In this article, we will take a look at the 10 best one dollar stocks to buy now. To see more such companies, go directly to 5 Best One Dollar Stocks to Buy Now.
In its mid-year outlook report for 2023 entitled “The Recession Obsession,” JPMorgan gave some “good news” that it believes the market has already bottomed and investors are not likely to experience the lows seen in last October. The report said that investors were “right” to sell stocks in 2022 amid a broader downturn but the firm believes now is the time to increase exposure. However, JPMorgan does not believe we are in a bull market and thinks market volatility will continue through the second half of 2023. JPMorgan noted that analysts’ earnings estimates for the US, Europe and China for the next 12 months have started to move higher. Some of the reasons driving this trend include a weakening dollar (which is a good thing for US exporters), strong sales, moderating energy and transportation costs.
The JPMorgan report highlights that while everybody is obsessed with recession and continues to look over their shoulder for an upcoming disaster, many are ignoring the fact that several industries have already seen recession-related effects. For example, the report said that tech stocks took a beating in 2022 and the industry saw massive layoffs and cost-cutting measures. Tech stocks then rebounded and rallied in 2023. JPMorgan also gave example of semiconductor stocks which were devastated in 2022 amid demand issues. JPMorgan said it believes the inventory glut problem in the semiconductor industry is “nearly gone” thanks in part to AI. Another indicator of the market rebound comes from homebuilder stocks, which fell about 40% in 2022. The industry is now rebounding amid stabilization of mortgage rates and rising demand of houses amid limited supply.
JPMorgan said that it still expects market selloffs to get triggered. It acknowledges that inflation is sticky, rising interest rates have made it difficult for Americans to access money and “regional banks aren’t out of the woods yet.” However, the bank said any selloffs should be seen as buying opportunities.
“The Time to Pounce”
JPMorgan also advised investors to consider small- and mid-cap stocks in addition to getting exposure to larger companies.
“Beyond your core equity allocation that you hold as part of a multi-asset portfolio, we think you should consider mid- and small-cap companies to complement large-cap holdings, and focus on themes such as dividend growth, the energy transition and the next wave of digital innovation. Across sectors, we prefer healthcare and technology stocks. Strategies such as hedge funds, structured notes or other hedged equity vehicles can help investors maintain their exposures while potentially generating income and mitigating downside risks. Private equity can continue to be an effective way to invest over multiple years. The risks are real. They may well create choppy markets that will in turn provide a potential opportunity to deploy excess cash. Markets dip when investors are fearful. That is often the time to pounce.”
JPMorgan isn’t alone in this optimism. Many analysts believe the bull market that started in June is here to stay as financial markets have already suffered a lot and there are several indicators that point to positive sentiment in the future. Last month, LPL Research said in a report that the demand for equities is rising and the S&P 500 index crossed its longer-term 200-day moving average (dma) which is a strong bull market indicator. Some of the biggest beneficiaries of the latest bull market were communication services, consumer discretionary, industrials and technology sectors. On the other hand, defensive sectors like consumer staples and utilities are underperforming.
LPL Research also believes the current bull market is here to say. Here’s what the report said:
“Of course, we don’t know when the next bear market will arrive, but based on history, there is a good chance it doesn’t show up for quite a while. The duration of a bull market can vary significantly, but historically they have been long-lasting. Since 1957, the average S&P 500 bull market has lasted 59.2 months and produced an average cumulative gain of 169.3% However, bull markets are not linear and have experienced average maximum drawdowns of 13.2%, similar to the average maximum S&P 500 drawdown in any year of 14.3%.”
Bull market or not, there is a strange trend that is undeniably worrying for stock investors. The winner-take-all element is becoming stronger by the day in the US stock market. A research conducted by Hendrik Bessembinder of the Carey School of Business at Arizona State University and his team found that Apple Inc., Microsoft Corp., Amazon.Com Inc., Alphabet Inc. and Exxon Mobil Corp. accounted for 8.3% of global net wealth creation in about two decades.
But an encouraging data point in the same research proved what successful investors like Warren Buffett have been reiterating year after year: the real benefits of stock investing become visible over the long term. The research shows that stock returns compound as you increase the time window of the holding period. When compared to Treasury bills, stocks outperform just 1% for any one month on average, about 14% for a year, 95% for a decade and 260% for the 29-year sample period in the research.
Photo by Marga Santoso on Unsplash
Our Methodology
For this article, we scanned Insider Monkey’s database of 943 hedge funds and picked 10 stocks trading at $1 or less as of July 8 with the highest number of hedge fund investors.
Best One Dollar Stocks to Buy Now
10. WeWork Inc. (NYSE:WE)
Number of Hedge Fund Holders: 23
Softbank-backed WeWork Inc. (NYSE:WE) that once made a lot of waves has struggled to make its mark ever since it went public back in 2021. WeWork Inc. (NYSE:WE) has lost about 80% year to date through July 9.
As of the end of the first quarter of 2023, 23 hedge funds in Insider Monkey’s database had stakes in WeWork Inc. (NYSE:WE).
In May, WeWork Inc. (NYSE:WE) said its CFO Andre Fernandez will resign.
9. ViewRay, Inc. (NASDAQ:VRAY)
Number of Hedge Fund Holders: 22
Shares of MRI-guided radiation therapy system company ViewRay, Inc. (NASDAQ:VRAY) has been struggling this year as the company pulled its guidance, posted disappointing quarterly figures and received analyst downgrades. Nonetheless, as of the end of the first quarter of this year, 22 hedge funds had stakes in ViewRay, Inc. (NASDAQ:VRAY), according to Insider Monkey’s proprietary database of 943 hedge funds and their holdings.
