Cheap Stocks To Buy That Will Rise
Cheap Stocks To Buy That Will Rise ::: https://urlin.us/2tm2BT
The truth is that many great companies get dinged in short-term market drops but tend to perform very well over time. When you know which metrics of quality to track to uncover cheap stocks to buy, you can pick winners that the market may reward with higher prices after the dip.
We have identified nine cheap stocks to buy that have fallen along with the S&P 500 over the last year and have yet to recover. Each company has a multiyear history of growing earnings per share (EPS) and revenue, and analysts are still expecting similar growth in the years ahead.
Please note that the stocks above were selected by an experienced financial analyst, but they may not be right for your portfolio. Before you decide to purchase any of these stocks, do plenty of research to ensure they are aligned with your financial goals and risk tolerance.
With any investment, there is a degree of risk as well as return. When deciding which cheap stocks to buy, here are key factors to keep in mind: P/E ratio, price-to-book value, cash flow and earnings reports.
Earnings reports offer a wealth of information on companies, including their profits and losses. They also note whether a company performed as expected for a given period. Digging into past earnings reports can help you anticipate future performance and decide whether cheap dividend stocks are a good buy.
In that case, stocks that trade at a relatively low multiple of earnings with good growth may do better than the hypergrowth yet profitless tech stocks that dominated over the past five to 10 years, because of the effect of interest rates on growth stock valuations.
Fortunately, despite strong year-to-date gains, there are still ample opportunities to find low-priced, high-quality stocks throughout the market. Here are three names -- two in the tech space, and one natural gas producer -- that should reward shareholders handsomely in the year ahead.
While some investors are concerned about the rapid rise of OpenAI's ChatGPT and its potential threat to Google Search, Alphabet has been investing heavily in artificial intelligence for the better part of a decade. In last week's earnings release, CEO Sundar Pichai hinted that a number of AI-related services would be coming out soon, including a ChatGPT competitor called LaMDA. Alphabet will actually be changing some of its financial reporting as well, to highlight future AI-driven growth within Alphabet.
If you think 20 times earnings is a small price to pay for an artificial intelligence leader, Super Micro Computer (SMCI 2.79%) is also leveraged to big AI trends, and its stock only trades at 7.25 times earnings! Even more remarkable, that cheap valuation remains even after the stock more than doubled over the past year. So Super Micro didn't benefit from a multiple rerating -- its success is all related to earnings growth.
One screamingly cheap and shareholder-friendly natural gas stock is CNX Resources (CNX 0.25%), a U.S. natural gas driller that operates in Pennsylvania, West Virginia, and Ohio, and owns 2,600 miles of gas gathering pipelines and other processing facilities.
That's a pretty great free cash flow yield in a low-price environment for natural gas. And should natural gas prices spike higher as they did last year, CNX's cash flow will rise and become even more of a bargain.
With that out of the way, let's acknowledge that many investors look at high-priced stocks and wonder if they should bother adding such a pricey investment to their portfolio when they can only buy one or two shares. Instead, they find cheap stocks under $10 as a more attractive option.
A long-term look doesn't show a ton of share price volatility, either to the upside or the downside, but one very important thing to note is that this cheap stock offers a tremendously generous dividend as it passes on a portion of those monthly phone bills.
As with many other cheap stocks in emerging markets, the risk here is that local disruptions affect MBT. After all, if this c