In this article, we discuss the 10 cheap stocks to buy before Christmas. If you want to skip our detailed analysis of these stocks, go directly to the 5 Cheap Stocks to Buy Before Christmas.
Investors who are looking for a reliable short-term growth opportunity can make a safe bet on the stocks that are expected to benefit from the increase in retail sales during the holiday season. Almost all indicators point to a massive surge in consumer spending during the Christmas period, largely due to the normalization of the economy compared to the COVID-19 restrictions of 2020 that had limited the ability of shoppers to spend on gifts and other items. The National Retail Federation expects holiday sales to generate $860 billion in revenue.
Other predictions for the season paint a similar picture. For example, Deloitte, a professional services firm, has projected that holiday retail sales will jump 11% year-on-year in 2021 to jump over $1.2 trillion. Similarly, Bain, an emerging market research firm, claims in a conservative forecast that holiday sales will grow 7% year-on-year and reach $800 billion in value this year. Clothes, electronics, jewelry, and food stocks all stand to benefit from this boom. Even small companies, that trade cheaply on the market, will soar as revenues jump.
Investors who want exposure to some cheap but low-risk investments during the holiday season should check out some of the top stocks to buy before Christmas which include Paysafe Limited (NYSE:PSFE), Flex Ltd. (NASDAQ:FLEX), and Ambev S.A. (NYSE:ABEV), among others discussed in detail below.
Our Methodology
Here is our list of the 10 cheap stocks to buy before Christmas. All the firms listed below are priced under $20 per share and market products/services that have the potential to benefit from the holiday season coming up ahead.
The hedge fund sentiment around each stock was gauged using the data of 873 hedge funds tracked by Insider Monkey.
Why pay attention to hedge fund holdings? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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Cheap Stocks to Buy Before Christmas
10. MamaMancini’s Holdings, Inc. (NASDAQ:MMMB)
Number of Hedge Fund Holders: N/A
Share Price as of November 4, 2021: $2.65
MamaMancini’s Holdings, Inc. (NASDAQ:MMMB) operates in the packaged foods and meat industry. It sells frozen and refrigerated food products in the United States. During the holiday season, as families around the country gather together for dinners at their homes and in restaurants, the sales of the company tend to increase. The firm was recently awarded the QVC Food of the Month award for the 3-Cheese Beef and Turkey Meatballs it makes and sells.
In earnings results for the second quarter, posted on September 9, MamaMancini’s Holdings, Inc. (NASDAQ:MMMB) reported earnings per share of $0.01, in line with expectations. The revenue over the period was $12 million, beating predictions by $0.6 million.
In late August, MamaMancini’s Holdings, Inc. (NASDAQ:MMMB) had announced that it had secured a $10 million credit facility at M&T Bank with an interest rate of 3.5% to fund future acquisition plans of the firm.
Just like Paysafe Limited (NYSE:PSFE), Flex Ltd. (NASDAQ:FLEX), and Ambev S.A. (NYSE:ABEV), MamaMancini’s Holdings, Inc. (NASDAQ:MMMB) is one of the stocks with upcoming growth catalysts.
9. RAVE Restaurant Group, Inc. (NASDAQ:RAVE)
Number of Hedge Fund Holders: 3
Share Price as of November 4, 2021: $1.23
RAVE Restaurant Group, Inc. (NASDAQ:RAVE) owns and runs franchise pizza restaurants under the Pizza Inn brand name across the world. The restaurants offer buffet, express, and delivery options. The firm also runs the Pie Five brand. It has recently inked two important agreements for expansion of the franchise. The first is a deal to open three new locations in Palestine while the other promises the opening of five new stores in Qatar.
The fundamentals of RAVE Restaurant Group, Inc. (NASDAQ:RAVE) are also solid considering that it only has a market cap of around $22 million. In the fourth quarter results, the company reported a revenue of $2.3 million, up 46% year-on-year.
