In this article, we discuss the 10 very cheap stocks to buy right now.
Conventional wisdom would suggest that inflation worries over the past few months would have given value stocks more time in the limelight. However, it seems like retail investors pay little or no heed to convention at the market. They have continued to pour into cheap stocks in the technology sector that promise “faster-than average” profit growth. Even as investors pull out more than $2 billion from tech-focused mutual and exchange traded funds between September and November, according to the EPFR tracker, individual growth options remain in the clear.
The retail investor strategy stands in stark contrast to the institutional investor activity. EPFR data indicates that institutional investors have piled into value-oriented sectors like utilities, healthcare, and consumer goods as inflation fears mount. However, as the valuations of tech giants like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc. (NASDAQ:GOOG) reach new highs, both retail and institutional investors are exploring the market for cheap stocks.
Greg Hahn, the chief investment officer of Indianapolis-based Winthrop Capital Management, told The Wall Street Journal last month that his investment firm was scaling back exposure to tech giants. Instead, the investor said, the company would focus on finding businesses with strong balance sheets and reasonable valuations. Hahn reasoned that this “shift” in focus was preparation for a rough market cycle ahead. Along with Hahn, other famous investors, like Michael Burry, have also sounded the alarm around large-cap tech valuations.
Photo by Marga Santoso on Unsplash
Our Methodology
The companies that are trading at relatively cheap prices compared to their growth potential were identified for the list. The real-time share prices of the stocks, as of December 12, are mentioned alongside other details for further clarity. All the firms listed below are priced under $25 per share.
In order to provide readers with some context for their investment choices, the business fundamentals and analyst ratings for the stocks were also considered. Hedge fund sentiment was included as a classifier as well.
The hedge fund sentiment around each stock was calculated using the data of 867 hedge funds tracked by Insider Monkey.
Very Cheap Stocks to Buy Right Now
10. Diebold Nixdorf, Incorporated (NYSE:DBD)
Number of Hedge Fund Holders: 13
Real-Time Share Price as of December 12: $8.56
Diebold Nixdorf, Incorporated (NYSE:DBD) provides connected commerce solutions. The company operates through banking and retail segments.
Diebold Nixdorf, Incorporated (NYSE:DBD) posted earnings for the third quarter in late October, reporting earnings per share of $0.34 and a revenue of $958 million. It also raised full year-guidance numbers, saying that it expected total revenue of $3.9 billion to $3.95 billion against estimates of over $4 billion.
Among the hedge funds being tracked by Insider Monkey, California-based firm Beach Point Capital Management is a leading shareholder in Diebold Nixdorf, Incorporated (NYSE:DBD) with 4.9 million shares worth more than $49 million.
At the end of the third quarter of 2021, 13 hedge funds in the database of Insider Monkey held stakes worth $137 million in Diebold Nixdorf, Incorporated (NYSE:DBD), compared to 17 in the previous quarter worth $180 million.
Just like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc. (NASDAQ:GOOG), Diebold Nixdorf, Incorporated (NYSE:DBD) is one of the stocks attracting the attention of growth investors.
In its Q4 2020 investor letter, Roubaix Capital LLC, an asset management firm, highlighted a few stocks and Diebold Nixdorf, Incorporated (NYSE:DBD) was one of them. Here is what the fund said:
“The largest detractor in the short portfolio during the fourth quarter was Diebold Nixdorf (DBD). The company’s primary business is selling automated teller machines to banks. We view the cash ecosystem as a structural share loser and several companies in this ecosystem are on our short focus list. While electronic payments continue to consistently take share, and while there was some concern about using paper money during the health crisis, DBD was able to post reasonable results. The stock has carried a low valuation as many stocks do when they have secular pressure. This low valuation allowed the stock to rally alongside the market in Q4 and we exited on our risk discipline. We will continue to monitor this stock and others in this ecosystem for opportunities to re-short when the risk-reward is more favorable.”
9. ChargePoint Holdings, Inc. (NYSE:CHPT)
Number of Hedge Fund Holders: 18
Real-Time Share Price as of December 12: $20.20
ChargePoint Holdings, Inc. (NYSE:CHPT) markets electric charging networks. The company recently posted earnings for the third quarter, reporting a revenue of more than $65 million, up more than 78% year-on-year.
Evercore ISI analyst James West recently initiated coverage of ChargePoint Holdings, Inc. (NYSE:CHPT) stock with an Outperform rating and a price target of $34, highlighting the “first mover” advantage the company had in the growing EV charging market.
At the end of the third quarter of 2021, 18 hedge funds in the database of Insider Monkey held stakes worth $97 million in ChargePoint Holdings, Inc. (NYSE:CHPT), up from 17 in the preceding quarter worth $149 million.
In its Q1 2021 investor letter, Alger, an asset management firm, highlighted a few stocks and ChargePoint Holdings, Inc. (NYSE:CHPT) was one of them. Here is what the fund 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.”
