12 Best Bargain Stocks To Buy in March

In this article, we discuss 12 best bargain stocks to buy in March.

Warren Buffett, the successful investor and founder of Berkshire Hathaway, recently stated that he and vice chairman Charlie Munger focus on selecting businesses rather than individual stocks. In the company’s recent shareholder letter, Buffett revealed that their investment strategy involves investing in businesses that have trustworthy managers and sustainable positive economic traits. This technique, referred to as value investing, emphasizes holding onto high-performing stocks for the long term, as opposed to actively trading based on short-term price changes.

Einhorn’s View of the Stock Market

David Einhorn, who manages Greenlight Capital, stated on March 1 that he continues to hold a bearish view on the stock market due to the possibility of rising inflation and interest rates. According to the prominent hedge fund manager, the Federal Reserve might need to take additional measures to address persistent inflation, which could result in interest rates increasing beyond what is currently expected by the majority. The central bank has already raised interest rates to a range of 4.5% to 4.75%, marking the highest level since October 2007.

Einhorn had an extremely successful year in 2022, with a return of 36.6%, which he attributed in part to his short positions in various innovative technology stocks, similar to those favored by growth investor Cathie Wood. In a recent letter to investors, he noted that 2022 was one of his best years and compared the current market conditions to the aftermath of the tech bubble in 2001. He also disclosed that he still holds short positions in certain “bubble” stocks. Although his hedge fund is currently only slightly long, he has great confidence in the value stocks in his portfolio.

Undervalued Stocks

The DEEP ETF from Roundhill is intended to enable both retail and institutional investors to invest in stocks that are significantly undervalued, with the aim of closely tracking the performance of the DEEP Index, after fees and expenses. The DEEP Index utilizes the Acquirers Multiple to identify small and micro-cap stocks that are deeply undervalued. This measure is frequently employed by activists and buyout firms to pinpoint potential targets. While prominent value stocks include Citigroup Inc. (NYSE:C), Exxon Mobil Corporation (NYSE:XOM), and JPMorgan Chase & Co. (NYSE:JPM), we discuss the best bargain stocks from the DEEP ETF in this article. The exchange traded fund has gained nearly 14.5% year-to-date as of March 6, and it has outperformed the market over the last 52-weeks as well. 

Our Methodology 

For the best bargain stocks to buy in March, we started with the holdings of Deep Value ETF (DEEP) and ranked them by hedge fund sentiment. We have assessed the hedge fund sentiment from Insider Monkey’s database of 943 elite hedge funds tracked as of the end of the fourth quarter of 2022. The list is arranged in ascending order of the number of hedge fund holders in each firm. 

Best Bargain Stocks To Buy in March

12. BlueLinx Holdings Inc. (NYSE:BXC)

Number of Hedge Fund Holders: 19

BlueLinx Holdings Inc. (NYSE:BXC) was incorporated in 2004 and is headquartered in Marietta, Georgia. The company distributes residential and commercial building products in the United States. BlueLinx Holdings Inc. distributes specialty products consisting of engineered wood, siding, millwork, specialty lumber, and panels. On February 21, the company reported a Q4 non-GAAP EPS of $3.97, beating market estimates by $0.26. The revenue of $847.77 million however missed Wall Street consensus by $91.8 million. 

On February 28, BlueLinx Holdings Inc. and Louisiana-Pacific Corporation (NYSE:LPX) announced the expansion of its distribution partnership. The expansion includes Louisiana-Pacific Corporation’s Siding Solutions brands and prefinished solutions in the Southeast and Midwest Regions, specifically in Atlanta, Omaha, and Pensacola. The expanded distribution will commence later in the first quarter of 2023.

According to Insider Monkey’s fourth quarter database, 19 hedge funds were bullish on BlueLinx Holdings Inc., compared to 20 funds in the prior quarter. Travis Cocke’s Voss Capital is the largest stakeholder of the company, with 599,723 shares worth $42.6 million. 

Like Citigroup Inc., Exxon Mobil Corporation, and JPMorgan Chase & Co., BlueLinx Holdings Inc. is one of the top value stocks to invest in. 

