In this piece, we will take a look at 12 cheap internet stocks to buy now. For more internet stocks, head on over to 5 Cheap Internet Stocks to Buy Now.
The world that we live in today is vastly different from the one just a couple of decades ago. Want a ride? Use your smartphone. Want to order food? Again, you’re smartphone is right there. Bored and want to watch Netflix? Guess what gadget will help you once again. However, the smartphone would not have half the functionality that it has today were it not for the Internet. The project, initially started by the U.S. military, is now a global reality and its impacts are so profound that even the United Nations has adopted a non binding resolution that believes internet access is a human right. This definition builds on the human right to free speech and access to resolution, but the resolution was opposed by some countries such as Russia, Saudi Arabia, India, and China.
At the same time, the Internet has also given us multi billion dollar companies that rely on it as a primary component of their business model. The biggest example of this is the rise of Amazon.com, Inc. (NASDAQ:AMZN), which is one of the world’s biggest electronic commerce retailers and whose latest market capitalization sits at a stunning $996 billion. Another mega company that owes its existence to everybody’s favorite communications and entertainment medium, is Meta Platforms, Inc. (NASDAQ:META). Finally, any mention of Internet companies is incomplete without Google, whose parent company Alphabet Inc. (NASDAQ:GOOG) is the largest on our brief set of examples through an absolutely massive market capitalization of $1.2 trillion.
But how big, or what really is the ‘internet industry’? This is a tough question that is bound to leave you scratching your head, because after all, if it weren’t for the Internet, Uber Technologies, Inc. (NYSE:UBER) wouldn’t exist either. So does this primary reliance on the Internet make Uber an internet company? Or is it simply a transportation services provider, and telecommunications firms such as Verizon Communications Inc. (NYSE:VZ) which actually do provide everyday users with Internet coverage are the true internet companies? We think it’s both of them, and it’s an important distinction to make as you’ll find you below.
The distinction is important because it lets us place a value on the true worth of firms in this elusive internet industry since it has several sub segments with massive valuations of their own. For instance, consider the video on demand industry that’s dominated by Netflix, Inc. (NASDAQ:NFLX). According to a research report from Fortune Business Insights, this industry was worth $69.5 billion in 2021 and is expected to grow through a compounded annual growth rate (CAGR) of 17.6% until 2029 to sit at an estimated $257 billion by the end of the forecast period. Another estimate, this time for the transportation as a service (TaaS) industry which consists primarily of firms like Uber, suggests that this sector presents an unbelievable market opportunity of $8 trillion courtesy of its different constituent divisions such as micro mobility. Yet, while the TaaS sector presents an $8 trillion opportunity, the global electronic commerce industry has already crossed the lucrative trillion dollar valuation, with one research report outlining that this industry was worth $2.6 trillion in 2021, will have grown to $3 trillion in 2022, and from then until 2026 will demonstrate a CAGR of 12% for a final value of $4.79 trillion.
Finally, even though it has shaken up human existence, the Internet still has more in store for us. This is courtesy of both 5G telecommunications (for 5G stocks, take a look at 13 Best 5G Stocks to Buy) and satellite coverage (for more on space, head on over to 11 Best Space Stocks to Invest In) – both of which have started to pick up the pace only recently and are projected to have a massive valuation. For instance, the global satellite internet market is estimated to grow at a stunning 20.4% CAGR between 2021 and 2030 and have a final value of $18.5 billion according to Allied Market Research, and according to estimates from the investment bank Morgan Stanley, the sector will represent at least 50% of the total growth in the global space economy by 2040. For reference, the bank believes that the space sector can cross $1 trillion by that time.
As for 5G, here’s what Verizon Communications Inc. (NYSE:VZ)’s chief executive officer Mr. Hans Vestberg had to say during the firm’s latest analyst call:
Our engineers have the best track record for designing and building networks that produce the best experience. Our network will continue to evolve with a relentless commitment to quality and reliability, adding capacity where needed and filling service gaps where they exist even as capital intensity declines in the coming years. In the shift to 5G, we have been rapidly building out our C-band spectrum with the most aggressive deployment plan in our company’s history. We are tracking to 200 million POPs this quarter and are well ahead of schedule to reach our 250 million POP targeted by year-end 2024. C-band propagation is very similar to that of AWS and PCS spectrum, which covers more than 300 million POPs today. This gives us a clear path to scale C-band quickly and efficiently, including in the 330 markets where we expect to gain complete access to the C-band spectrum later this year.
With these details in mind, it’s time to take a look at some cheap internet stocks, with the top picks being VEON Ltd. (NASDAQ:VEON), Magyar Telekom Távközlési Nyilvánosan Müködö Részvénytársaság (OTCMKTS:MYTAY), and KT Corporation (NYSE:KT).
Pixabay/Public Domain
Our Methodology
To pick out cheap internet stocks, we cast a wide net for our piece. This included sifting out software companies, telecommunications companies, information technology firms, and others, and then analyzing their business model to gauge their relevance to the Internet. Then, the final picks were ranked according to their price to earnings ratio, and the firms with the lowest ratio are listed here.
