In this article, we will be looking at the 12 best stocks under $50.
You might have heard of the phrase “bad news for the economy is good news for the stock market.” Despite the sentence seeming counterintuitive, it does make sense. To clarify, it means that when the stock market is booming, the overall economy is suffering because of the rising market power and profits of corporations eating up the incomes of the workers and stretching thin the spending power of the consumers. For the stock market and its proponents, including notable investors such as Warren Buffett, investing in companies with more market power is always going to be a safe bet, with Buffett advising that one should invest in companies with large amounts of market power. This sort of investment strategy and approach is why companies like Apple Inc. (NASDAQ: AAPL) can sell a new iPhone for more than double the cost it takes them to produce the device, and why tech giants like Amazon.com, Inc. (NASDAQ: AMZN), Alphabet Inc. (NASDAQ: GOOG), and Facebook, Inc. (NASDAQ: FB) have become stock market winners.
That doesn’t go to say, however, that one should only focus on the overt gainers in favor of the covert small-cap stocks. In fact, with the outbreak of the pandemic in the past year, focusing on small-cap stocks is actually becoming an investment necessity as your average citizen’s spending, and thus investing, power is lessened.
The coronavirus pandemic resulted in about 53 million jobs in the US being rendered vulnerable last year, according to a report by McKinsey & Co., while over 26 million US citizens filed for unemployment as of April 2020. Additionally, while bad news for the economy can be considered to be good news for the stock market, that statement does not apply if the news is so bad that it directly impacts companies’ ability to bring in reasonable earnings. The pandemic also showcased its adverse impact on the stock market at large with global shares falling after its outbreak. Reuters has reported this June that MSCI’s all country world index fell by 0.14%, while on Wall Street, the Dow Jones Industrial Average lost 0.02% and the S&P 500 fell by 0.07%.
Despite the above, some good news has also been reported, particularly in light of growing vaccination production and distribution across the globe. The S&P 500, despite facing some losses, was uplifted by tech and bank stocks and thus hit record highs for four sessions in a row. US consumer confidence as of this June, as per a governmental survey cited by Reuters, has also been at its peak. After the worst of the pandemic is over and done with, investors are expected to be keeping an eye on healthcare stocks, which returned 7% by April 2020, and the technology and banking sectors, which have majorly kept the S&P 500 afloat so far, as mentioned above. Yet, finding the perfect stock to fit your investment needs and budget can be difficult, especially in such financially volatile times. Hence, we have compiled a list of the best stocks under $50 that you can invest in right now.
Investing is becoming difficult by the day, even for the smart money. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Without further ado, let’s look at the 12 best stocks under $50. The stocks on our list were selected on the basis of hedge fund sentiment, analysts’ ratings, fundamentals, and growth potential based on core business strengths.
Best Stocks Under $50
12. Jumia Technologies AG (NYSE: JMIA)
Number of Hedge Fund Holders: 16
Jumia Technologies AG (NYSE: JMIA) is an e-commerce platform operating in Africa, Portugal, Germany, and the UAE. The company’s platform includes a marketplace that connects buyers to sellers and also enables the shipment and delivery of packages. It ranks 12th on our list of the best stocks under $50.
This May, Jumia Technologies AG was reportedly still rising since the company’s reported losses in Q1 began to decrease, as operating losses fell by 23%, while adjusted EBITDA losses fell by 24%. Additionally, as of this June, the stock has gained about 4% after receiving attention on Reddit’s WallStreetBets Forum. In the first quarter of 2021, Jumia Technologies AG had an EPS of $0.00, beating estimates by $0.45, while its revenue was $33.26 million, up 5.1% year over year but missing estimates by -$10.10 million. The company’s gross profit margin is 68.86%, and the stock has gained 394.12% in the past year.
As of the end of the first quarter of 2021, 16 hedge funds out of the 866 tracked by Insider Monkey held stakes in Jumia Technologies AG, with a total stake value of about $123 million. This is compared to 13 hedge funds in the previous quarter, with a total stake value of roughly $241 million. Like Apple Inc., Amazon.com, Inc., Alphabet Inc., and Facebook, Inc., Jumia Technologies AG is a good stock to invest in.
11. ChargePoint Holdings, Inc. (NYSE: CHPT)
Number of Hedge Fund Holders: 24
ChargePoint Holdings, Inc. (NYSE: CHPT) is a provider of EV charging networks and solutions in the US. The company’s portfolio includes hardware, software, and services for commercial, fleet, and residential customers. It ranks 11th on our list of the best stocks under $50.
