In this article, we will take a look at 10 stocks under $50 to buy. If you want to see more stocks under $50 to buy, go directly to 5 Stocks Under $50 to Buy Now.
According to the Labor Department on Friday, the U.S economy gained 263,000 jobs, and the unemployment rate stayed at 3.7%. Furthermore, the average hourly pay rose 5.1% year over year in November, a welcome increase for workers who have to deal with inflation.
In terms of inflation, October’s core personal consumption expenditures price index rose 5% year over year versus September’s rise of 5.2% year over year. The metric, which is favored by the Federal Reserve, was better than some expectations and indicated that inflation could potentially be peaking.
Perhaps in part due to the good October core inflation data, Federal Reserve Chairman Jerome Powell said in late November, “Thus, it makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down. The time for moderating the pace of rate increases may come as soon as the December meeting.”
With slower interest rate increases, potentially peaking inflation, and a still strong job market, the broader market has rallied recently with the S&P 500 index up almost 14% from its October lows.
While the data has been more positive of late, many wonder if inflation will stay high for longer than what the market is expecting or if interest rates will go higher than what the market is pricing in.
Indeed, former Treasury Secretary Lawrence Summers recently said that the thought interest rates might need to increase more than the market is judging.
If interest rates stay high for too long or they rise too high, there’s a chance that the economy might enter into a recession and many stocks might not do so well. Given the uncertainty, it could be a good idea for long term investors to own a well diversified portfolio of stocks across many different sectors.
New York Stock Exchange
Image: flickr.com
Methodology
For our list of 10 Stocks Under $50 to Buy Now, we picked 10 companies with earnings growth potential and we ranked them based on the number of hedge funds in our database that held shares in the same stock at the end of the third quarter.
10 Stocks Under $50 to Buy Now
10. Huntington Bancshares Incorporated (NASDAQ:HBAN)
Number of Hedge Fund Holders: 23
Huntington Bancshares Incorporated (NASDAQ:HBAN) is a regional bank whose shares have rallied from under $7.25 to $15.46 on December 3. Although shares of Huntington Bancshares Incorporated (NASDAQ:HBAN) could have downside if there is a recession next year, the bank remains attractive long term given its normalized earnings power. Out of the 920 hedge funds in our database, 23 were long Huntington Bancshares Incorporated (NASDAQ:HBAN) at the end of Q3 2022.
Alongside Hewlett Packard Enterprise Company (NYSE:HPE), GlaxoSmithKline plc (NYSE:GSK), and CSX Corporation (NYSE:CSX), Huntington Bancshares Incorporated (NASDAQ:HBAN) is a stock under $50 that many hedge funds in our database owned at the end of Q3 2022.
9. Keurig Dr Pepper Inc. (NASDAQ:KDP)
Number of Hedge Fund Holders: 23
Keurig Dr Pepper Inc. (NASDAQ:KDP) is a consumer beverage company that has seen shares more than triple since 2014. Oakmark Global Fund describes Keurig Dr Pepper Inc. (NASDAQ:KDP)’s long term business potential in a Q4 2020 investor letter,
Keurig Dr Pepper is one of North America’s leading beverage companies and commands dominant positions in single-serve coffee and flavored sodas. We believe single-serve coffee pods will capture almost all of the incremental growth in at-home coffee consumption. Many consumers find that K-Cups offer better convenience, quality, variety and value, compared to drip brewing. Keurig’s competitive advantages (low-cost production, the largest installed base of brewers, exclusive brand partnerships) allow it to collect a toll on most pods sold in North America. The company’s soda franchises remain highly profitable, and we do not expect health-related concerns about sugar to materially impact consumption trends. We believe that Keurig’s brands should deliver steady growth, consistent market share gains and significant excess cash.
Given Keurig Dr Pepper Inc. (NASDAQ:KDP)’s stock performance since 2021, Oakmark Global Fund’s description as been accurate so far. There could be more growth in the future if Keurig Dr Pepper Inc. (NASDAQ:KDP) maintains its market share.
8. Hormel Foods Corporation (NYSE:HRL)
Number of Hedge Fund Holders: 29
Hormel Foods Corporation (NYSE:HRL) is a packaged foods company whose shares have more than doubled from 10 years ago. Given the macroeconomic headwinds this year, Hormel Foods Corporation (NYSE:HRL)’s results have been weaker than expected in some ways. In Q4, the company reported EPS of $0.51 on sales of $3.3 billion versus the consensus of $0.50 on revenue of $3.38 billion. For FY23, Hormel Foods Corporation (NYSE:HRL) sees EPS of $1.83 to $1.93 versus the consensus of $2. Nevertheless, Hormel Foods Corporation (NYSE:HRL) shares are only down 2.4% year to date and the company still has a lot of potential. 29 hedge funds in our database owned shares of Hormel Foods Corporation (NYSE:HRL).
7. ICICI Bank Limited (NYSE:IBN)
Number of Hedge Fund Holders: 29
ICICI Bank Limited (NYSE:IBN) is one of India’s leading banks whose shares have performed very well since 2012. Although shares fell substantially during the pandemic, India’s economy has recovered since then and ICICI Bank Limited (NYSE:IBN) stock is near an all time high. With higher interest rates, ICICI Bank Limited (NYSE:IBN) also has an easier time making money. While the broader market has declined this year in the United States, ICICI Bank Limited (NYSE:IBN) stock is up 17.2% year to date. 29 hedge funds we track owned shares in ICICI Bank Limited (NYSE:IBN) at the end of the third quarter, ranking the company #7 on our list of 10 Stocks Under $50 to Buy Now.
6. KeyCorp (NYSE:KEY)
Number of Hedge Fund Holders: 33
KeyCorp (NYSE:KEY) is a regional bank whose shares have increased in the long term. With the current macroeconomic headwinds, however, shares of KeyCorp (NYSE:KEY) have fallen almost 20% year to date. As a result, the bank trades for a forward P/E ratio of 9.02 and has a dividend yield of 4.42%. Although the bank could have downside if there is a recession next year, KeyCorp (NYSE:KEY) has a fairly attractive valuation that could offer upside if market sentiment normalizes. 33 hedge funds in our database owned shares at the end of the third quarter, ranking KeyCorp (NYSE:KEY) #6 on our list of 10 Stocks Under $50 to Buy Now.
Like KeyCorp (NYSE:KEY), Hewlett Packard Enterprise Company (NYSE:HPE), GlaxoSmithKline plc (NYSE:GSK), and CSX Corporation (NYSE:CSX) are stocks under $50 that many hedge funds in our database owned at the end of the third quarter.
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Disclosure: None. 10 Stocks Under $50 to Buy Now is originally published on Insider Monkey.
