In this article, we discuss the top 10 stocks to buy under $15. The article also provides a detailed analysis of the global economy in 2022. If you want to skip that, you can go directly to Top 5 Stocks Under $15.
The first half of 2022 was a tough time for the U.S economy and the market struggled quite significantly. It was the worst start of the year since the Great Depression. The inflation touched a 40-year high of 9.1% and the first two-quarters of 2022 had negative GDP growth in the United States. Due to the high inflation, the Russian invasion of Ukraine, and Federal Reserve policies, the S&P 500 plummeted 21.3% in mid-June. Despite all the bleak circumstances, the commodities market was the only segment that performed well and delivered a third consecutive year of positive returns.
2022 Second Half Forecast
For the second half of 2022, the US Conference Board predicts that the GDP for the whole year will come in at around 1.7% on a YoY basis, and a recession might take place sometime in the later part of the year, till early 2023. It will also result in the growth slowing to 0.5%. According to an IMF report, the continued Russian invasion could suddenly stop the gas imports from Russia, which have already declined by 40% from the 2021 levels. Moreover, the renewed COVID outbreaks and escalation of the Chinese property section crisis might suppress the country’s growth. Keeping this outlook in mind, global growth could further decline to 2.6% by the end of 2022 and 2.0% in 2023.
On the other hand, according to JP Morgan, the markets should brace for a better second half of the year. The firm believes that inflation will drop in half from 9.4% to 4.2%, which would “allow central banks to pivot and avoid producing an economic downturn”. The bank further added that if the lockdowns do not resume, China’s economy could grow as much as 7.5%, which will be the main catalyst for global economic growth.
The analysts have remained bearish across most equity segments in the first half of 2022. However, JP Morgan noted that the portfolios are defensively positioned for recession outcomes and should manifest durability in the second half. Global Head of Equity Macro Research at J.P. Morgan, Dubravko Lakos-Bujas, added, “We believe the fundamental risk-reward for equities will be improving as we enter the second half of the year, with growth-policy tradeoff likely to turn, from both sides”.
Despite what the future holds for the global economy, the first half has contracted the wallets of potential investors in the US stock market. Resultantly, low-priced stocks become a much more attractive buy for investors. In this article, we have made a list of 10 affordable stocks to buy for under $15. Vodafone Group Public Limited Company (NASDAQ:VOD), Energy Transfer LP (NYSE:ET), and Harmonic Inc. (NASDAQ:HLIT) are some of the top contenders that are selling for less than $15.
Photo by Mohamed Hadji on Unsplash
Our Methodology
After careful assessment of the companies listed on the US stock market, we picked these 10 stocks based on their fundamentals, recent financial reports, future growth catalysts, dividend history, and analyst ratings. For some stocks, the growth over the years has also been taken into consideration. All of these stocks are priced below $15 as of August 29.
The hedge fund sentiment around the stocks has also been assessed, which has been taken from Insider Monkey’s Q2 2022 database of 895 elite hedge funds.
Top Stocks Under $15
10. Helix Energy Solutions Group, Inc. (NYSE:HLX)
Stock Price as of August 29: $4.58
Helix Energy Solutions Group, Inc. (NYSE:HLX) is a Texas-based oil and gas equipment and services company.
Around mid of May, Helix Energy Solutions Group, Inc. (NYSE:HLX) acquired Alliance group of companies for $120 million. According to the management, the company is expected to contribute an adjusted EBITDA of $25 million and add 15% to its consolidated revenue. Furthermore, on August 29, the company announced that it acquired a 62% interest in the Gulf of Mexico’s Thunder Hawk field. The field comprises three wells and related subsea infrastructure.
On July 27, Evercore ISI analyst Samantha Hoh upgraded Helix Energy Solutions Group, Inc. (NYSE:HLX) to Outperform from In Line and raised her price target on the firm to $8 from $6. In her upgrade note, the analyst added that the EBITDA is expected to increase by 200% to $58 million in 2H22 due to higher day rates and utilization in a strengthening offshore environment. She also mentioned that the recent acquisition of Alliance is “highly accretive.”
In addition to Vodafone Group Public Limited Company (NASDAQ:VOD), Energy Transfer LP (NYSE:ET), and Harmonic Inc. (NASDAQ:HLIT), Helix Energy Solutions Group, Inc. (NYSE:HLX) is one of the top stocks under $15.
9. Nokia Oyj (NYSE:NOK)
Stock Price as of August 29: $4.81
Nokia Oyj (NYSE:NOK) is a Finnish IT and consumer electronics company. The company’s main growth catalyst is its penetration of the 5G space. It has over 70 live 5G networks and 190 deals including a 5-year 5G deal with AST SpaceMobile, Inc. (NASDAQ:ASTS), and a recent agreement with Indian telecom operator Bharti Airtel for 5G radio access network (RAN) capacity in India.
At the end of the second quarter, Nokia Oyj (NYSE:NOK) reported an EPS of €0.10, outperforming the estimates by €$0.02. The revenue was around €290 million higher than the market consensus at €5.9 billion. In addition, the company’s operating profit increased by €80 million to €564 million over the year. The company exited the quarter with a net cash balance of €4.5 billion.
Nokia Oyj (NYSE:NOK) is heavily focused on shareholder returns. As of August 29, the company has a dividend yield of 0.57%. The company paid out €113 million through dividends in Q2 and plans to pay out €112 million in Q3. Moreover, by the end of the June quarter, Nokia Oyj (NYSE:NOK) had bought back shares worth €144 million and is further looking to return €600 million to shareholders in tranches over a period of two years. The company announced its repurchase of 252,000 and 251,300 shares on August 29 and 30, respectively.
