5 Best Bargain Stocks To Buy Right Now

In this article, we shall discuss the 5 best bargain stocks to buy right now. To read our detailed analysis of the global economic outlook in 2022, go directly and see 10 Best Bargain Stocks To Buy Right Now.

5. Ford Motors Co. (NYSE:F)

Number of Hedge Fund Holdings: 46

YTD Decline (As of October 29): 39.09%

Based in Dearborn, Michigan, Ford Motors (NYSE:F) is an American multinational automobile manufacturer which specializes in the production and sale of automobiles, commercial vehicles, and luxury cars. On October 26, the company posted Q3 2022 earnings, generating a total revenue of $39.4 billion, beating consensus $36.25 billion. Ford Motors (NYSE:F) beat EPS estimates of $0.27 by $0.03, posting earnings of $0.30 per share in Q3 2022.

On October 5, Morgan Stanley analyst Adam Jonas upgraded the rating on Ford Motors (NYSE:F) to Overweight from Equal Weight, citing the company’s creation of Ford Blue and Ford Model E, which have the potential to better align the growth and capex needs of the EV business with a more favorable cost of capital, which is likely to profit the company through to 2027.

Here is what Leaven Partners had to say about Ford Motors (NYSE:F) in their Q3 2022 investor letter:

“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in August and September, as major players, such as Ford (NYSE:F), has recently issued profit warnings and/or have withdrawn guidance.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%.”

4. Micron Technology Inc. (NASDAQ:MU)

Number of Hedge Fund Holdings: 69

YTD Decline (As of October 29): 43.56%

Headquartered in Boise, Idaho, Micron Technology Inc. (NASDAQ:MU) is an American producer of computer memory and computer data storage including dynamic random-access memory (DRAM), flash-memory, and USB flash drives. The company’s consumer products are marketed under the brands Crucial and Ballistix. In Q3 2022, the company beat EPS estimates of $1.30 by $0.15, posting earnings of $1.45 per share.

On October 13, Loop Capital analyst Charles Park initiated coverage of Micron Technology Inc. (NASDAQ:MU) with a Buy rating and a $70 price target. Although the analyst expects DRAM  fundamentals to bottom in the first half of 2023, with the near-term macro and demand uncertainties remaining stringent, the memory industry offers a favorable risk/reward ratio, and is likely to pick up in 2024. He contends that with the stock’s low valuation, coupled with drastic cuts in spending of almost 30% year-over-year in Q2 2022, it provides an excellent entry-point for long-term investors.

Here is what Claret Asset Management had to say about Micron Technology Inc. (NASDAQ:MU) in their Q3 2022 investor letter:

“Inflation is still higher than interest rates… not an incentive to save for most people. Either inflation must come down or interest rates have to go up further. Or both. And probably both. Now that they are taking the punch bowl away and the party is over, what happens next? For whatever reason, the stock market seems to always precede the economic reality: Micron (NASDAQ:MU) reached a high of $98.45 on January 5th, 2022 and is trading at $50.00 today.”

3. Booking Holdings Inc. (NASDAQ:BKNG)

Number of Hedge Fund Holdings: 93

YTD Decline (As of October 29): 31.96%

Booking Holdings Inc. (NASDAQ:BKNG) is an American travel technology company based in Norwalk, Connecticut. The company owns and operates several travel fare aggregators and travel fare metasearch engines. After a disappointing 2021, the company’s fundamentals have been on the rebound during Q2 2022, with management issuing a bullish guideline for Q3 2022 in early August. As of the second quarter of 2022, the company posted an EPS of $19.08, beating estimates of $17.48 by $1.60.

Number of Hedge Fund Holdings: 97

YTD Decline (As of October 29): 55.76%

Based in San Jose, California, PayPal Holdings Inc. (NASDAQ:PYPL) is an American multinational financial technology company which operates an online payments system in the majority of countries which support online money transfers, and also provides electronic alternatives to traditional paper methods such as checks and money orders. As of the second quarter of 2022, the company beat EPS estimates of $0.86 by $0.07, posting earnings of $0.93 per share. Net revenues for the stock are expected to reach up to $7.02 billion in Q3 2022, growing about 10% on a spot basis.