This June, Jefferies began covering ChargePoint Holdings, Inc. with a Buy rating and a $40 price target, with analyst David Kelley calling the company a leader in the US charging infrastructure sector and expecting a 57% rise in sales CAGR for the company. Needham has also begun covering the stock with a Buy rating and a $39 price target, in light of the firm’s belief that ChargePoint Holdings, Inc. will be growing strongly.
The company also announced its partnership with Mercedes-Benz (OTC: DDAIF) this June, resulting in positive responses. In the fiscal first quarter of 2022, ChargePoint Holdings, Inc. had an EPS of -$0.18, missing estimates by -$0.06, while its revenue was $40.51 million, beating estimates by $3.28 million. ChargePoint Holdings, Inc. has a gross profit margin of 22.31% and has gained 220.52% in the past year.
As of the end of the first quarter of 2021, 24 hedge funds out of the 866 tracked by Insider Monkey held stakes in ChargePoint Holdings, Inc., with a total stake value of about $207 million. Like Apple Inc., Amazon.com, Inc., Alphabet Inc., and Facebook, Inc., ChargePoint Holdings, Inc. is a good stock to invest in.
Alger, an investment management firm, mentioned ChargePoint Holdings, Inc. in its first-quarter 2021 investor letter. Here’s what they said:
“ChargePoint Holdings, Inc. was among the top detractors from performance. ChargePoint provides a network of electric vehicle (EV) charging stations globally. Like equities of many businesses geared to electric vehicles, ChargePoint shares underperformed in the first quarter of 2021 as part of a broad rotation away from high-growth technology companies with limited track records of performance as public companies. Longer term, Charge Point could potentially serve as a bellwether company of the fast growing EV category and we believe it is an attractive way to gain exposure to EV adoption without betting on whether a particular EV brand will win in the marketplace. Additionally, EVs are a massive end market.”
10. BP p.l.c. (NYSE: BP)
Number of Hedge Fund Holders: 29
BP p.l.c. (NYSE: BP) is an energy industry player, operating through its Gas & Low Carbon Energy, Oil Production & Operations, Customers & Products, and Rosneft segments. It ranks 10th on our list of the best stocks under $50.
On June 23rd, BP p.l.c. (NYSE: BP) reportedly began production in the Gulf of Mexico through its new Manuel project. The stock is also a regular dividend payer, with a 4.6% dividend yield, making it a good option for income investors. This July, JP Morgan raised its price target on BP p.l.c. (NYSE: BP) and retained its Overweight rating on the shares. In the first quarter of 2021, BP p.l.c. (NYSE: BP) had an EPS of $0.78, beating estimates by $0.35, while its revenue was $34.54 billion, missing estimates by -$29.73 billion. The company’s gross profit margin is 18% and the stock has gained 15.25% in the past 6 months and 29.52% year to date.
As of the end of the first quarter of 2021, 29 hedge funds out of the 866 tracked by Insider Monkey held stakes in BP p.l.c. (NYSE: BP), with a total stake value of about $1.24 billion. This is compared to 29 hedge funds in the previous quarter, with a total stake value of roughly $927 million. Like Apple Inc., Amazon.com, Inc., Alphabet Inc., and Facebook, Inc., BP p.l.c. (NYSE: BP) is a good stock to invest in.
9. Financial Select Sector SPDR Fund (NYSE: XLF)
Number of Hedge Fund Holders: 30
Financial Select Sector SPDR Fund (NYSE: XLF) is an exchange-traded fund launched by State Street Global Advisors, Inc., and managed by SSGA Funds Management, Inc. The fund invests in public equity markets in the US and stocks of companies in the finance sector. It ranks 9th on our list of the best stocks under $50.
On July 5th, UBS estimated that there will be broad-based upgrades in Q2 led by certain sectors like the financials sector led by the Financial Select Sector SPDR Fund, among others. The fund has $41.02 billion in assets under management and its price returns in the past year have been up 60.82% compared to the S&P 500’s 39.05% increase. Financial Select Sector SPDR Fund’s (NYSE: XLF) total returns have been up 63.94% versus the S&P 500’s total returns increase of 10.4% in the past year. The stock has gained 21.22% in the past 6 months and 27.03% year to date.
As of the end of the first quarter of 2021, 30 hedge funds out of the 866 tracked by Insider Monkey held stakes in Financial Select Sector SPDR Fund, with a total stake value of about $1.21 billion. This is compared to 32 hedge funds in the previous quarter, with a total stake value of roughly $417 million. Like Apple Inc., Amazon.com, Inc., Alphabet Inc., and Facebook, Inc., Financial Select Sector SPDR Fund is a good stock to invest in.