ViewRay, Inc. (NASDAQ:VRAY) earlier this year also revealed that it was considering strategic options, including a sale or merger. ViewRay, Inc. (NASDAQ:VRAY) also announced a cost reduction plan that would generate about $19 million to $23 million in cost savings annually.
Baron Discovery Fund made the following comment about ViewRay, Inc. (NASDAQ:VRAY) in its Q1 2023 investor letter:
“ViewRay, Inc. (NASDAQ:VRAY) sells equipment that enables MRI-guided radiation treatment of cancer. This equipment allows for real-time imaging of a patient’s tumor location and therefore accurate radiation delivery, even if the tumor moves during treatment. Shares declined on investor concerns around the company’s deposits at and loan commitments from Silicon Valley Bank. Our understanding is that the deposits are now secure and that ViewRay is in compliance with all debt covenants. Adoption of ViewRay’s equipment and MRI-guided radiation therapy has been accelerating on impressive early clinical trial results in pancreatic and prostate cancer and as patients have started “voting with their feet” and seeking treatment at centers with the capability to administer MRI-guided treatment. The company’s order book for new machines continues to accelerate. While supply-chain constraints may limit upside to 2023 installations, we still expect nearly 40% growth for the year and meaningfully higher sales in coming years.”
8. Getaround, Inc. (NYSE:GETR)
Number of Hedge Fund Holders: 21
California-based online car sharing service Getaround, Inc. (NYSE:GETR) ranks 8th in our list of the best one dollar stocks to buy. Getaround, Inc. (NYSE:GETR) jumped in May after the company said it will buy substantially all of the assets of competitor HyreCar (OTCPK:HYREQ) for $9.45 million. The deal is expected to add about $75 million of run-rate annualized gross booking value and contribute to positive adjusted EBITDA for Getaround, Inc. (NYSE:GETR).
In February 2023 Getaround, Inc. (NYSE:GETR) had announced plans to reduce costs, which included a 10% workforce reduction.
Out of the 943 hedge funds tracked by Insider Monkey, 21 hedge funds had stakes in Getaround, Inc. (NYSE:GETR). The biggest hedge fund stakeholder of Getaround, Inc. (NYSE:GETR) was
7. Tupperware Brands Corporation (NYSE:TUP)
Number of Hedge Fund Holders: 20
Storage containers and kitchen products company Tupperware Brands Corp
Tupperware Brands Corporation (NYSE:TUP) ranks 7th in our list of the best one dollar stocks to buy according to hedge funds. Insider Monkey’s database shows that 20 hedge funds had stakes in Tupperware Brands Corporation (NYSE:TUP) at the close of the March quarter. The total worth of these stakes was $16 million. The biggest stakeholder of Tupperware Brands Corporation (NYSE:TUP) was DE Shaw which had a $5.1 million stake in the company.
Miller Value Deep Value Strategy made the following comment about Tupperware Brands Corporation (NYSE:TUP) in its Q4 2022 investor letter:
“During the quarter we only had one detractor, Tupperware Brands Corporation (NYSE:TUP) whose share price was down more than 30%. The company is in a midst of a multi-year transformation focused on enhancing their global direct selling business, expanding their omnichannel presence, exiting non-core assets, rolling out new product innovation and enhancing the company technology and supply chain. Tupperware’s revenues have been adversely impacted by significant market weakness in Europe and China along with the company experiencing weaker volumes from implementing recent price increases. Management has undertaken a $100M cost reduction program and with the recent price actions beginning to offset commodity price pressures, the company should see profitability and cash flow generation improve over the coming year. In addition, management continues to make incremental investments in the business to further expand their omni-channel efforts and modernize their infrastructure. While it will take longer for the company to complete the turnaround plan, we believe the current share price has limited value for successfully completing the transformation.”
6. comScore, Inc. (NASDAQ:SCOR)
Number of Hedge Fund Holders: 18
Media analytics and data company comScore, Inc. (NASDAQ:SCOR) ranks 6th in our list of the best one dollar stocks to buy according to hedge funds.
In the company’s Q1 earnings call in May, comScore, Inc. (NASDAQ:SCOR) management talked about future estimates and expectations.
“Our core operating expenses were down 6% year-over-year with a large part of that due to lower employee compensation. We’re continuing to execute on the restructuring plan we put in place last year, which is and will continue to contribute to lower compensation cost as we move through the year. We’ve also identified and are accelerating other initiatives to transform our business operations and drive additional efficiencies in the latter part of 2023 and into 2024. Regarding our full year guidance, I’ll reiterate what Jon mentioned at the top of the call. We’re maintaining our guidance for revenue growth of low to mid-single digits over 2022. However, we do note pressure on achieving the high end of that range. Even with the top line pressure, we remain confident in the guidance that we previously provided for adjusted EBITDA.”
Out of the 943 hedge funds tracked by Insider Monkey, 18 funds reported owning stakes in comScore, Inc. (NASDAQ:SCOR). The biggest stakeholder of comScore, Inc. (NASDAQ:SCOR) was Jim Tarantino and Chris Galvin’s Westerly Capital Management with a $5.9 million stake in the company.
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Disclosure: None. 10 Best One Dollar Stocks to Buy Now is originally published on Insider Monkey.