Voss Capital made the following comment about BlueLinx Holdings Inc. in its Q3 2022 investor letter:

“Coming into 2022, consensus EPS estimates for building products distributor BlueLinx Holdings Inc. were $10.70. Now, despite lumber prices being down ~65% YTD and new home starts down y/y, with three quarters reported as of the Q3 earnings release, it is looking like they will earn over $31 in EPS – yet the stock is down 30% this year (the stock went from >8x forward earnings to 2.1x trailing).

The average US homeowner gained $60k in home equity in the last 12 months and home equity remains the most predictive indicator for Repair & Remodeling spending (~45% of BXC’s revenues are tied to R&R).19 The median age of owner-occupied homes is at a record high of 41 years. On top of that, we are just now lapping the critical 20-year anniversary of homes built during the 2002-2006 boom, an age in a home’s life where remodeling spend takes a significant step higher. This remains an underappreciated R&R driver and we believe it is showing up in the numbers…” (Click here to read the full text)

11. Tutor Perini Corporation (NYSE:TPC)

Number of Hedge Fund Holders: 19

Tutor Perini Corporation (NYSE:TPC) is a California-based construction company that specializes in diversified general contracting, construction management, and design services to private customers and public companies worldwide. It is one of the best cheap stocks to invest in. 

On November 3, B. Riley analyst Alex Rygiel raised the firm’s price target on Tutor Perini Corporation to $10 from $9 and maintained a Buy rating on the shares following the Q3 results, citing improved cash flow.

According to Insider Monkey’s Q4 data, Tutor Perini Corporation was part of 19 hedge fund portfolios, compared to 18 in the prior quarter. Cliff Asness’ AQR Capital Management is the largest position holder in the company, with 1 million shares worth over $8 million. 

Miller Value Partners made the following comment about Tutor Perini Corporation in its Q3 2022 investor letter:

“During the quarter we also scaled up a new investment in Tutor Perini Corporation. The company’s Civil segment is a leading provider of complex construction and rehabilitation of critical infrastructure (highways, tunnels, bridges, mass transit). Tutor has been in business for over 125 years and appears well positioned to benefit over the next couple of years from the recently passed $1.2T federal infrastructure law.

Their integrated business model provides competitive advantage in bidding, providing greater transparency in price and greater control of the large project work schedule. TPC’s stock price has been more than cut in half over the past year (near early 2020 lows) as the Covid outbreak caused a delay in larger Civil contracts. This is now weighing significantly on segment margins, creating an earnings trough this year. Tutor’s recent new business wins are helping to rebuild their pipeline (Civil segment backlog approaching $5B which is 200% higher than segment current annual revenue run-rate).

In addition, the company has been working through the legal system to litigate for past due work. While Covid delayed some legal proceedings, these outstanding cases are now being settled, having recently added more than $100M to cash flow. With $500 to $700M of outstanding receivables, ongoing settlements provide a nice margin of safety to the balance sheet. This has the potential to generate significant incremental free cash flow.…” (Click here to read the full text)

10. AMC Networks Inc. (NASDAQ:AMCX)

Number of Hedge Fund Holders: 20

AMC Networks Inc. (NASDAQ:AMCX) is a New York-based entertainment company that owns and operates a suite of video entertainment products. On February 17, the company reported Q4 non-GAAP earnings per share of $2.52 and a revenue of $964.52 million, outperforming Wall Street estimates by $1.25 and $27.45 million, respectively. Revenue over the period increased 20% on a year-over-year basis. 

On February 21, Thomas Yeh, an analyst at Morgan Stanley, increased the target price for AMC Networks Inc. from $19 to $24 and maintained an Equal Weight rating on the shares. The analyst informed investors that AMC Networks Inc.’s decision to reset cash content spending to around $1-1.1 billion run-rate in FY23 and beyond will improve the firm’s free cash flow projections. However, there is a risk that reduced investments in content could worsen revenue challenges, the analyst told investors. 

According to Insider Monkey’s data, 20 hedge funds were bullish on AMC Networks Inc. at the end of December 2022, compared to 16 funds in the prior quarter. Mario Gabelli’s GAMCO Investors is a significant position holder in the company, with 479,676 shares worth $7.5 million. 