8. BlackBerry Limited (NYSE:BB)
Number of Hedge Fund Holders: 20
Real-Time Share Price as of December 12: $8.79
BlackBerry Limited (NYSE:BB) provides security software and services. In early October, the company revealed that it had signed a pact with analytics firm Deloitte to improve software supply chain security for original equipment manufacturers.
BlackBerry Limited (NYSE:BB) stock has rallied this year, returning 32% to investors since January. Most of this boom is attributable to the interest in the company from retail investors on Reddit and Robinhood.
Among the hedge funds being tracked by Insider Monkey, Canada-based investment firm Fairfax Financial Holdings is a leading shareholder in BlackBerry Limited (NYSE:BB) with 46 million shares worth more than $454 million.
At the end of the third quarter of 2021, 20 hedge funds in the database of Insider Monkey held stakes worth $569 million in BlackBerry Limited (NYSE:BB), the same as in the previous quarter worth $732 million.
7. Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC)
Number of Hedge Fund Holders: 21
Real-Time Share Price as of December 12: $10.41
Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC) markets communications infrastructure and software solutions. Communications giant AT&T has signed a deal with Ericsson to accelerate expansion of a nationwide 5G network.
In late November, Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC) announced that it would be acquiring Vonage, an American cloud communications provider, in a deal worth more than $6 billion for near-term revenue synergy opportunities.
At the end of the third quarter of 2021, 21 hedge funds in the database of Insider Monkey held stakes worth $227 million in Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC), up from 19 in the preceding quarter worth $228 million.
Among the hedge funds being tracked by Insider Monkey, New York-based firm Renaissance Technologies is a leading shareholder in Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC) with 4 million shares worth more than $45 million.
6. Nokia Corporation (NYSE:NOK)
Number of Hedge Fund Holders: 22
Real-Time Share Price as of December 12: $6.02
Nokia Corporation (NYSE:NOK) provides mobile and fixed network solutions. On December 8, the company featured on a list of top picks for 2022 by investment bank Morgan Stanley. The bank noted improved margins and 5G spending as reasons behind the bullish outlook.
Nokia Corporation (NYSE:NOK) recently announced that it will be pursuing a goal to use 100% renewable electricity by 2025. The company had earlier committed to cutting carbon emissions by 50% across its value chain.
At the end of the third quarter of 2021, 22 hedge funds in the database of Insider Monkey held stakes worth $388 million in Nokia Corporation (NYSE:NOK), compared to 26 in the previous quarter worth $494 million.
Among the hedge funds being tracked by Insider Monkey, Boston-based firm Arrowstreet Capital is a leading shareholder in Nokia Corporation (NYSE:NOK) with 22 million shares worth more than $123 million.
Along with Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc. (NASDAQ:GOOG), Nokia Corporation (NYSE:NOK) is one of the stocks on the radar of elite investors.
5. Pacific Biosciences of California, Inc. (NASDAQ:PACB)
Number of Hedge Fund Holders: 27
Real-Time Share Price as of December 12: $20.88
Pacific Biosciences of California, Inc. (NASDAQ:PACB) develops sequencing systems for complex genetic problems. The company recently beat market estimates on earnings per share and revenue for the third quarter by $0.01 and $1.2 million respectively.
In September, Canaccord analyst Kyle Mikson initiated coverage of Pacific Biosciences of California, Inc. (NASDAQ:PACB) stock with a Buy rating and a price target of $45, noting the potential of the “differentiated” tech of the firm in the sequencing domain compared to peers.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm ARK Investment Management is a leading shareholder in Pacific Biosciences of California, Inc. (NASDAQ:PACB) with 22 million shares worth more than $580 million.
In its Q1 2021 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Pacific Biosciences of California, Inc. (NASDAQ:PACB) was one of them. Here is what the fund said:
“Pacific Biosciences of California, Inc. provides long-read DNA sequencing systems to scientists conducting genetic analysis. Shares performed well for the quarter. We believe there is increasing excitement about the potential for its platform to move beyond research into clinical applications. The recently appointed CEO was previously Chief Commercial Officer at Illumina, and we think he is well qualified to commercially execute on Pacific Biosciences’ differentiated long-read platform.”
4. Sabre Corporation (NASDAQ:SABR)
Number of Hedge Fund Holders: 31
Real-Time Share Price as of December 12: $8.85
Sabre Corporation (NASDAQ:SABR) provides technology solutions for the travel industry. The firm recently entered into a multi-year partnership with payments giant American Express to develop technologies for corporate travel distribution.
Sabre Corporation (NASDAQ:SABR) posted earrings for the third quarter in early November, beating estimates on earnings per share by $0.05. The revenue over the period was $441 million, up 58% year-on-year.
At the end of the third quarter of 2021, 31 hedge funds in the database of Insider Monkey held stakes worth $877 million in Sabre Corporation (NASDAQ:SABR), compared to 37 in the preceding quarter worth $972 million.