8. Arcos Dorados Holdings Inc. (NYSE:ARCO)
Stock Price as of August 29: $7.73
Arcos Dorados Holdings Inc. (NYSE:ARCO) owns the master franchise of McDonald’s Corporation (NYSE:MCD) in 20 countries across Latin America and the Caribbean. In mid-June, the company shares were upgraded to Outperform from Neutral by Bradesco BBI analyst Richard Cathcart with a $12 price target.
Arcos Dorados Holdings Inc. (NYSE:ARCO) faced some challenges in the previous two years due to COVID restrictions. However, the company has rebounded at a significant pace. At the end of Q2 2022, the company recorded an EPS of $0.07, compared to $0.03 in Q2 2021. The revenues of $887.89 million recorded 49.8% YoY growth and a 12% increase from the previous quarter. The comparable system-wide sales were up by 47.9% from the same quarter in 2021, and the company’s adjusted EBITDA reached a second-quarter record of $92.4 million.
41% of Arcos Dorados Holdings Inc. (NYSE:ARCO) sales took place through its digital platform, which has over 10 million users. The closest competitor of the company was behind with a wide gap of over 6 million users. Furthermore, compared to the market average of 15%, Arcos Dorados Holdings Inc. (NYSE:ARCO) has revenue growth of 48%.
The financial stability of Arcos Dorados Holdings Inc. (NYSE:ARCO) is another driving factor for the company. At the end of Q2, the company had cash and cash equivalents of $289 million, comprising 12% of the total assets. The debt stands at $1.55 billion, while the Net Debt/EBITDA is 3.52x, making the company stable enough to cover its borrowings.
7. Hudson Technologies, Inc. (NASDAQ:HDSN)
Stock Price as of August 29: $8.93
Hudson Technologies, Inc. (NASDAQ:HDSN) is an American company, focusing on the supply and reclaiming of refrigerants. According to the Insider Monkey database, 14 hedge funds had a stake in the company, valued at $67 million at the end of Q2. Royce & Associates increased its holdings by 44% in the company in the quarter ending June 30 and was the largest stakeholder with shares worth $12.596 million.
In the second quarter of 2022, Hudson Technologies, Inc. (NASDAQ:HDSN) beat its revenue estimates by 8.23% and made a 71.7% jump on a YoY basis to $103.9 million. The EPS beat was much more significant after the company reported $0.89 of earnings per share, compared to the $0.39 consensus.
If we compare the first half of 2021 and 2022, the company’s net income increased by 580% to $69.4 million in 2022, compared to $10.2 million in the prior year. The gross margins increased by 2,200 bps to 55% and revenue represented a 100% YoY growth to $188.3 million.
Further growth drivers for Hudson Technologies, Inc. (NASDAQ:HDSN) include its recent deal with Lennox International Inc. (NYSE:LII) to become the company’s exclusive supplier of certified reclaimed refrigerants for the aftermarket support of their residential HVAC systems. This deal will help Hudson Technologies, Inc. (NASDAQ:HDSN) increase its market share, which already stands at 35%, and will enable the company to penetrate a large part of the residential market.
6. Sibanye Stillwater Limited (NYSE:SBSW)
Stock Price as of August 29: $9.54
Sibanye Stillwater Limited (NYSE:SBSW) is a South African precious and base metals mining company. On August 26, Deutsche Bank analyst Abhi Agarwal reaffirmed a Buy rating on the firm and lowered the price target to $13 from $13.70.
Sibanye Stillwater Limited (NYSE:SBSW) makes it to our list due to its long-term buying opportunity owing to its diversity. Firstly, the company produces large quantities of palladium and rhodium, essential metals for the auto industry. The company also acquired the Sandouville nickel refinery in Le Havre, France in February to add nickel to its portfolio. Furthermore, due to the fast-growing EV industry, the company is also involved in battery metals. Sibanye Stillwater Limited (NYSE:SBSW) recently invested in the French battery cell company, Verkor, and is targeting to acquire a majority stake in the Finnish lithium hydroxide project, Keliber.
As of August 29, Sibanye Stillwater Limited (NYSE:SBSW) has a dividend yield of 8.17% and pays a dividend every 6 months. The latest bi-quarterly dividend of approximately $0.51 was declared on March 9 and paid out on July 4 to the shareholders of record on March 25.
Like Vodafone Group Public Limited Company (NASDAQ:VOD), Energy Transfer LP (NYSE:ET), and Harmonic Inc. (NASDAQ:HLIT), Sibanye Stillwater Limited (NYSE:SBSW) is also an affordable stock for portfolio diversification.
Here is what Desert Lion Capital had to say about Sibanye Stillwater Limited in its Q3 2021 investor letter:
“Sibanye Stillwater is one of the largest PGM (platinum group metal) producers in the world with major operations in South Africa and the U.S. They also have gold mining operations in SA. There is significant upside optionality in their growing lithium, nickel, and uranium activities, which are not yet contributing to earnings and not recognized by the market in SSW’s price.
During the third quarter, the company reported record earnings for the interim period ended June 2021. TTM EPS was R12.03, placing the stock on a PE multiple of 4. Cash generation was excellent, and the company is effectively debt free with surplus net cash. The management team continues to stay disciplined in their capital allocation, using cash profits to settle debt, repurchase 5% of the company’s shares at a discount, pay a healthy dividend (~11% annualized dividend yield), and expand their battery metals strategy with lithium and nickel acquisitions… (Click here to see the full text)
..Sibanye Stillwater is a well-managed, profitable business with excellent capital allocation discipline. I view it as a dividend-paying call option on the normalization of auto manufacturing, climate change initiatives, and inflation. The company’s lithium, nickel, and uranium activities also position them to participate in the continued drive towards “cleaner” energy, and so far, these options are not priced in at all.”
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Disclosure: None. Top 10 Stocks Under $15 is originally published on Insider Monkey.
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