Here is what ClearBridge Investments has to say about AMC Networks Inc. in its Q1 2021 investor letter:

“Media has been another bright spot for the Strategy, boosted by the return of live events and subsequent rebound in advertising as well as good initial traction for several of our companies new streaming services. AMC Networks has seen strong initial subscriber growth to their over-the-top services.”

9. Masonite International Corporation (NYSE:DOOR)

Number of Hedge Fund Holders: 20

Masonite International Corporation (NYSE:DOOR) was founded in 1925 and is headquartered in Tampa, Florida. The company designs, manufactures, markets, and commercializes interior and exterior doors for the residential and non-residential building construction markets worldwide. Masonite International Corporation’s Q4 non-GAAP EPS of $1.72 missed market estimates by $0.15. The revenue climbed 6.3% year-over-year to $676 million, topping Wall Street consensus by $34.99 million. 

On February 24, Baird raised the firm’s price target on Masonite International Corporation to $110 from $108 and kept an Outperform rating on the shares. The analyst noted that the Q4 results were a combination of positives and negatives. The company is factoring in a significant decline in volume in its forecast, but it is expected that margins will remain stable year-over-year due to cost savings, a slight decrease in material costs, and the realization of synergies, the analyst wrote in a research note.

According to Insider Monkey’s fourth quarter database, 20 hedge funds were long Masonite International Corporation, compared to 19 funds in the prior quarter. Kevin Oram and Peter Uddo’s Praesidium Investment Management Company is the largest stakeholder of the company, with 1.3 million shares worth $107 million. 

8. Ryerson Holding Corporation (NYSE:RYI)

Number of Hedge Fund Holders: 20

Ryerson Holding Corporation (NYSE:RYI) is a Chicago-based company that processes and distributes industrial metals in the United States and internationally. On February 22, Ryerson Holding Corporation’s revenue of $1.29 billion exceeded market estimates by $70 million. The company also announced a first quarter 2023 dividend of $0.17 per share, a 6.3% increase from the prior quarter. It is one of the best cheap stocks to invest in.

On February 24, BMO Capital analyst Katja Jancic raised the firm’s price target on Ryerson Holding Corporation to $45 from $36 and reiterated an Outperform rating on the shares after its Q4 results. According to the analyst, Ryerson Holding Corporation has made structural improvements to its financial and operational performance, which puts it in a better position to generate higher free cash flows in the long term. This increased cash flow will allow the company to continue investing in growth and returning cash to shareholders, as per the analyst. 

According to Insider Monkey’s fourth quarter database, Ryerson Holding Corporation was part of 20 hedge fund portfolios, compared to 17 funds in the prior quarter. D E Shaw is the biggest stakeholder of the company, with 340,038 shares worth $10.2 million. 

7. American Axle & Manufacturing Holdings, Inc. (NYSE:AXL)

Number of Hedge Fund Holders: 21

American Axle & Manufacturing Holdings, Inc. was founded in 1994 and is headquartered in Detroit, Michigan. The company designs, engineers, and manufactures driveline and metal forming technologies that support electric, hybrid, and internal combustion vehicles. In FY 2023, American Axle & Manufacturing Holdings, Inc. is targeting sales in the range of $5.95 billion to $6.25 billion, versus a $5.98 billion consensus and adjusted EBITDA in the range of $725 million to $800 million.

On February 22, Dan Levy, an analyst at Barclays, reduced the target price for American Axle & Manufacturing Holdings, Inc. from $10 to $9 and maintained an Equal Weight rating on the shares. The analyst informed investors that the company is still facing margin difficulties, particularly in metal forming.

According to Insider Monkey’s fourth quarter database, 21 hedge funds were bullish on American Axle & Manufacturing Holdings, Inc., compared to 17 funds in the last quarter. Jerome L. Simon’s Lonestar Capital Management is a significant position holder in the company, with 671,000 shares worth $5.2 million. 