3. Flex Ltd. (NASDAQ:FLEX)
Number of Hedge Fund Holders: 35
Real-Time Share Price as of December 12: $17.29
Flex Ltd. (NASDAQ:FLEX) provides electronic manufacturing and supply chain services. In October, the company had announced the acquisition of Anord Mardix, a critical power solutions firm, in a deal worth $450 million as part of a plan to expand in the data center market.
In earnings results for the third quarter, posted on October 27, Flex Ltd. (NASDAQ:FLEX) reported earnings per share of $0.48, smashing predictions by $0.08. The revenue over the period was $6.2 billion, up over 3% year-on-year.
At the end of the third quarter of 2021, 35 hedge funds in the database of Insider Monkey held stakes worth $1.1 billion in Flex Ltd. (NASDAQ:FLEX), compared to 43 the preceding quarter worth $1.4 billion.
In its Q4 2020 investor letter, Sound Shore Management, an asset management firm, highlighted a few stocks and Flex Ltd. (NASDAQ:FLEX) was one of them. Here is what the fund said:
“Our third quarter addition of contract manufacturer Flex provides a great example. Originally an electronics-focused outsource manufacturer with highly cyclical cash flows and short product lifecycles, the company has evolved its customer base toward the capital goods, automotive and healthcare industries. Having successfully recast itself as a longer-cycle, “new industrial,” Flex’s stock is benefitting from more stable and diversified cash flows and more consistent revenue growth. CEO Revathi Advaithi joined in early 2019 and she has refocused the company by accelerating the transition to these longer-cycle businesses. Moreover, the company has been shareholder oriented, using the company’s ample free cash to reduce shares outstanding by 35% in the last decade. Lastly, Flex’s Nextracker division should provide nice upside. The solar tracking company manufactures motors, software and systems for utility-scale power generation projects and business is growing quickly as the shift toward sustainable energy sources hastens. We believe Nextracker is underappreciated and could represent a significant amount of hidden value. At 13 times earnings Flex is a very attractive risk reward opportunity.”
2. Paysafe Limited (NYSE:PSFE)
Number of Hedge Fund Holders: 42
Real-Time Share Price as of December 12: $3.98
Paysafe Limited (NYSE:PSFE) provides digital commerce solutions to online businesses. The stock has climbed more than 4% in the past few days after the CEO of the firm and other high ranking executives purchased shares worth $2.8 million in the firm.
Paysafe Limited (NYSE:PSFE) recently revealed that it had partnered with tech giant Huawei for online cash payments in the Huawei App Gallery. Under the deal, Paysafe will roll out the Paysafecard to consumers in most parts of Europe.
At the end of the third quarter of 2021, 42 hedge funds in the database of Insider Monkey held stakes worth $597 million in Paysafe Limited (NYSE:PSFE).
1. Ford Motor Company (NYSE:F)
Number of Hedge Fund Holders: 51
Real-Time Share Price as of December 12: $21.45
Ford Motor Company (NYSE:F) makes and sells automotives. In early December, the company reported sales numbers for November, revealing 5.5% year-on-year sales growth in the US with EV sales growing at over 150%, more than three times the average for the overall EV market.
Ford Motor Company (NYSE:F) stock has rallied in recent weeks after the firm announced plans to be the second-largest electric vehicle producer within two years. The company plans to hit annual production capacity of 600,000 units to achieve that goal.
At the end of the third quarter of 2021, 51 hedge funds in the database of Insider Monkey held stakes worth $1.6 billion in Ford Motor Company (NYSE:F), compared to 55 in the preceding quarter worth $2.1 billion.
In its Q1 2020 investor letter, Greenlight Capital Fund, an asset management firm, highlighted a few stocks and Ford Motor Company (NYSE:F) was one of them. Here is what the fund said:
“General Motors (GM) was a disappointment. The damage from last year’s strike consumed most of the cash flow GM would have otherwise generated in 2019. We had expected a strong bounce back in earnings and cash flow in 2020, but the annual guidance, while meeting Wall Street expectations, was worse than we expected. Further, the cash burned during the strike needed to be re-earned in order to protect GM’s investment grade rating. Pre-crisis, there would have been, at best, a minimal share repurchase late in the year. At the analyst day, our hopes that 2020 would finally be the year were dashed. We sold our stock. Over our five-year holding period, we made a 9.6% IRR on GM. In the difficult environment, its most comparable peer, Ford, lost about half its value.”
You can also take a peek at 12 Best Environmental Stocks to Invest In and 10 Best Nickel Stocks to Buy Now.
Follow Insider Monkey on Twitter
Suggested Articles:
- 10 Best Automotive Stocks to Invest in Now
- 10 Best Self Driving Car Stocks to Invest In
- 10 Best Renewable Energy Stocks to Buy According to Hedge Funds
Disclosure. None. 10 Very Cheap Stocks to Buy Right Now is originally published on Insider Monkey.
