In this article, we will take a look at 11 stocks under $20 to buy now. To skip our analysis of the recent market activity, you can go directly to see the 5 Stocks Under $20 to Buy Now.
Stocks below $20 provide an opportunity for retail and small investors to accumulate stocks at reasonable prices. Retail investors play an important role in any stock market and have the power to move the markets. Retail participation in the stock markets picked up pace in recent years, catalyzed by the Covid-19 lockdowns, stimulus package, and easy access to online investing platforms. Short squeezes led by Reddit users brought fame to the retail investors as they edged out hedge funds betting against companies such as AMC and GameStop in early 2021.
Retail participation hit a new peak in early 2023 with total trading volume coming from retail investors exceeding 23%. These investors spent more than $1.5 billion a day, on average, during the first couple of months of 2023. After leading a remarkable recovery in the earlier part of the year, retail traders dumped significant amounts of stocks in the last few months, with more than $16 billion worth of stocks sold in October alone.
The sentiment has since shifted with positive developments concerning the interest rates and inflation rates, leading to four consecutive weeks of stock market rally. Retail investors in total $4.8 billion of equities during the past week which marks the highest weekly inflow since April 2022. The stock market rally follows recent positive figures. In its latest Capital Market Outlook report, BofA’s Irene L. Peters made the following comments about the macroeconomic environment:
“All in all, a contracting money supply is slowing hiring, softening wage growth, cooling inflation, and raising real interest rates, suggesting a quicker-than-expected return to a “two handle” on inflation, in our view. Elevated borrowing costs and growing debt-servicing struggles are restraining demand for credit, while stricter consumer lending standards are constraining the supply of credit, further suppressing inflation pressures. This suggests a strong disinflationary trend is underway, keeping additional Fed hikes at bay. It also points to potentially strong headwinds to business pricing power and profits ahead. The possibility that the Fed pendulum may have swung too far on the excessive tightening side may become apparent in 2024.”
You can read more about the recent stock market rally and investment opportunities related to stocks that are priced below $50 in our recently published article: 11 Stocks Under $50 To Buy Now.
A closeup of a finger resting on a stock chart as investors carefully examine the market.
Methodology
We used stock screeners to shortlist stocks that were trading at a share price of less than $20. To find quality stocks among the shortlisted stocks, we first narrowed down our selection by retaining only stocks that had buy or better recommendations, positive sales growth, and upside potential based on average price targets. We then corroborated the list with our database of stock ownership by leading hedge funds. The final step involved the ranking of the identified list of stocks based on their popularity among the 910 hedge funds tracked by Insider Monkey. The list of 11 stocks under $20 to buy now is ranked in the ascending order of the number of hedge funds that owned a stock.
11. KE Holdings Inc (NYSE:BEKE)
Share Price as of November 23: $16.15
Number of Hedge Fund Holders: 37
Beijing, China-based KE Holdings Inc (NYSE:BEKE) operates Beike, a leading integrated online and offline platform for housing transactions and services. It allows service providers and customers to efficiently navigate and complete housing transactions and services in China, ranging from existing and new home sales, home rentals, to home renovation and furnishing, and other services.
On November 8, KE Holdings Inc (NYSE:BEKE) released its financial results for Q3 2023. Its revenue increased by 1% y-o-y to $2.4 billion while net income increased by 63% y-o-y to $160 million. It managed to beat consensus estimates for normalized EPS by $0.13 with quarterly figures of $0.25.
KE Holdings Inc (NYSE:BEKE) established a share repurchase program in August 2022 which was later upsized in August 2023 and authorized the company to repurchase $2 billion of its shares. During September 2022 to September 2023, the company repurchased $737 million worth of its shares.
As of Q3 2023, KE Holdings Inc (NYSE:BEKE) shares were owned by 37 hedge funds with a total value of $1.3 billion according to the Insider Monkey database. Lei Zhang’s Hillhouse Capital Management was the largest hedge fund shareholder with ownership of 30.7 million shares valued at $476 million.
10. Array Technologies, Inc. (NASDAQ:ARRY)
Share Price as of November 23: $15.24
Number of Hedge Fund Holders: 40
Albuquerque, New Mexico-based Array Technologies, Inc. (NASDAQ:ARRY) is a leading provider of tracker solutions and services for utility-scale solar energy projects. Its high-quality solar trackers and sophisticated software maximize energy production, accelerating the adoption of cost-effective and sustainable energy.
Following a revenue miss and EPS outperformance in Q3 2023, Goldman Sachs analyst Brian Lee lowered the price target for Array Technologies, Inc. (NASDAQ:ARRY) shares to $31 from $36 and maintained a ‘Buy’ rating. The company generated $350 million revenue and $10 million net income during the quarter.
On November 2, Array Technologies, Inc. (NASDAQ:ARRY) announced plans for a new $50 million manufacturing campus in Bernalillo County, Albuquerque, spanning 216,000-square-foot. The state has awarded $2.5 million in economic assistance from the Local Economic Development Act job-creation fund.