Here is what Miller Value Partners Deep Value Strategy has to say about American Axle & Manufacturing Holdings, Inc. in its Q1 2022 investor letter:

“American Axle is a tier 1 vertically integrated supplier focused on automotive propulsion systems to support internal combustion engines, hybrid, and electric vehicles. The share price has significantly underperformed over the past couple of years, down more than 70% below its 2015 highs. The company is well positioned for a recovery in North America auto market (nearly 80% of revenues) and should benefit from ongoing consumer demand in the large truck marketplace (half of its revenue). Similar to Tenneco, American Axle has less exposure to EVs versus its peers. However, the company has been increasing new scalable electrification propulsion technologies. The marketplace appears to be providing limited value to American Axle’s innovation as well as recent new wins which secure more than $10B in revenue from 2025 to 2030. The company’s vertical integration while helping the company operate in the current challenging environment also provides nice contribution margins (more than 25%) as industry volumes improve. Management expects to generate significant free cash flow over the next couple of years. AXL’s share price looks significantly mispriced at less than 2x cash flow and approximately 50% normalized free cash flow yield. Upside potential could be multiples of AXL’s current share price as the company continues focus on de-levering their balance sheet towards 2x net debt leverage target.”

6. Anywhere Real Estate Inc. (NYSE:HOUS)

Number of Hedge Fund Holders: 21

Anywhere Real Estate Inc. (NYSE:HOUS) is a New Jersey-based provider of residential real estate services in the United States and internationally. The company operates through three segments – Anywhere Brands, Anywhere Advisors, and Anywhere Integrated Services. Although Q4 results failed to meet Wall Street consensus, the company expects to realize further cost savings of approximately $200 million in 2023. 

On February 27, Keefe Bruyette downgraded Anywhere Real Estate Inc. from Outperform to Market Perform and lowered its price target from $12 to $7. According to the analyst, the pendulum has swung too far in favor of agents over brokers. This means that even in a heavily declining market, the higher contribution of top-performing agents will place more strain on Anywhere Real Estate Inc.’s commission splits. 

According to Insider Monkey’s Q4 data, 21 hedge funds were bullish on Anywhere Real Estate Inc., and Angelo Gordon & Co held the leading position in the company, comprising 9.4 million shares worth $60.5 million. 

In addition to Citigroup Inc., Exxon Mobil Corporation, and JPMorgan Chase & Co., Anywhere Real Estate Inc. is one of the bargain stocks on the radar of smart investors. 

Longleaf Partners Small-Cap Fund made the following comment about Anywhere Real Estate Inc. in its Q4 2022 investor letter:

“Anywhere Real Estate Inc. – Real Estate brokerage franchisor Anywhere declined this year in the face of broad concerns over the housing market and rising mortgage rates. We were wrong about the severity of the housing market downturn, further compounded at Anywhere by leverage. CEO Ryan Schneider has taken steps within his power to position the company to weather a tough environment. The company now trades at a single-digit multiple of 2023 extremely depressed FCF/share based on 4 million existing home sales and about 2.5x our estimate of long-term FCF/share based on a long-term average number of existing home sales of around 5.5 million units. Anywhere successfully navigated a much more challenging market during the GFC with even higher leverage, so we are confident the company will make it to the other side once again.”

5. CarGurus, Inc. (NASDAQ:CARG)

Number of Hedge Fund Holders: 21

CarGurus, Inc. (NASDAQ:CARG) is a Massachusetts-based operator of an online automotive marketplace connecting buyers and sellers of new and used cars in the United States and internationally. On February 28, CarGurus, Inc. reported a Q4 non-GAAP EPS of $0.22 and a revenue of $286.7 million, outperforming Wall Street estimates by $0.11 and $5.29 million, respectively. CarGurus, Inc. is one of the best cheap stocks to invest in. 

On March 1, Raymond James increased the target price for CarGurus, Inc. from $16 to $20 and maintained an Outperform rating on the stock. CarGurus, Inc. has reported revenue and EBITDA that met expectations, with consistent growth in its Marketplace, but a weaker performance in its Wholesale division. The company has acknowledged ongoing challenges in its Wholesale segment and has stated that it will work to improve profitability by adjusting its operations, the analyst wrote in a research note. 

