In this article, we discuss the 10 stocks under $20 to buy now.
In an era of soaring market valuations, cheap stocks offer investors from across the spectrum a healthy chance to make handsome returns in a relatively short space of time. As growth stocks undergo a prolonged period of correction in light of rising rates, it is more prudent to invest in value firms, even though growth companies usually boast of a competitive advantage over peers and hence have a strong chance of increasing their earnings and sales faster compared to other firms.
However, in contrast to their value counterparts, there is also a certain risk associated with investing in growth stocks, but this risk has been what has set success and failure apart at the market in the past few years. Some of the most popular growth stocks on the market today include Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOG), and Apple Inc. (NASDAQ:AAPL). These stocks have registered record rallies over the past year and offered investors handsome returns.
Market experts have been advising investors to monitor cheap stocks closely as inflation fears reduce prices and offer a buying opportunity in several high-entry sectors. More than 20% of the S&P 500 comprises just four large-cap technology firms, indicating that these firms might be relatively protected from larger slowdowns. Smart investors can look towards cheaper stocks that are trading under $20. Retail investors, who usually bet on cheap plays, could stand to gain a lot from the investments in these firms, some of which have been discussed in detail below.
Our Methodology
The companies that have upcoming growth catalysts and were priced under $20 per share, as of December 14, were selected for the list. Special importance was assigned to outlining the basic business fundamentals and analyst ratings for each firm to provide readers with some context so they can make more informed investment choices. Data from around 900 elite hedge funds tracked by Insider Monkey in the third quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.
Stocks Under $20 to Buy Now
10. G. Willi-Food International Ltd. (NASDAQ:WILC)
Number of Hedge Fund Holders: 2
Share Price as of December 14: $14.50
Willi-Food International Ltd. (NASDAQ:WILC) develops, imports, exports, markets, and distributes food products worldwide. On November 24, the firm posted earnings for the third quarter of 2022, reporting earnings per share of $0.16. The revenue over the period was more than $34 million, up more than 16% compared to the revenue over the same period last year. The company also declared a dividend of $0.32 per share on the same day, which is payable to shareholders by the end of December.
Among the hedge funds being tracked by Insider Monkey, London-based investment firm Springhouse Capital Management is a leading shareholder in G. Willi-Food International Ltd. with 650,033 shares worth more than $8.7 million.
Unlike Microsoft Corporation, Alphabet Inc., and Apple Inc., G. Willi-Food International Ltd. is one of the more affordable stocks to buy now.
9. Electromed, Inc. (NYSE:ELMD)
Number of Hedge Fund Holders: 4
Share Price as of December 14: $9.85
Electromed, Inc. (NYSE:ELMD) develops, manufactures, markets, and sells airway clearance therapy and related products that apply high-frequency chest wall oscillation (HFCWO) therapy in pulmonary care for patients of various ages in the United States and internationally. On November 30, Electromed announced that the US Food and Drug Administration granted 510 (k) clearance to Electromed’s SmartVest Clearway Airway Clearance System. The system uses High-Frequency Chest Wall Oscillation, a therapy which helps clear the lungs of excess secretions.
Among the hedge funds being tracked by Insider Monkey, California-based investment firm Millennium Management is a leading shareholder in Electromed, Inc. with 57,512 shares worth more than $589,000.
In its Q2 2022 investor letter, Summers Value Partners, an asset management firm, highlighted a few stocks and Electromed, Inc. was one of them. Here is what the fund said:
“The biggest detractors during the first half of 2022 were Inotiv (NOTV) and Electromed, Inc.. The perception of a slowing R&D funding environment for small pharmaceutical and biotechnology companies weighed on Inotiv’s share price. While the funding environment certainly has become more difficult, Inotiv is highly diversified with over 3,000 clients including academic centers and other clinical research organizations (CRO). Pre-commercial clients only represent 20% of its sales mix. Additionally, Inotiv is a market share gainer in the CRO industry as it benefits from its intense focus on the customer experience. As such, we believe the company is positioned to weather the storm. We continue to own shares of Inotiv; however, we reduced the position size in the first quarter. Electromed’s share price declined as the company has struggled to generate profitable revenue growth over the past few years. The company has also been hurt by a pattern of turnover on the executive team. We believe that Electromed should balance its growth aspirations against shareholders’ desire for higher profit margins and a more compelling return on invested capital (ROIC) profile.”
8. AudioCodes Ltd. (NASDAQ:AUDC)
Number of Hedge Fund Holders: 5
Share Price as of December 14: $18.28
AudioCodes Ltd. (NASDAQ:AUDC) provides advanced communications software, products, and productivity solutions for the digital workplace. On November 2, AudioCodes revealed that AudioCodes Live for Microsoft Teams managed services continued to grow and reached a level of $28 million ARR, nearly 100% growth over the year-ago period, putting it well on track to achieve its 2022 target of over $30 million ARR.
At the end of the third quarter of 2022, 5 hedge funds in the database of Insider Monkey held stakes worth $5.1 million in AudioCodes Ltd., compared to 6 in the previous quarter worth $10.9 million.
