In this article, we discuss the 10 very cheap stocks to buy right now. If you want to skip our detailed analysis of these stocks, go directly to the 5 Very Cheap Stocks to Buy Right Now.
Conventional wisdom would suggest that inflation worries over the past few months would have given value stocks more time in the limelight. However, it seems like retail investors pay little or no heed to convention at the market. They have continued to pour into cheap stocks in the technology sector that promise “faster-than average” profit growth. Even as investors pull out more than $2 billion from tech-focused mutual and exchange traded funds between September and November, according to the EPFR tracker, individual growth options remain in the clear.
The retail investor strategy stands in stark contrast to the institutional investor activity. EPFR data indicates that institutional investors have piled into value-oriented sectors like utilities, healthcare, and consumer goods as inflation fears mount. However, as the valuations of tech giants like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc. (NASDAQ:GOOG) reach new highs, both retail and institutional investors are exploring the market for cheap stocks.
Greg Hahn, the chief investment officer of Indianapolis-based Winthrop Capital Management, told The Wall Street Journal last month that his investment firm was scaling back exposure to tech giants. Instead, the investor said, the company would focus on finding businesses with strong balance sheets and reasonable valuations. Hahn reasoned that this “shift” in focus was preparation for a rough market cycle ahead. Along with Hahn, other famous investors, like Michael Burry, have also sounded the alarm around large-cap tech valuations.
Photo by Marga Santoso on Unsplash
Our Methodology
The companies that are trading at relatively cheap prices compared to their growth potential were identified for the list. The real-time share prices of the stocks, as of December 12, are mentioned alongside other details for further clarity. All the firms listed below are priced under $25 per share.
In order to provide readers with some context for their investment choices, the business fundamentals and analyst ratings for the stocks were also considered. Hedge fund sentiment was included as a classifier as well.
The hedge fund sentiment around each stock was calculated using the data of 867 hedge funds tracked by Insider Monkey.
Very Cheap Stocks to Buy Right Now
10. Diebold Nixdorf, Incorporated (NYSE:DBD)
Number of Hedge Fund Holders: 13
Real-Time Share Price as of December 12: $8.56
Diebold Nixdorf, Incorporated (NYSE:DBD) provides connected commerce solutions. The company operates through banking and retail segments.
Diebold Nixdorf, Incorporated (NYSE:DBD) posted earnings for the third quarter in late October, reporting earnings per share of $0.34 and a revenue of $958 million. It also raised full year-guidance numbers, saying that it expected total revenue of $3.9 billion to $3.95 billion against estimates of over $4 billion.
Among the hedge funds being tracked by Insider Monkey, California-based firm Beach Point Capital Management is a leading shareholder in Diebold Nixdorf, Incorporated (NYSE:DBD) with 4.9 million shares worth more than $49 million.
At the end of the third quarter of 2021, 13 hedge funds in the database of Insider Monkey held stakes worth $137 million in Diebold Nixdorf, Incorporated (NYSE:DBD), compared to 17 in the previous quarter worth $180 million.
Just like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc. (NASDAQ:GOOG), Diebold Nixdorf, Incorporated (NYSE:DBD) is one of the stocks attracting the attention of growth investors.
In its Q4 2020 investor letter, Roubaix Capital LLC, an asset management firm, highlighted a few stocks and Diebold Nixdorf, Incorporated (NYSE:DBD) was one of them. Here is what the fund said:
“The largest detractor in the short portfolio during the fourth quarter was Diebold Nixdorf (DBD). The company’s primary business is selling automated teller machines to banks. We view the cash ecosystem as a structural share loser and several companies in this ecosystem are on our short focus list. While electronic payments continue to consistently take share, and while there was some concern about using paper money during the health crisis, DBD was able to post reasonable results. The stock has carried a low valuation as many stocks do when they have secular pressure. This low valuation allowed the stock to rally alongside the market in Q4 and we exited on our risk discipline. We will continue to monitor this stock and others in this ecosystem for opportunities to re-short when the risk-reward is more favorable.”
9. ChargePoint Holdings, Inc. (NYSE:CHPT)
Number of Hedge Fund Holders: 18
Real-Time Share Price as of December 12: $20.20
ChargePoint Holdings, Inc. (NYSE:CHPT) markets electric charging networks. The company recently posted earnings for the third quarter, reporting a revenue of more than $65 million, up more than 78% year-on-year.