12 Cheap Internet Stocks to Buy Now
12. Telekom Austria AG (OTCMKTS:TKAGY)
Latest P/E Ratio: 8.41
Telekom Austria AG (OTCMKTS:TKAGY) is an Austrian company that is based in Vienna, Austria. It is a diversified internet company with operations in Serbia, Croatia, Slovenia, and other countries. Telekom Austria AG (OTCMKTS:TKAGY)’s products and services include fixed line internet, internet protocol television coverage, mobile commerce, connected smart home devices, and a mobile payment platform.
Along with Magyar Telekom Távközlési Nyilvánosan Müködö Részvénytársaság (OTCMKTS:MYTAY), VEON Ltd. (NASDAQ:VEON), and KT Corporation (NYSE:KT), Telekom Austria AG (OTCMKTS:TKAGY) is a cheap internet stock.
11. Yalla Group Limited (NYSE:YALA)
Latest P/E Ratio: 8.23
Yalla Group Limited (NYSE:YALA) is a social networking company that is based in Dubai, the United Arab Emirates. Its social network platform enables users to play video games, buy and sell virtual items, and chat with each other. As of December 2022, Yalla Group Limited (NYSE:YALA) had 32 million average users and 12.4 million paying users on its platform.
By the end of 2022’s December quarter, four of the 943 hedge funds surveyed by Insider Monkey had bought Yalla Group Limited (NYSE:YALA)’s shares. The firm’s largest investor is Jim Simons’ Renaissance Technologies which owns 611,000 shares that are worth $2 million.
10. APT Satellite Holdings Limited (OTCMKTS:ASEJF)
Latest P/E Ratio: 8.03
APT Satellite Holdings Limited (OTCMKTS:ASEJF) is a Hong Kong based company headquartered in Tai Po, Hong Kong. The firm provides internet protocol management services to other companies via its constellation of satellites. APT Satellite Holdings Limited (OTCMKTS:ASEJF)’s full year results saw the firm grow its revenue by 1.8% annually but struggle with inflation as its profit margin dropped to 25% and net income go down by 12% annually.
9. Verizon Communications Inc. (NYSE:VZ)
Latest P/E Ratio: 7.51
Verizon Communications Inc. (NYSE:VZ) is an American firm that provides fixed and wireless broadband and mobile internet to consumers. Additionally, it also provides networking, IoT, and data broadband services to businesses. The firm is based in New York, New York.
Insider Monkey’s 943 hedge fund study for last year’s fourth quarter found that 56 had held a stake in Verizon Communications Inc. (NYSE:VZ). The firm’s largest investor is Ric Dillon’s Diamond Hill Capital which owns 6.7 million shares that are worth $266 million.
8. Altice USA, Inc. (NYSE:ATUS)
Latest P/E Ratio: 7.44
Altice USA, Inc. (NYSE:ATUS) is an American company headquartered in Long Island City, New York. It enables customers to build virtual private networks based on internet protocol, companies to run advertising campaigns based on IP addresses and run network security services, and also provides VoIP telephony and broadband internet services.
As of Q4 2022, 27 of the 943 hedge funds part of Insider Monkey’s database had bought Altice USA, Inc. (NYSE:ATUS)’s shares. The firm’s largest hedge fund investor is Jonathan Kolatch’s Redwood Capital Management which owns 15 million shares that are worth $70 million.
7. Adeia Inc. (NASDAQ:ADEA)
Latest P/E Ratio: 6.49
Adeia Inc. (NASDAQ:ADEA) is an American firm headquartered in San Jose, California. It enables television companies to distribute their programming over the Internet, aids multichannel video data distribution service (MVDDS) providers to run their business, and firms that rely on internet advertising to generate streaming revenue to make money.
As of Q4 2022, 17 of the 943 hedge funds polled by Insider Monkey had bought Adeia Inc. (NASDAQ:ADEA)’s shares.
6. Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC)
Latest P/E Ratio: 6.26
Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC) is a Turkish company that is headquartered in Istanbul, Turkey. The firm has a global presence with operations in Germany, the Netherlands, and other countries. It has a digital music service, a mobile browser, fixed and mobile internet products, and a digital business service portfolio made of cybersecurity and Internet of Things (IoT) services.
By the end of last year’s fourth quarter, five of the 943 hedge funds part of Insider Monkey’s database had bought Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC)’s shares. Out of these, the company’s largest investor is Richard Oldfield’s Oldfield Partners which owns 1.7 million shares that are worth $8.4 million.
VEON Ltd. (NASDAQ:VEON), Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC), Magyar Telekom Távközlési Nyilvánosan Müködö Részvénytársaság (OTCMKTS:MYTAY), and KT Corporation (NYSE:KT). are some cheap internet stocks.
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Disclosure: None. 12 Cheap Internet Stocks to Buy Now is originally published on Insider Monkey.