At the end of the second quarter of 2021, 3 hedge funds in the database of Insider Monkey held stakes worth $849,000 in RAVE Restaurant Group, Inc. (NASDAQ:RAVE), the same as in the preceding quarter worth $882,000.
8. LightInTheBox Holding Co., Ltd. (NYSE:LITB)
Number of Hedge Fund Holders: 4
Share Price as of November 4, 2021: $1.64
LightInTheBox Holding Co., Ltd. (NYSE:LITB) owns and runs a cross-border ecommerce platform. The platform is different from other ecommerce stocks as it procures products directly from the manufacturers to deliver to customers. The stock has soared in the past few weeks on the back of positive quarterly results and looks set to rise further as the holiday season approaches and the online shopping frenzy begins.
The share price of LightInTheBox Holding Co., Ltd. (NYSE:LITB) jumped over 16% in early September as quarterly results revealed an improvement in gross margin by 330 basis points and revenue jumped more than 7% year-on-year.
Among the hedge funds being tracked by Insider Monkey, New York-based firm Renaissance Technologies is a leading shareholder in LightInTheBox Holding Co., Ltd. (NYSE:LITB) with 2 million shares worth more than $4 million.
At the end of the second quarter of 2021, 4 hedge funds in the database of Insider Monkey held stakes worth $6.4 million in LightInTheBox Holding Co., Ltd. (NYSE:LITB), up from 2 in the preceding quarter worth $5.2 million.
7. Regis Corporation (NYSE:RGS)
Number of Hedge Fund Holders: 8
Share Price as of November 4, 2021: $3.09
Regis Corporation (NYSE: RGS) owns and operates hair styling and hair care salons. The company stands to benefit from the upcoming Christmas season as people flock to salons to prepare for the holiday meet-and-greets. Loop Capital analyst Laura Champine has a Buy rating on the stock with a price target of $6. The analyst believes the company can benefit from post-COVID recovery in the latter months of this year.
Regis Corporation (NYSE: RGS) recently posted earnings for the first fiscal quarter, reporting earnings per share of -$0.28, missing estimates by $0.15. The revenue over the period was $77 million, beating predictions by $7.4 million.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Royce & Associates is a leading shareholder in Regis Corporation (NYSE: RGS) with 1.8 million shares worth more than $17.6 million.
At the end of the second quarter of 2021, 8 hedge funds in the database of Insider Monkey held stakes worth $35 million in Regis Corporation (NYSE: RGS), down from 10 in the preceding quarter worth $173 million.
6. Arcos Dorados Holdings Inc. (NYSE:ARCO)
Number of Hedge Fund Holders: 10
Share Price as of November 4, 2021: $4.55
JPMorgan recently assumed coverage of Arcos Dorados Holdings Inc. (NYSE:ARCO) stock with an Overweight rating and a price target of $8.50, noting that quick service restaurants in Latin America could recover to 2019 levels by the end of 2021. Arcos owns and operates McDonald’s restaurants in twenty countries across Latin America. The holiday season looks set to jumpstart the post-pandemic recovery for the firm as the virus cases decline in the region.
Arcos Dorados Holdings Inc. (NYSE:ARCO) beat market predictions on earnings per share and revenue in the second quarter by $0.07 and $23 million respectively. It also announced in late July that it would distribute a stock dividend for 2021.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Moerus Capital Management is a leading shareholder in Arcos Dorados Holdings Inc. (NYSE:ARCO) with 4.7 million shares worth more than $28 million.
At the end of the second quarter of 2021, 10 hedge funds in the database of Insider Monkey held stakes worth $40 million in Arcos Dorados Holdings Inc. (NYSE:ARCO), down from 12 in the preceding quarter worth $50 million.
Along with Paysafe Limited (NYSE:PSFE), Flex Ltd. (NASDAQ:FLEX), and Ambev S.A. (NYSE:ABEV), Arcos Dorados Holdings Inc. (NYSE:ARCO) is one of the stocks that stands to gain in the coming months.
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Disclosure. None. 10 Cheap Stocks to Buy Before Christmas is originally published on Insider Monkey.