8. American Airlines Group Inc. (NASDAQ: AAL)
Number of Hedge Fund Holders: 32
American Airlines Group Inc. (NASDAQ: AAL) is a network air carrier providing scheduled air transportation services for passengers and cargo. The company operates a mainline fleet of 855 aircraft and ranks 8th on our list of the best stocks under $50.
Data released by the Bank of America on system bookings revealed that American Airlines Group Inc. in June performed well in terms of uptake in bookings in light of eased travel restrictions. MKM Partners also upgraded American Airlines Group Inc. to a Buy rating this June with expectations of deleveraging and clearer cash generation.
In the first quarter of 2021, American Airlines Group Inc. had an EPS of -$4.32, beating estimates by $0.01, while its revenue was $4.01 billion, missing estimates by -$31.27 million. The stock has gained 38.4% in the past 6 months and 41.97% year to date.
As of the end of the first quarter of 2021, 32 hedge funds out of the 866 tracked by Insider Monkey held stakes in American Airlines Group Inc., with a total stake value of about $561 million. This is compared to 37 hedge funds in the previous quarter, with a total stake value of roughly $329 million. Like Apple Inc., Amazon.com, Inc., Alphabet Inc., and Facebook, Inc., American Airlines Group Inc. is a good stock to invest in.
7. Altria Group, Inc. (NYSE: MO)
Number of Hedge Fund Holders: 38
Altria Group, Inc. (NYSE: MO) is a manufacturer of cigarettes, oral tobacco products, and wine in the US. The company’s brands include Marlboro, Black & Mild, Copenhagen, Skoal, Red Seal, and Husky. It ranks 7th on our list of the best stocks under $50.
According to Morgan Stanley, Altria Group, Inc. is set to have only an upside after the FTC administrative trial. The firm retained its Overweight rating and $52 price target on the company. Altria Group, Inc. is also a high-dividend-yielding stock with a 7.24% dividend yield, making it a good investment option for income investors.
In the first quarter of 2021, Altria Group, Inc. had an EPS of $1.07, beating estimates by $0.02. The company’s $4.88 billion revenue missed estimates by $108.51 million. Altria Group, Inc. has a gross profit margin of 65.28%, and the stock also has a forward PE ratio of 10.39 and has gained 14.75% in the past 6 months and 16.38% year to date.
By the end of the first quarter of 2021, 38 hedge funds out of the 866 tracked by Insider Monkey held stakes in Altria Group, Inc., worth about $1.1 billion. This is compared to 37 hedge fund holders in the previous quarter, holding stakes worth roughly $1.08 billion. Like Apple Inc., Amazon.com, Inc., Alphabet Inc., and Facebook, Inc., Altria Group, Inc. is a good stock to invest in.
Oakmark Funds, an investment management firm, mentioned Altria Group, Inc. in their first quarter 2021 investor letter. Here’s what they said:
“We initiated a new position in Altria, which commands roughly 50% of the cigarette and smokeless tobacco market in the U.S. Both of these markets are duopolies that we believe have exhibited strong pricing power over time. While the shares trade at a low multiple of reported earnings, Altria also owns valuable stakes in other non-core businesses, including ~10% of AB InBev, 35% of Juul and 45% of Cronos. Excluding the values of these stakes and their respective earnings contribution, we were able to purchase shares of Altria for less than seven times our estimate of next year’s earnings. This compares to other consumer brands with less favorable earnings growth profiles that trade for three times Altria’s multiple. The company also has several promising reduced-risk products that may appeal to tobacco users, including On! and iQOS. We believe these products position the company well to help consumers slowly transition to a tobacco-free future. We expect management to return the vast majority of future earnings to shareholders given the company’s strong balance sheet, high free cash flow conversion and limited capital requirements.”
6. The Gap, Inc. (NYSE: GPS)
Number of Hedge Fund Holders: 42
The Gap, Inc. (NYSE: GPS) is an apparel retail company offering clothes, accessories, and personal care products for all genders and ages. The company’s brands include Old Navy, Gap, Banana Republic, Athleta, and Intermix. It ranks 6th on our list of the best stocks under $50.
On July 1st, Wells Fargo upped its price target on The Gap, Inc. to $45 with analyst Ike Boruchow commenting that the Yeezy line could bring in approximately $3.8 billion to The Gap, Inc.’s (NYSE: GPS) equity value. The firm has retained its Overweight rating on the stock, claiming that the collaboration with Kanye West on the Yeezy line will meet the hype.
