In this article, we discuss the 15 best affordable stocks to buy now. If you want to skip our analysis of these stocks, go directly to the 5 Best Affordable Stocks To Buy Now.
The US equity market has been wading through some rocky terrain since the beginning of 2022. Global economic activity is experiencing a broad-based and sharper-than-expected slowdown, with inflation higher than seen in several decades. When it comes to the three major indexes, the S&P 500 has declined by 19.68%, the Dow Jones Industrial Average has retreated by 10.02%, while the Nasdaq index has fallen 32.38% in 2022 as of December 17. Several negative developments like the Russia-Ukraine conflict, the COVID-19-related lockdowns in China, and the rising inflation in the US weigh heavily on the outlook, and according to World Economic Outlook by the IMF, global economic growth is set to slow down from 3.2% to 2.7% in 2023.
In such an environment, it makes sense that investors would look towards stocks lucrative, profitable, and affordable stocks to make the most of the grim macroeconomic headwinds. While the market has declined this year, some affordable stocks have outperformed the broader market for various reasons. While such stocks do not offer the security offered by mega-cap firms like Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Apple Inc. (NASDAQ:AAPL), they provide an opportunity for some decent short-term returns on account of their volatility. In that regard, some of the best affordable stocks include Hewlett Packard Enterprise Company (NYSE:HPE), Ford Motor Company (NYSE:F), and Bank of America Corporation (NYSE:BAC), among others listed below.
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Our Methodology
For our list, we picked 15 of the best stocks that had a share price of $50 or under as of December 17. Each stock on this list has earnings growth potential alongside solid business fundamentals. We ranked these stocks based on the number of hedge funds in our database that held shares in them at the end of the third quarter.
Best Affordable Stocks To Buy Now
15. MarineMax, Inc. (NYSE:HZO)
Share Price as of December 17: $31.41
Number of Hedge Fund Holders: 16
MarineMax, Inc. (NYSE:HZO) operates as a recreational boat and yacht retailer and superyacht services company in the United States that operates through two segments, Retail Operations and Product Manufacturing.
On December 14, Stifel analyst Drew Crum initiated coverage of MarineMax, Inc. (NYSE:HZO) with a Buy rating and $40 price target. According to the analyst, the MarineMax’s business is better equipped to endure a recession relative to 15 years ago and has “a positive bias” on the longer-term outlook for the U.S. boating industry.
For the fiscal fourth quarter of 2022, MarineMax, Inc. (NYSE:HZO) announced that its quarterly revenues came in at $536.76 million, up 16.10% on a year-over-year basis, and outperformed the market by more than $17.76 million. The company also reported an EPS of $1.90, beating expert estimates by $0.65.
As of Q3 2022, 16 hedge funds in the database of Insider Monkey held stakes worth $45.6 million in MarineMax, Inc. (NYSE:HZO), down from 17 in previous quarter worth $52.7 million. Of these, Arrowstreet Capital reported holding 482,544 shares worth roughly $28.49 million in MarineMax, Inc. (NYSE:HZO).
Similar to Hewlett Packard Enterprise Company (NYSE:HPE), Ford Motor Company (NYSE:F), and Bank of America Corporation (NYSE:BAC), MarineMax, Inc. (NYSE:HZO) is a decently affordable stock.
14. Schneider National, Inc. (NYSE:SNDR)
Share Price as of December 17: $24.30
Number of Hedge Fund Holders: 16
Schneider National, Inc. (NYSE:SNDR) is a provider of truckload, intermodal and logistics services. Some of the company’s services include regional, long-haul, expedited, dedicated, bulk, intermodal, brokerage, cross-dock logistics, pool point distribution, supply chain management, and port logistics.
Earlier this October, Stifel analyst Bert Subin lowered the price target on Schneider National, Inc. (NYSE:SNDR) to $29 from $31 and maintained a Buy rating on the shares after having met with management and coming away “more bullish” on the future prospects for digital brokerage and specialized truckload. According to Subin, logistics would be the main upside driver for Schneider over the medium-term, stating that the company has an “underappreciated earnings power growth.”