9. Cleveland-Cliffs Inc. (NYSE:CLF)
Share Price as of November 23: $16.84
Number of Hedge Fund Holders: 41
Founded in 1847 as a mine operator, Cleveland-Cliffs Inc. (NYSE:CLF) is the largest flat-rolled steel producer and also the largest manufacturer of iron ore pellets in North America. The company is vertically integrated from mined raw materials, direct reduced iron, and ferrous scrap to primary steelmaking and downstream finishing, stamping, tooling, and tubing.
On August 13, Cleveland-Cliffs Inc. (NYSE:CLF) announced a proposal to acquire United States Steel Corporation (NYSE:X) in a cash and stock transaction that valued the target company at $7.4 billion. Prior to a public announcement, the company made the offer to the Board of Directors of United Steel in private which was rejected on grounds of being “unreasonable”. No definite agreement was reached but the process is reportedly ongoing.
Like other stocks such as Coupang, Inc. (NYSE:CPNG), Cenovus Energy Inc. (NYSE:CVE), and Warner Bros. Discovery, Inc. (NASDAQ:WBD), the shares of Cleveland-Cliffs Inc. (NYSE:CLF) are among the stocks under $20 to buy now.
8. Cenovus Energy Inc. (NYSE:CVE)
Share Price as of November 23: $17.69
Number of Hedge Fund Holders: 41
Cenovus Energy Inc. (NYSE:CVE) is an integrated oil and natural gas company based in Calgary, Alberta. Its operations include oil sands projects in Alberta, crude oil and natural gas projects across Western Canada, crude oil production offshore Newfoundland and Labrador and natural gas and liquids production offshore China and Indonesia, and downstream operations including upgrading, refining, and marketing operations in Canada and the United States.
Cenovus Energy Inc. (NYSE:CVE) has paid regular quarterly dividends since 2009. Its Board of Directors declared a dividend of C$0.14 per share. In Q3 2023, the company returned C$1.2 billion to shareholders composed of C$600 million for the partial payment of warrants obligation, C$361 million through share repurchases and C$264 million through common share base dividends.
As of Q3 2023, 41 of the 910 hedge funds tracked by Insider Monkey owned shares of Cenovus Energy Inc. (NYSE:CVE), valued at $1.7 billion. John Armitage’s Egerton Capital Limited was its largest shareholder with ownership of 22.4 million shares valued at $466 million.
7. ZoomInfo Technologies Inc. (NASDAQ:ZI)
Share Price as of November 23: $14.30
Number of Hedge Fund Holders: 44
ZoomInfo Technologies Inc. (NASDAQ:ZI) is a software and data company based in Vancouver, Washington. Its cloud-based platform provides accurate, real-time data, insights, and technology to over 35,000 companies worldwide.
On October 30, ZoomInfo Technologies Inc. (NASDAQ:ZI) released its financial results for Q3 2023. Its revenue increased by 9% y-o-y to $314 million, while net income increased by 69% y-o-y to $30 million. The company repurchased $160 million worth of shares during the quarter under its $600 million repurchase authorization.
As of Q3 2023, ZoomInfo Technologies Inc. (NASDAQ:ZI) shares were held by 44 hedge funds with the total shares held by them valued at $808 million. Mick Hellman’s HMI Capital was the largest hedge fund shareholder with ownership of 13.5 million shares valued at $221 million.
Like other stocks such as Coupang, Inc. (NYSE:CPNG), Cenovus Energy Inc. (NYSE:CVE), and Warner Bros. Discovery, Inc. (NASDAQ:WBD), the shares of ZoomInfo Technologies Inc. (NASDAQ:ZI) are among the stocks under $20 to buy now.
6. Southwestern Energy Company (NYSE:SWN)
Share Price as of November 23: $6.83
Number of Hedge Fund Holders: 44
Spring, Texas-based Southwestern Energy Company (NYSE:SWN) is a leading U.S. producer and marketer of natural gas and natural gas liquids focused on developing large-scale energy assets in the nation’s most prolific shale gas basins.
On November 2, Southwestern Energy Company (NYSE:SWN) released its quarterly results for Q3 2023. It generated total revenues of $1.4 billion and net income of $45 million. It reported a normalized EPS of $0.10 for the quarter, which exceeded the consensus estimates by $0.03.
As of Q3 2023, 44 hedge funds out of the 910 hedge funds tracked by Insider Monkey were bullish on Southwestern Energy Company (NYSE:SWN) and held shares valued at $932 million. D E Shaw held the highest number of shares among hedge funds with ownership of 28.7 million shares, valued at $185 million.
Click to continue reading and see 5 Stocks Under $20 To Buy Now.
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Disclosure: None. 11 Stocks Under $20 To Buy Now is originally published on Insider Monkey.