A consumer survey conducted by J.P. Morgan this June also revealed that The Gap, Inc. was among the list of apparel favorites post-pandemic, and the company’s guidance for the financial year 2021 of sales growth in the 20% range and EPS of $1.60 to $1.75 has also led to the stock gaining.
In the fiscal first quarter of 2022, The Gap, Inc. had an EPS of $0.48, beating estimates by $0.56. The company’s revenue was $3.99 billion, up 89.42% year over year, and beating estimates by $516.21 million, and it has a gross profit margin of 47.45%. The Gap, Inc. has gained 56% in the past 6 months and 73.78% year to date as well.
As of the end of the first quarter of 2021, 42 hedge funds out of the 866 tracked by Insider Monkey held stakes in The Gap, Inc., with a total stake value of about $988 million. This is compared to 38 hedge funds in the previous quarter, with a total stake value of roughly $754 million. Like Apple Inc., Amazon.com, Inc., Alphabet Inc., and Facebook, Inc., The Gap, Inc. is a good stock to invest in.
5. Ford Motor Company (NYSE: F)
Number of Hedge Fund Holders: 49
Ford Motor Company (NYSE: F) is an automobile manufacturer that is also dabbling in the EV business. The company provides Ford trucks, cars, sport utility vehicles, EVs, and Lincoln luxury vehicles across the globe. It ranks 5th on our list of the best stocks under $50.
This June, Ford Motor Company EV sales were reported to have surged by 117%, setting a new all-time-high record for first-half sales with 56,570 vehicles sold. JP Morgan also upped its price target on the stock to a Street-high $18, with analyst Ryan Brinkman commenting that Ford Motor Company shares are attractive because of their valuation and the company’s new vehicle lineups. In the first quarter of 2021, Ford Motor Company had an EPS of $0.89, beating estimates by $0.68. The company’s revenue was $33.55 billion, up 7.06% year over year and beating estimates by $1.34 billion. The stock has a forward PE ratio of 11.31 and has gained 68.89% in the past 6 months and 75.23% year to date. Ford Motor Company also has a gross profit margin of 8.07%.
As of the end of the first quarter of 2021, 49 hedge funds out of the 866 tracked by Insider Monkey held stakes in Ford Motor Company, with a total stake value of about $2.19 billion. This is compared to 41 hedge funds in the previous quarter, with a total stake value of roughly $1.65 billion.
4. AT&T Inc. (NYSE: T)
Number of Hedge Fund Holders: 63
AT&T Inc. is a telecommunications, media, and technology services provider operating worldwide. The company has three segments: Communications, WarnerMedia, and Latin America. It ranks 4th on our list of the best stocks under $50.
This June, AT&T Inc. announced that it would be moving its 5G mobile network to Microsoft Corporation’s (NASDAQ: MSFT) Azure for Operator’s cloud in a strategic move. The company’s WarnerMedia segment is also bringing in $1.4 billion by selling the Playdemic platform to Electronic Arts Inc. (NASDAQ: EA). The stock also pays a regular high dividend with a 7.23% yield, making it a good income investment choice. Additionally, Tigress Financial reiterated its Buy rating on the stock this July with a 12-month price target of $36, in light of the firm’s positive response to news of the WarnerMedia sale.
In the first quarter of 2021, AT&T Inc. had an EPS of $0.86, beating estimates by $0.08. The company’s revenue was $43.94 billion, up 2.71% year over year and beating estimates by $1.27 billion. The stock has a forward PE ratio of 9.31 and has gained 0.52% in the past month.
As of the end of the first quarter of 2021, 63 hedge funds out of the 866 tracked by Insider Monkey held stakes in AT&T Inc., with a total stake value of about $2.7 billion. This is compared to 58 hedge funds in the previous quarter, with a total stake value of roughly $1.04 billion.
3. Pfizer Inc. (NYSE: PFE)
Number of Hedge Fund Holders: 65
Pfizer Inc. (NYSE: PFE) is a healthcare sector company manufacturing biopharmaceutical products across the globe. The company’s vaccine released in collaboration with BioNTech is among the most effective and widely distributed vaccines against the coronavirus. The stock ranks 3rd on our list of the best stocks under $50.
In June, the consensus price target on Pfizer Inc. was $42.30, roughly 7% more than the share price for the stock at the time. The company has made a $40 million equity investment in Spero Therapeutics, alongside signing a licensing agreement for the latter’s SPR206 as well. In the first quarter of 2021, Pfizer Inc. had an EPS of $0.93, beating estimates by $0.15. The company’s revenue was $14.58 billion, up 21.23% year over year and beating estimates by $961.32 million. The stock has gained 7.76% in the past 6 months and 7.93% year to date and it has a forward PE ratio of 10.74. Pfizer Inc. has a gross profit margin of 76.66%.