As of September 30, AQR Capital Management is the top investor in Schneider National, Inc. (NYSE:SNDR) and has disclosed a stake of $56.45 million in the company. Overall, 16 out of the 920 hedge funds tracked by Insider Monkey reported owning shares of the company at the end of Q3.
13. Griffon Corporation (NYSE:GFF)
Share Price as of December 17: $34.95
Number of Hedge Fund Holders: 26
Griffon Corporation (NYSE:GFF) is a multinational conglomerate company that oversees the operations of its subsidiaries, allocates resources among them and manages their capital structures. It conducts its operations through five subsidiaries: The AMES Companies, ClosetMaid, Clopay Building Products, CornellCookson, and Telephonics Corporation.
Earlier this September, Raymond James added Griffon Corporation (NYSE:GFF) to the firm’s “Analyst Current Favorites” list, which contains the current favorite stock ideas from the analysts in Raymond James equity research.
At the end of Q3 2022, 26 hedge funds disclosed ownership of stakes in Griffon Corporation (NYSE GFF). The total value of these stakes amounted to $221.9 million, up from $218.75 million in the previous quarter with 21 positions. The hedge fund sentiment for the stock is positive. As of September 30, GAMCO Investors is the largest shareholder in Griffon Corporation (NYSE:GFF) and has stakes worth $87.68 million in the company.
Voss Capital made the following comment about Griffon Corporation (NYSE:GFF) in its Q3 2022 investor letter:
“Griffon Corporation (NYSE:GFF) remains an outsized long position at ~20% of the Fund.
Their consumer and professional products (tools) segment, CPP, continues to disappoint this year as retailers became over inventoried, there was generally poor weather for the peak gardening season, and input cost went through the roof. We assume only a ~$950M valuation for CPP in a sale – a 50% discount to the cumulative combined values paid for the various businesses since 2010.
More importantly, GFF’s more valuable garage door segment continues to surprise to the upside in a major way. It is still growing 47% and 2022’s full year EBITDA came in >100% higher than expectations at the start of the year. There has been no demand collapse. And contrary to intense skepticism and pushback that we heard all year long, at 31%, HBP’s EBITDA margins continue to tick higher—and that is before the benefits of lower steel prices are felt. With their initial guidance for 2023 for a “modest EBITDA decline” implying recent HBP EBITDA gains are relatively sustainable, we believe potential acquirers’ fears should be assuaged, thus significantly raising the probability of a favorable valuation in a buyout…” (Click here to read the full text)
12. Vale S.A. (NYSE:VALE)
Share Price as of December 17: $16.07
Number of Hedge Fund Holders: 27
Vale S.A. (NYSE:VALE), formerly known as Companhia Vale do Rio Doce, is a Brazilian multinational corporation engaged in metals and mining and one of the largest logistics operators in Brazil. The company is known as the largest producer of iron ore and nickel in the world.
On December 8, BMO Capital analyst David Gagliano raised his price target on Vale S.A (NYSE:VALE) to $20 from $16 and maintained an Outperform rating on the shares. The analyst said the company’s improved 2023-2024 operating visibility reduces risks and uncertainty for the stock.
According to Insider Monkey’s data, 27 hedge funds were long Vale S.A. (NYSE:VALE) at the end of the third quarter of 2022, and Rajiv Jain’s GQG Partners held the largest stake in the company, comprising 21.40 million shares worth $285 million.
Here is what GMO LLC had to say about Vale S.A. (NYSE:VALE) in its Q1 2022 investor letter:
“Let’s look at Vale (NYSE:VALE), the world’s largest iron ore producer, as a case study for how shareholders can be rewarded. Vale’s stock price is about where it was at the beginning of last year. Despite the market’s lack of enthusiasm, the company generated about $20 billion of free cash flow last year. Not bad for a company with a market cap of a little over $100 billion and no substantive debt as of the end of March. 4 What did the company do with all that cash? Last year, Vale paid out about $9 billion in regularly scheduled dividends and distributed another $10 billion between extra dividends and share repurchases. Combined with dividends distributed in the first quarter of this year and a recently announced share repurchase, Vale has returned or announced the return of over $33 billion since the beginning of last year, almost a 32% yield relative to the market cap of the company. Not a bad way to win.”