According to Insider Monkey’s fourth quarter database, 21 hedge funds were bullish on CarGurus, Inc., compared to 23 funds in the prior quarter. PAR Capital Management is the largest stakeholder of the company, with 6.7 million shares worth $94.5 million. 

Cove Street Capital made the following comment about CarGurus, Inc. in its Q3 2022 investor letter:

“During the quarter, we started a new position in CarGurus, Inc.. The company historically has been a lead generation business, helping car dealers find consumers who are looking to buy or sell a car online. CARG has been successful at this by having world-class search engine optimization (SEO) and search engine marketing (SEM) that helps them achieve top search results on Google. Consumers click these top links on Google when buying or selling a car and enter their information on the CARG website, generating a lead for CARG. CARG sells these high-quality leads to dealers for a significant profit (gross margin of 90%+). The lead generation business has hit maturity as CARG has almost penetrated the entire car dealer market in the US. CARG recently bought an Online Dealer to Dealer (D2D) platform, CarOffer, which helps car dealers sell cars to other dealers as well as buy cars from consumers online. There is a large amount of selling synergies between the Online D2D platform and the legacy lead generation business as they are selling to the same customer base: car dealers. CarOffer has been experiencing huge growth as it gains significant market share from physical dealer auctions. We have initiated a position in CARG after the market over punished the stock due to a tough macro environment. Despite the current macro concerns, we feel CARG is still a high margin, high free cash flow generating business with significant room to grow the CarOffer business.”

4. Titan Machinery Inc. (NASDAQ:TITN)

Number of Hedge Fund Holders: 22

Titan Machinery Inc. (NASDAQ:TITN) owns and operates a network of full-service agricultural and construction equipment stores in the United States and Europe. It operates through three segments – Agriculture, Construction, and International. Titan Machinery Inc. is one of the best cheap stocks to invest in. 

On December 13, B. Riley analyst Alex Rygiel initiated coverage of Titan Machinery Inc. with a Buy rating and a $48 price target. The analyst believes that a large percentage of the company’s revenue, ranging from 85% to 90%, comes from sales of agricultural and construction equipment to farmers and ranchers, making it a reliable investment during uncertain economic times. Despite challenges faced by the company’s operations in Ukraine, which the analyst suggested have negatively impacted the company’s valuation, Titan Machinery Inc. has recently shown strong financial performance.

According to Insider Monkey’s Q4 data, 22 hedge funds were bullish on Titan Machinery Inc., compared to 18 funds in the prior quarter. Ken Griffin’s Citadel Investment Group is the largest stakeholder of the company, with 172,106 shares worth $6.8 million.

3. Sally Beauty Holdings, Inc. (NYSE:SBH)

Number of Hedge Fund Holders: 23

Sally Beauty Holdings, Inc. (NYSE:SBH) is a Texas-based company that operates as a specialty retailer and distributor of professional beauty supplies. On February 2, Sally Beauty Holdings, Inc. reported a FQ1 non-GAAP EPS of $0.52 and a revenue of $957.06 million, outperforming Wall Street estimates by $0.04 and $35.32 million, respectively. It is one of the best cheap stocks to monitor. 

On February 16, Cowen analyst Oliver Chen raised the firm’s price target on Sally Beauty Holdings, Inc. to $19 from $14 and kept a Market Perform rating on the shares. This comes after the company’s FQ1 results, which were “better than feared.” Despite this positive news, the firm remains cautious about the near-term outlook due to the ongoing price sensitivity of consumers in the current economic climate, the analyst wrote in a research note. 

According to Insider Monkey’s fourth quarter database, 23 hedge funds were bullish on Sally Beauty Holdings, Inc., compared to 20 funds in the prior quarter. Bernard Horn’s Polaris Capital Management is the largest stakeholder of the company, with 2.5 million shares worth $32.2 million. 

2. Hibbett, Inc. (NASDAQ:HIBB)

Number of Hedge Fund Holders: 25

Hibbett, Inc. (NASDAQ:HIBB) was founded in 1945 and is headquartered in Birmingham, Alabama. The company offers athletic footwear, athletic and fashion apparel, sports equipment, and related accessories. Hibbett, Inc.’s Q4 comparable sales increased 15.5% compared to the prior-year quarter, and climbed 39.6% versus the same period pre-pandemic. It is one of the best cheap stocks to invest in. 

