32
Price Decline Over the Past Twelve Months: 44%
Number of Hedge Fund Holders: 4
Weave Communications, Inc. (NYSE:WEAV) is a Utah-based company that offers a communication platforms for small businesses. The platform allows businesses to automate their calls, messages, appointment systems and much more to increase efficiency and results. Weave Communications, Inc. (NYSE:WEAV) went public in November 2021. Weave Communications, Inc. (NYSE:WEAV) is operating in a high-growth but competitive market. For the third quarter, Weave Communications, Inc. (NYSE:WEAV) said its adjusted EPS came in at -$0.10, beating estimates by $0.04. Revenue in the quarter rose by 20% to total $36.2 million, beating estimates by $0.81 million. Weave Communications, Inc. (NYSE:WEAV) said that its Dollar-Based Net Retention Rate (NRR) was 101% as of September 30, 2022.
As of the end of the third quarter, 4 hedge funds reported having stakes in Weave Communications, Inc. (NYSE:WEAV). The total value of these stakes was over $100 million.
6. Thorne HealthTech, Inc. (NASDAQ:THRN)
Price: $3.69
Price Decline Over the Past Six Months: 21%
Number of Hedge Fund Holders: 3
New York-based Thorne HealthTech, Inc. (NASDAQ:THRN) offers health and wellness product and services related to sleep, stress and weight management. Thorne HealthTech, Inc. (NASDAQ:THRN) sells its products through direct to consumer channel as well as on ecommerce platforms including Amazon. Thorne HealthTech, Inc. (NASDAQ:THRN) is operating in a high-growth environment as more and more people begin to invest in health and wellness products. According to a research report, the global dietary supplements market alone is expected to reach $271 billion by 2028.
A total of 3 hedge funds tracked by Insider Monkey had stakes in Thorne HealthTech, Inc. (NASDAQ:THRN) as of the end of the third quarter, compared to 5 funds in the previous quarter.
5. Ikena Oncology, Inc. (NASDAQ:IKNA)
Price: $3.25
Price Decline Over the Past Six Months: 18%
Number of Hedge Fund Holders: 8
Ikena Oncology, Inc. (NASDAQ:IKNA) is a Boston, Massachusetts-based company with a strong pipeline. Ikena Oncology, Inc. (NASDAQ:IKNA) went public in 2021. In November last year, Ikena Oncology, Inc. (NASDAQ:IKNA) posted strong Q3 results. Ikena Oncology, Inc. (NASDAQ:IKNA) said its GAAP EPS in the quarter came in at -$0.48, beating analyst estimates by $0.01. Revenue in the quarter jumped a whopping 70% to reach $6.4 million, surpassing estimates by $2.08 million.
As of the end of the third quarter, Ikena Oncology, Inc. (NASDAQ:IKNA) had $174.4 million in cash, cash equivalents, and marketable securities.
As of the end of the third quarter, 8 funds in Insider Monkey’s database had stakes in the company.
4. Nextdoor Holdings, Inc. (NSYE:KIND)
Price: $2.12
Price Decline Over the Past Six Months: 33%
Number of Hedge Fund Holders: 22
Nextdoor Holdings, Inc. (NSYE:KIND) is a San Francisco-based company that makes platforms to connect neighborhoods. Nextdoor Holdings, Inc. (NSYE:KIND) has a differentiated product that is used by people to connect with others living close to them. Nextdoor Holdings, Inc. (NSYE:KIND)’s platform has useful applications because people use it to find babysitters, sell household items, sell or buy services and organize community events.
For the third quarter, Nextdoor Holdings, Inc. (NSYE:KIND) said its revenue jumped 2.4% to come in at $53.95 million, beating the estimates by $0.13 million.
Nextdoor Holdings went public in November 2021. A total of 22 hedge funds in Insider Monkey’s database had stakes in Nextdoor Holdings, Inc. (NSYE:KIND), compared to 21 funds in the previous quarter.
3. Velo3D, Inc. (NYSE:VLD)
Price: $2.11
Price Decline Over the Past Six Months: 16%
Number of Hedge Fund Holders: 11
Velo3D, Inc. (NYSE:VLD) is operating in the futuristic metal 3D printing industry. But it’s not an ordinary 3D printing company. It makes high-end parts for spaceships and rocket engines. Major space companies, including SpaceX, use Velo3D, Inc. (NYSE:VLD) products in their spaceships. Velo3D, Inc. (NYSE:VLD)’s is operating in a niche market where it’s difficult for its competitors to beat it. For example, Velo3D, Inc. (NYSE:VLD) can make complex parts using its PBF technology, which its competitors don’t have.
As of the end of the third quarter, 11 hedge funds tracked by Insider Monkey reported having stakes in Velo3D, Inc. (NYSE:VLD), compared to 18 funds in the previous quarter.
2. Innovative Eyewear, Inc. (NASDAQ:LUCY)
Price: $1.27
Price Decline Over the Past Six Months: 75%
Number of Hedge Fund Holders: 3
Innovative Eyewear, Inc. (NASDAQ:LUCY) is a Florida-based company that went public in 2022. Innovative Eyewear, Inc. (NASDAQ:LUCY) sells eye glasses and smart glasses. In December, Innovative Eyewear, Inc. (NASDAQ:LUCY) entered into a partnership with Authentic Brands Group to license Eddie Bauer outdoor smart eyewear.
3 hedge funds in our database had stakes in Innovative Eyewear, Inc. (NASDAQ:LUCY) as of the end of the third quarter. The total value of these stakes was $882,000.
1. Bright Green Corporation (NASDAQ:BGXX)
Price: $0.49
Price Decline Over the Past Six Months: 74%
Number of Hedge Fund Holders: 4
New Mexico-based Bright Green Corporation (NASDAQ:BGXX) is a cannabis company which ranks 1st in our list of the cheap new stocks to buy. Bright Green Corporation (NASDAQ:BGXX) plans to offer cannabis products like cannabis flower, pre-rolls, concentrates, vape pens, capsules, tinctures, edibles, topicals, and other cannabis-related products. Back in September 2022, Bright Green Corporation (NASDAQ:BGXX) gained about 9% in premarket trading after the company entered into a securities purchase agreement with institutional investors to purchase 9,523,810 shares of common stock and warrants, at a purchase price of $1.05/share and accompanying warrant.
In November, Bright Green Corporation (NASDAQ:BGXX) posted its third-quarter results after which Bright Green Corporation (NASDAQ:BGXX) gained over 2%. Bright Green Corporation (NASDAQ:BGXX) said it ended the period with $4.06 million in cash, an increase from its cash position of $178,973 at the end of June 30, 2022.
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Disclosure: None. 13 Cheap New Stocks To Buy is originally published on Insider Monkey.