Evercore ISI analyst James West recently initiated coverage of ChargePoint Holdings, Inc. (NYSE:CHPT) stock with an Outperform rating and a price target of $34, highlighting the “first mover” advantage the company had in the growing EV charging market.
At the end of the third quarter of 2021, 18 hedge funds in the database of Insider Monkey held stakes worth $97 million in ChargePoint Holdings, Inc. (NYSE:CHPT), up from 17 in the preceding quarter worth $149 million.
In its Q1 2021 investor letter, Alger, an asset management firm, highlighted a few stocks and ChargePoint Holdings, Inc. (NYSE:CHPT) was one of them. Here is what the fund said:
“ChargePoint Holdings, Inc. was among the top detractors from performance. ChargePoint provides a network of electric vehicle (EV) charging stations globally. Like equities of many businesses geared to electric vehicles, ChargePoint shares underperformed in the first quarter of 2021 as part of a broad rotation away from high-growth technology companies with limited track records of performance as public companies. Longer term, Charge Point could potentially serve as a bellwether company of the fast growing EV category and we believe it is an attractive way to gain exposure to EV adoption without betting on whether a particular EV brand will win in the marketplace. Additionally, EVs are a massive end market.”
8. BlackBerry Limited (NYSE:BB)
Number of Hedge Fund Holders: 20
Real-Time Share Price as of December 12: $8.79
BlackBerry Limited (NYSE:BB) provides security software and services. In early October, the company revealed that it had signed a pact with analytics firm Deloitte to improve software supply chain security for original equipment manufacturers.
BlackBerry Limited (NYSE:BB) stock has rallied this year, returning 32% to investors since January. Most of this boom is attributable to the interest in the company from retail investors on Reddit and Robinhood.
Among the hedge funds being tracked by Insider Monkey, Canada-based investment firm Fairfax Financial Holdings is a leading shareholder in BlackBerry Limited (NYSE:BB) with 46 million shares worth more than $454 million.
At the end of the third quarter of 2021, 20 hedge funds in the database of Insider Monkey held stakes worth $569 million in BlackBerry Limited (NYSE:BB), the same as in the previous quarter worth $732 million.
7. Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC)
Number of Hedge Fund Holders: 21
Real-Time Share Price as of December 12: $10.41
Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC) markets communications infrastructure and software solutions. Communications giant AT&T has signed a deal with Ericsson to accelerate expansion of a nationwide 5G network.
In late November, Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC) announced that it would be acquiring Vonage, an American cloud communications provider, in a deal worth more than $6 billion for near-term revenue synergy opportunities.
At the end of the third quarter of 2021, 21 hedge funds in the database of Insider Monkey held stakes worth $227 million in Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC), up from 19 in the preceding quarter worth $228 million.
Among the hedge funds being tracked by Insider Monkey, New York-based firm Renaissance Technologies is a leading shareholder in Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC) with 4 million shares worth more than $45 million.
6. Nokia Corporation (NYSE:NOK)
Number of Hedge Fund Holders: 22
Real-Time Share Price as of December 12: $6.02
Nokia Corporation (NYSE:NOK) provides mobile and fixed network solutions. On December 8, the company featured on a list of top picks for 2022 by investment bank Morgan Stanley. The bank noted improved margins and 5G spending as reasons behind the bullish outlook.
Nokia Corporation (NYSE:NOK) recently announced that it will be pursuing a goal to use 100% renewable electricity by 2025. The company had earlier committed to cutting carbon emissions by 50% across its value chain.
At the end of the third quarter of 2021, 22 hedge funds in the database of Insider Monkey held stakes worth $388 million in Nokia Corporation (NYSE:NOK), compared to 26 in the previous quarter worth $494 million.
Among the hedge funds being tracked by Insider Monkey, Boston-based firm Arrowstreet Capital is a leading shareholder in Nokia Corporation (NYSE:NOK) with 22 million shares worth more than $123 million.
Along with Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc. (NASDAQ:GOOG), Nokia Corporation (NYSE:NOK) is one of the stocks on the radar of elite investors.
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Disclosure. None. 10 Very Cheap Stocks to Buy Right Now is originally published on Insider Monkey.