On November 29, Justin Kleber, an analyst at Baird, increased the target price of Hibbett, Inc. from $70 to $75 and maintained an Outperform rating on the shares. Despite Hibbett, Inc.’s Q4 results falling below Wall Street’s expectations, the analyst commented that the sales of footwear were strong, and the pressure on apparel clearance is expected to ease in the next quarter. Additionally, Kleber believes that the recent decline in the company’s stock price is unwarranted and sees a positive risk/reward ratio.

According to Insider Monkey’s Q4 data, 25 hedge funds were bullish on Hibbett, Inc., compared to 21 funds in the prior quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP is the largest stakeholder of the company, with 320,580 shares worth $21.8 million. 

Here is what Roubaix Capital has to say about Hibbett, Inc. in their Q4 2020 investor letter:

“The second best short in the quarter was Hibbett Sports (HIBB), a sporting goods retailer. Many businesses were able to benefit from the spending shifts caused by the pandemic. For example, online retailers, companies that sell into the home improvement markets and grocery stores all saw varying degrees of improvement. We did not see HIBB as a clear beneficiary as they have historically underinvested in their online business. However, they managed to post very strong results during their third quarter from leisure spending trends and the stock reacted favorably. We shorted the strength of this rally and continue to hold our position as we do not see HIBB as a longer-term winner in its markets.”

1. Herbalife Nutrition Ltd. (NYSE:HLF)

Number of Hedge Fund Holders: 33

Herbalife Nutrition Ltd. (NYSE:HLF) is a California-based company that offers health and wellness products in North America, Mexico, South and Central America, Europe, the Middle East, Africa, China, and the rest of Asia Pacific. On February 14, Herbalife Nutrition Ltd. reported a Q4 non-GAAP EPS of $0.53 and a revenue of $1.2 billion, outperforming Wall Street estimates by $0.19 and $70 million, respectively.

On February 3, Bank of America analyst Anna Lizzul began coverage of Herbalife Nutrition Ltd. with an Underperform rating and a price target of $14. The MLM business model of the company poses the biggest threat to its operations, according to BofA. They argue that it is harder to track the sales of direct sellers in the MLM model than it is for retail-based businesses. Furthermore, Herbalife Nutrition Ltd.’s exposure to emerging markets is another area of concern, as per the firm.

According to Insider Monkey’s fourth quarter database, 33 hedge funds were bullish on Herbalife Nutrition Ltd., compared to 24 funds in the prior quarter. William Duhamel’s Route One Investment Company is the biggest position holder in the company, with 10.8 million shares worth $161.3 million. 

Here is what Bronte Capital has to say about Herbalife Nutrition Ltd. in its Q3 2021 investor letter:

“Herbalife is – as we have discussed many times before – a multi-level marketing scheme selling weight-loss shakes. The idea is simple. If I replaced six meals a week with low-calorie protein shakes and I walked an extra 15 km a week I would quickly lose 15-20kgs. It would be good for me. It is also well-nigh impossible to do.

One solution is to hire a personal trainer (usually of the opposite sex) and have them nag you. You will do tough stuff for an attractive member of the opposite sex. More realistically you could just have your friends nag you. And that is why this works so well as a multi-level marketing scheme. The person who sells you the shakes has an incentive to keep you on the diet.

We have looked at many distributors and we see a weight-loss program – implemented for (literally) millions of people – which works about as well as any weight-loss health program that ever existed. That still means it fails most of the time – but it works enough that we can be proud of owning this stock and the health benefits it provides. Herbalife, it turns out, grew well during COVID. This was initially a surprise to us – as we thought Herbalife depended on the personal touch to make the sale. But, instead, weight loss and associated social clubs moved online – and – in many cases were the main social outlet the customers had.”

Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily enewsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also check out 12 Most Profitable Mid-Cap Stocks Now and 16 High Growth Non-Tech Stocks That Are Profitable. 

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This article is originally published at Insider Monkey.