As of the end of the first quarter of 2021, 65 hedge funds out of the 866 tracked by Insider Monkey held stakes in Pfizer Inc., with a total stake value of about $2.01 billion. This is compared to 63 hedge funds in the previous quarter, with a total stake value of roughly $1.84 billion.
ClearBridge Investments, an investment management firm, mentioned Pfizer Inc. in its first-quarter 2021 investor letter. Here’s what they said:
“Our underweights in health care and staples contributed to relative performance during the period. As we continue to focus the portfolio on high-conviction ideas, we sold Pfizer in late 2020, in the health care sector.”
2. General Electric Company (NYSE: GE)
Number of Hedge Fund Holders: 68
General Electric Company (NYSE: GE) is a high-tech industrial company operating across the globe. The company offers heavy-duty and aero-derivative gas turbines for utilities, independent power producers, and industrial applications, among other products and services. It ranks 2nd on our list of the best stocks under $50.
On July 1st, Citigroup commented on General Electric Company, saying that the company was making progress on its turnaround plan, and maintaining its Buy rating on the stock alongside its $17 price target. General Electric Company is also the company making engines for both Boeing and Airbus jets, and hence the stock rallied in light of United Airlines’ mass order of over 200 of these jets.
UBS also has a Buy rating on General Electric Company with a $17 price target, with analyst Markus Mittermaier expecting adjusted free cash flow for the company to be $6.4 billion next year and $8.6 billion in 2023. In the first quarter of 2021, General Electric Company had an EPS of $0.03, beating estimates by $0.02. The company’s revenue was $17.12 billion, missing estimates by -$363.49 million, and it has a gross profit margin of 16.98%. The stock has also gained 17.61% in the past 6 months and 27.6% year to date.
As of the end of the first quarter of 2021, 68 hedge funds out of the 866 tracked by Insider Monkey held stakes in General Electric Company, with a total stake value of about $6.16 billion. This is compared to 69 hedge funds in the previous quarter, with a total stake value of roughly $5.58 billion.
Vulcan Value Partners, an investment management firm, mentioned General Electric Company in its first-quarter 2021 investor letter. Here’s what they said:
“General Electric is outperforming our expectations for 2021 as the economic recovery is occurring faster than expected. We are particularly pleased with its free cash flow generation. We are happy to own it in our portfolio.”
1. Bank of America Corporation (NYSE: BAC)
Number of Hedge Fund Holders: 97
Bank of America Corporation (NYSE: BAC) is a provider of banking and financial products and services for individual consumers, small and middle-market businesses, institutional investors, large corporations, and governments. The company operates globally and ranks 1st on our list of the best stocks under $50.
This June, Bank of America Corporation announced plans to increase its quarterly common stock dividend by about 17% for the third quarter of 2021, and being a regular dividend yielder with a 1.75% dividend yield, it can be a good option for income investors as well.
In light of the Federal Reserve’s stress tests, Bank of America Corporation was among the bank stocks witnessing notable gains and led other financials stocks this June. In the first quarter of 2021, Bank of America Corporation had an EPS of $0.86, beating estimates by $0.21. The company’s revenue was $22.82 billion, beating estimates by $959.56 million. The stock has also gained 27.99% in the past 6 months and 37.03% year to date, and it has a forward PE ratio of 13.56.
As of the end of the first quarter of 2021, 97 hedge funds out of the 866 tracked by Insider Monkey held stakes in Bank of America Corporation, with a total stake value of about $45.3 billion. This is compared to 99 hedge funds in the previous quarter, with a total stake value of roughly $35.3 billion.
ClearBridge Investments, an investment management firm, mentioned Bank of America Corporation in its first-quarter 2021 investor letter. Here’s what they said:
“Higher long-term interest rates supported financials such as Bank of America, which has shown both defensive and offensive characteristics in the past year. We believe it continues to be the least risky large bank from a credit standpoint, with conservative underwriting and controlled risk taking, a leading consumer deposit franchise, scale and technology. It is also a leader in its commitments to sustainability, or as it terms it, responsible growth. Disclosure and reporting at all levels form a large part of this commitment, including gender diversity and equality, environmental commitments and support of communities in which it operates. In the first quarter Bank of America announced it is setting a goal of net-zero greenhouse gas (GHG) emissions in its supply chain and operations, and notably also in its financing activities, before 2050.”
You can also take a look at 10 Cheap Stocks To Invest In (February 2021) and 10 Best Cheap Stocks To Buy Now.
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This article is originally published at Insider Monkey.