11. Teladoc Health, Inc. (NYSE:TDOC)
Share Price as of December 17: $27.02
Number of Hedge Fund Holders: 27
Teladoc Health, Inc. (NYSE:TDOC) is a multinational telemedicine and virtual healthcare company that provides telehealth, medical opinions, AI and analytics, telehealth devices and licensable platform services.
Oppenheimer analyst Michael Wiederhorn lowered the price target on Teladoc Health, Inc. (NYSE:TDCO) to $45 from $55 and kept an Outperform rating on the shares following quarterly results on October 27. According to the analyst, the company’s Q3 results reflected its success in expanding margins, with BetterHelp driving gross margin and Tech/Dev savings driving OpEx. The analyst believes Teladoc is righting the ship with a balanced approach toward efficiency and growth, and remains attractively valued at current prices.
At the end of the third quarter of 2022, 27 hedge funds in the database of Insider Monkey held stakes worth $906.3 million in Teladoc Health, Inc. (NYSE:TDOC), compared to 32 the preceding quarter worth $1.2 billion.
Greenhaven Road Capital made the following comment about Teladoc Health, Inc. (NYSE:TDOC) in its Q3 2022 investor letter:
“At the end of last year and the beginning of this year, I sold two of our highest multiple holdings and invested in Teladoc Health, Inc. (NYSE:TDOC), believing that swapping out of the highest multiple holdings into a lower multiple holding would provide protection in the event of multiple compression. However, the reality is that the multiple compression on currently loss-making (unprofitable) companies has been severe regardless of starting multiple, and TDOC’s lower relative starting point afforded us far less protection than I expected. We are no longer shareholders today but continue to follow the business and may return someday given its market size, product portfolio, and valuation.”
10. Macy’s, Inc. (NYSE:M)
Share Price as of December 17: $20.40
Number of Hedge Fund Holders: 31
Macy’s, Inc. (NYSE:M) operates as an American chain of high-end department stores founded in 1858 by Rowland Hussey Macy. The company provides a wide range of merchandise, including clothing, accessories, cosmetics, home furnishings, and other consumer goods.
On November 18, Citi analyst Paul Lejuez raised the price target on Macy’s, Inc. (NYSE:M) to $25 from $21 and maintained a Neutral rating on the shares. Lejuez states that the company’s Q3 was better than guidance and consensus forecasts, and while it lowered its Q4 guidance, the new range seems achievable. While the mall-based department store sector is structurally challenged, the analyst believes Macy’s risk/reward to be balanced currently.
According to Insider Monkey’s database, 31 hedge funds held shares of the company at the end of the third quarter of 2022. Arrowstreet Capital was the most bullish fund on the company’s stock at the end of Q3 2022.
9. Hewlett Packard Enterprise Company (NYSE:HPE)
Share Price as of December 17: $26.72
Number of Hedge Fund Holders: 36
The Hewlett-Packard Enterprise Company (NYSE:HPE), commonly shortened to Hewlett-Packard or HP, is an American multinational information technology company headquartered in Palo Alto, California. The company offers a range of edge computing solutions designed to meet the needs of customers in numerous industries, including retail, manufacturing, healthcare, and finance.
On December 5, Loop Capital analyst Ananda Baruah raised the price target on Hewlett Packard Enterprise Company (NYSE:HPE) to $17 from $14 and kept a Hold rating on the shares. The analyst cites the company’s Q4 earnings beat while noting that it continues to experience relatively stable demand across its core server, networking, and storage businesses.
At the end of Q3 2022, 36 hedge funds were long Hewlett Packard Enterprise Company (NYSE:HPE) and disclosed positions worth $842.9 million. This is compared to 37 hedge funds in the previous quarter with stakes worth $709.4 million. As of September 30, Pzena Investment Management is the most prominent shareholder in the company and has a position worth $362.7 million.
8. Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH)
Share Price as of December 17: $14.32
Number of Hedge Fund Holders: 38
Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH), also known simply as Norwegian, is an American cruise line founded in 1966, incorporated in Bermuda, and headquartered in Miami. The company operates under the Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises brands.