7. Heartland Express, Inc. (NASDAQ:HTLD)
Number of Hedge Fund Holders: 9
Share Price as of December 14: $16.67
Heartland Express, Inc. (NASDAQ:HTLD) operates as a short-to-medium haul truckload carrier in the United States and Canada. On August 22, Heartland Express announced that it will acquire the Contract Freighters non-dedicated US dry van and temperature-controlled truckload business and CFI Logistica operations in Mexico from TFI International, for a cash enterprise value of $525 million.
On November 11, UBS analyst Thomas Wadewitz upgraded Heartland Express, Inc. stock to Buy from Neutral with a price target of $18, up from $17.
At the end of the third quarter of 2022, 9 hedge funds in the database of Insider Monkey held stakes worth $22.8 million in Heartland Express, Inc., compared to 13 in the preceding quarter worth $27 million.
In its Q1 2022 investor letter, Palm Valley Capital Management, an asset management firm, highlighted a few stocks and Heartland Express, Inc. was one of them. Here is what the fund said:
“We acquired three new stocks over the first quarter: (which includes) Heartland Express (ticker: HTLD). While many of the companies on our buy list fell in Q1, they were generally declining from lofty levels. The prices did not reach a level where we believed we could meet our required return threshold. Additionally, stocks partially rebounded in the last two weeks of March.
Founded in 1978, Heartland Express is an established short-to-medium haul trucking company serving the entire United States. Since going public in 1986, Heartland has grown revenues from $22 million to $607 million in 2021. Heartland has differentiated itself by keeping its equipment new and deliveries on time. As an efficient provider of premium transportation services, Heartland has a long history of generating above-average profit margins and has received multiple customer service awards.
Although Heartland produced record earnings last year, its revenues declined as the company reduced its fleet. Similar to other transportation companies, Heartland is having difficulty finding enough qualified labor to fill its trucks. We believe the challenging labor market and decline in revenues have contributed to Heartland’s poor stock performance (down 28% from its 2021 high). Heartland has been on our possible buy list for many years, and we were pleased to see its stock trade below our calculated valuation. We believe the company is a high-quality cyclical business that has historically generated abundant free cash flow and has maintained one of the strongest balance sheets in the industry. “
6. CI Financial Corp. (NYSE:CIXX)
Number of Hedge Fund Holders: 9
Share Price as of December 14: $10.24
CI Financial Corp. (NYSE:CIXX) is a publicly owned asset management holding company. On November 30, CI Financial Corp. cleared that it has agreed to sell debentures with an aggregate principal amount of $400 million, maturing on December 2, 2025. The 2025 debentures have a term of three years and carry an interest rate of 7.00% payable semi-annually.
On November 11, TD Securities analyst Graham Ryding maintained a Hold rating on CI Financial Corp. stock and raised the price target to C$16 from C$15.
At the end of the third quarter of 2022, 9 hedge funds in the database of Insider Monkey held stakes worth $22.9 million in CI Financial Corp., compared to 10 in the previous quarter worth $48.5 million.
In contrast to Microsoft Corporation, Alphabet Inc., and Apple Inc., CI Financial Corp. is one of the more affordable stocks to buy now.
5. TrueBlue, Inc. (NYSE:TBI)
Number of Hedge Fund Holders: 13
Share Price as of December 14: $19.56
TrueBlue, Inc. (NYSE:TBI) provides specialized workforce solutions in the United States, Canada, and Puerto Rico. In late October, the firm posted earnings for the third quarter of 2022, reporting earnings per share of $0.63, beating market estimates by $0.03. The revenue over the period was $576 million, down 0.2% compared to the prior year.
On October 25, Baird analyst Mark Marcon maintained an Outperform rating on TrueBlue, Inc. stock and raised the price target to $28 from $21, noting that third-quarter results and fourth-quarter were below expectations as cyclical slowing is becoming more apparent.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Pzena Investment Management is a leading shareholder in TrueBlue, Inc. with 2.2 million shares worth more than $42.6 million.
4. AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO)
Number of Hedge Fund Holders: 14
Share Price as of December 14: $14.90
AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) an oncology-focused biopharmaceutical company, focuses on developing and commercializing medicines for patients with cancer. On October 18, AVEO Pharmaceuticals revealed that it would be acquired by LG Chem, the largest Korean chemical company, for $15.00 per share in an all-cash transaction with an implied equity value of $566 million on a fully diluted basis. Shares of AVEO jumped 38% premarket in response to the news.
At the end of the third quarter of 2022, 14 hedge funds in the database of Insider Monkey held stakes worth $50.3 million in AVEO Pharmaceuticals, Inc., compared to 9 in the preceding quarter worth $38.7 million.
3. SoFi Technologies, Inc. (NASDAQ:SOFI)
Number of Hedge Fund Holders: 25
Share Price as of December 14: $4.43
SoFi Technologies, Inc. (NASDAQ:SOFI) provides digital financial services. It operates through three segments: Lending, Technology Platform, and Financial Services. The shares of the firm have been trading at a discount as US lawmakers scrutinize the fintech industry in response to a large-scale drawdown in the crypto world. However, this discount has made the risk/reward profile of the firm more appealing.