On December 6, JPMorgan analyst Daniel Adam assumed coverage of Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) with an Overweight rating and price target of $30, down from $35. Calling Norwegian his top pick in the cruise sector, the analyst’s positive outlook for the company reflects its “disciplined” market-to-fill pricing strategy, “outsized” growth potential versus peers, and attractive relative valuation.
According to Insider Monkey’s Q3 data, 38 hedge funds reported owning stakes worth $367.68 million in Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH), compared to 28 funds in the prior quarter worth $287.26 million. John W. Rogers’ Ariel Investments is the leading stakeholder of the company, with 6.40 million shares valued at $71.2 million.
Ariel Investment made the following comment about Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) in its Q3 2022 investor letter:
“Cruise ship operator Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) also aided relative performance in the period. Onboard spending has been stronger than management expectations and forward booking commentary remains encouraging with both trends and pricing for 2023 ahead of pre-pandemic levels. Though questions persist around the macro backdrop, NCLH has an experienced executive management team at its helm, a young average fleet and solid liquidity position. Over the longterm, we believe the current headwinds travel and leisure are experiencing will soften and expect NCLH’s fundamentals will prove resilient in the face of adversity. At today’s valuation, NCLH is currently trading at a -70% discount to our estimate of private market value.”
7. FirstEnergy Corp. (NYSE:FE)
Share Price as of December 17: $40.93
Number of Hedge Fund Holders: 41
FirstEnergy Corp (NYSE:EE) is an electric utility headquartered in Akron, Ohio. Established in 1997, its subsidiaries and affiliates are involved in the distribution, transmission, and generation of electricity, as well as energy management and other energy-related services.
On October 24, Guggenheim analyst Shahriar Pourreza lowered the price target on FirstEnergy Corp. (NYSE:FE) to $34 from $43 and maitained a Neutral rating on the shares of the company. According to the analyst, he had adjusted select estimates ahead of Q3 earnings season from the Power and Utilities group to reflect “known and measurable year-over-year items,” to adapt for seasonality.
At the end of Q3 2022, 41 hedge funds disclosed ownership of stakes in FirstEnergy Corp. (NYSE:FE). The total value of these stakes amounted to $1.66 billion. This is compared to 42 positions in the preceding quarter with stakes worth $1.78 billion. As of September 30, Icahn Capital LP is the largest investor in FirstEnergy Corp. (NYSE:FE) and has stakes worth $701.8 million.
6. Ford Motor Company (NYSE:F)
Share Price as of December 17: $12.12
Number of Hedge Fund Holders: 47
Ford Motor Company (NYSE:F) is an American multinational automobile manufacturer that sells automobiles and commercial vehicles under the Ford brand, and luxury cars under its Lincoln luxury brand.
At the end of November, Citi analyst Itay Michaeli raised the price target on Ford Motor Company (NYSE:F) to $14 from $13 and kept a Neutral rating on the shares. The analyst updated his model to reflect the company’s Q3 results and recent data points. The analyst’s new target represents modestly higher multiples reflecting the company’s improved auto free cash flow conversion in 2022.
At the end of the third quarter of 2022, 47 hedge funds in the database of Insider Monkey held stakes worth $1.2 billion in Ford Motor Company (NYSE:F), compared to 46 in the preceding quarter worth $608.8 million.
In its Q3 2022 investor letter, Leaven Partners, an asset management firm, highlighted a few stocks and Ford Motor Company (NYSE:F) was one of them. Here is what the fund said:
“In our last quarterly letter, I briefly mentioned that the consensus estimates for corporate profits appeared to be a bit too sanguine. I referenced a Reuters article that reported, as of June 17, Wall Street expected S&P 500 earnings to grow by 9.6% in 2022, which was up from 8.8% in April and from 8.4% in January. That tune began to change at the end of July and accelerated in August and September, as major players, such as Ford (NYSE:F), have recently issued profit warnings and/or have withdrawn guidance. In response, Wall Street has altered its outlook: lowering third-quarter profit growth to 4.6% [2] from 7.2% in early August and slashing full-year profit growth to 4.5%.”
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Disclosure: None. 15 Best Affordable Stocks To Buy Nowis originally published on Insider Monkey.