On November 23, Mizuho analyst Dan Dolev maintained a Buy rating on SoFi Technologies, Inc. stock and lowered the price target to $6 from $7.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Silver Lake Partners is a leading shareholder in SoFi Technologies, Inc. with 31.2 million shares worth more than $152 million.
In its Q4 2021 investor letter, Altron Capital Management, an asset management firm, highlighted a few stocks and SoFi Technologies, Inc. was one of them. Here is what the fund said:
“We have been building our position in SoFi Technologies, Inc. over the last two quarters but have not yet written about our thesis until now. SoFi is an online financial technology company that started off refinancing student loans. This segment remains a big part of the company’s business, but they have more recently expanded their products to offer an entire suite of financial services including personal banking, investing, and credit. While their collection of products is still evolving and not yet complete, we believe the company is in the early stages of its inflection. The company nearly doubled its member count over the past year and is growing 50%+ despite its loan refinancing business taking a hit due to the COVID-related loan moratorium. Furthermore, the company is close to obtaining a bank charter through its acquisition of Golden Pacific Bancorp, a community bank based in Sacramento. A bank charter would allow SoFi to take in its customer deposits, lowering its cost of capital and expanding the company’s breadth of financial offerings.
While SoFi is not the only online banking platform out there, we believe it could take a decent share of the financial services market. Banking is a notoriously sticky business, as the inconvenience and hassle of switching banks prevent consumers from jumping to competitors regardless of cost. This is one of the reasons that traditional banks are one of the few businesses to have truly been disrupted by technology. We think SoFi is well on its way to changing that and creating a new paradigm for the future of consumer banking and financial services. (read more)
2. Asana, Inc. (NYSE:ASAN)
Number of Hedge Fund Holders: 26
Share Price as of December 14: $15.50
Asana, Inc. (NYSE:ASAN) operates a work management platform for individuals, team leads, and executives in the United States and internationally. On December 2, DA Davidson analyst Robert Simmons maintained a Neutral rating on Asana, Inc. stock and lowered the price target to $18 from $20, highlighting that the company posted its smallest revenue beat in the past nine quarters amid a macro economic slowdown.
Among the hedge funds being tracked by Insider Monkey, Singapore-based firm Himension Capital is a leading shareholder in Asana, Inc. with 7.5 million shares worth more than $167.5 million.
In its Q3 2022 investor letter, Diamond Hill Capital, an asset management firm, highlighted a few stocks and Asana, Inc. was one of them. Here is what the fund said:
“Work management software company Asana, Inc. has, in our view, a relatively undifferentiated and discretionary software product within a software category that will likely be meaningfully smaller than anticipated. Additionally, Asana’s operating losses continue to widen as its revenues have begun decelerating.”
1. Ford Motor Company (NYSE:F)
Number of Hedge Fund Holders: 47
Share Price as of December 14: $13.57
Ford Motor Company (NYSE:F) designs, manufactures, markets, and services a range of Ford trucks, cars, sport utility vehicles, electrified vehicles, and Lincoln luxury vehicles worldwide. On December 1, Ford Motor announced that it will invest an additional 149 million GBP to raise electric vehicle power unit capacity at its engine factory in northern England by 70% in a push to go electric in Europe by 2030.
On November 30, Citi analyst Itay Michaeli maintained a Neutral rating on Ford Motor Company stock and raised the price target to $14 from $13, highlighting that the new targets of the firm represent modestly higher multiples reflecting the company’s improved auto free cash flow conversion this year.
At the end of the third quarter of 2022, 47 hedge funds in the database of Insider Monkey held stakes worth $1.2 billion in Ford Motor Company, compared to 46 in the preceding quarter worth $608.8 million.
In its Q3 2022 investor letter, Leaven Partners, an asset management firm, highlighted a few stocks and Ford Motor Company was one of them. Here is what the fund said:
“In our last quarterly letter, I briefly mentioned that the consensus estimates for corporate profits appeared to be a bit too sanguine. I referenced a Reuters article that reported, as of June 17, Wall Street expected S&P 500 earnings to grow by 9.6% in 2022, which was up from 8.8% in April and from 8.4% in January. That tune began to change at the end of July and accelerated in August and September, as major players, such as Ford, have recently issued profit warnings and/or have withdrawn guidance. In response, Wall Street has altered its outlook: lowering third-quarter profit growth to 4.6% [2] from 7.2% in early August and slashing full-year profit growth to 4.5%.”
You can also take a peek at 11 Undervalued Canadian Stocks To Buy and 10 Best Cannabis Stocks To Buy.
Suggested Articles:
- 15 Countries That Produce the Most Solar Energy
- 20 Countries That Produce the Most Electric Power
- 15 Countries That Produce the Most Oil
This article is originally published at Insider Monkey.