On October 12, Atlantic Equities analyst Kunaal Malde lowered the price target on PayPal Holdings Inc. (NASDAQ:PYPL) to $110 from $120, maintaining an Overweight rating on the shares. According to the analyst, as the threat of an impending recession becomes more apparent, he is assuming a modest economic downturn in 2023 forecasts. The company’s market cap is set to triple by 2030, with the current leadership of the company focused on acquisitions, share buybacks, a strong cash position, and meaningful partnerships. All these factors are potential growth drivers for the company, with the company aiming to increase its presence in developed countries, where the platform’s consumer penetration is still below 50%. And since payment stocks are beginning to discount, the analyst maintains that high-quality stocks like PayPal Holdings Inc. (NASDAQ:PYPL) have attractive valuations and limited downside to consensus earnings forecasts, making them an excellent investment opportunity for the long-term investor.

Here is what RiverPark Funds had to say about PayPal Holdings Inc. (NASDAQ:PYPL) in their Q3 2022 investor letter:

“PayPal (NASDAQ:PYPL), announced better-than-expected 2Q results, positive guidance (including more than $1.3 billion of 2023 cost savings leading to operating margin expansion), a $15 billion stock repurchase program, and the appointment of Blake Jorgensen as CFO, who was previously the well-regarded CFO at Electronic Arts. The company reported 9% revenue growth, in-line with guidance, and $0.93 EPS, exceeding guidance due to robust operating leverage. Management narrowed its 2022 revenue guidance from 11%-13% growth to about 11% growth due to the macro environment but raised its EPS guidance due to greater operating margin leverage and share buybacks. The stock also reacted to the news that activist investor Elliott Management had taken a stake in the company. PYPL operates at significantly lower margins than its payment competitors Visa and Mastercard, and sources suggest that Elliott intends, among other things, to push for the company to improve its margins and drive higher cash flow growth in the near term.

PayPal (NASDAQ:PYPL) provides direct exposure to the secular growth in ecommerce-driven digital payments as it is the most accepted digital wallet on-line. More than 3/4 of the 1,500 largest online retailers across North America and Europe accept PayPal (NASDAQ:PYPL), which is almost triple the acceptance of Apple Pay, the number two digital wallet. PayPal (NASDAQ:PYPL) is also a key beneficiary of the current dramatic shift in consumer buying habits brought on by the pandemic, as well as the relatively newer consumer-to-consumer payment trends through its Venmo peer-to-peer (P2P) payment service. With a 2Q non-GAAP operating margin of 19%, PYPL also has significant margin expansion potential given that competitors Adyen, Visa and Mastercard have 50%-65% operating margins. We believe the combination of the secular growth of eCommerce and P2P payments, along with expanding operating leverage and the strategic use of the company’s significant and growing cash balance should fuel a mid-20% earnings growth rate over the next five years. This, to us, presents an excellent risk/reward profile given that PYPL trades at a modest premium to the market multiple and a 6% 2023 FCF yield.”

1. Meta Platforms Inc. (NASDAQ:META)

Number of Hedge Fund Holdings: 184

YTD Decline (As of October 29): 70.70%

Based in Menlo Park, California, Meta Platforms Inc. (NASDAQ:META) is an American multinational technology conglomerate which owns popular social media sites like Facebook, Instagram, and WhatsApp, among other products and services. Although the company’s Q3 2022 earnings report was dismal, with shares plummeting to 70.70% year-to-date as of October 29, the company is still highly lucrative to support its high-potential bets in the long-term. The addressable markets of the company’s VR initiatives are beyond video games and social networks, and the timeline to capitalize on these highly nonlinear potentials is closer than the market recognizes, given the recent advancements in AI and VR algorithms.

On October 28, MKM Partners analyst Rohit Kulkarni lowered the price target on Meta Platforms Inc. (NASDAQ:META) to $140 from $195, keeping a Buy rating on the shares. The analyst noted that Meta Platforms Inc. (NASDAQ:META) posted a favorable upside in Q3 2022 revenue, with impressive growth in engagement and active users. The outlook for 2023 returns imply a substantial step-up relative to expectations  and though the stock may not see any relief in the near-term, with engagement continuing to rise, the company has turned a monetization corner with rising contributions from messaging ads, reels, and WhatsApp ads.

Here is what Wedgewood Partners had to say about Meta Platforms Inc. (NASDAQ:META) in their Q3 2022 investor letter:

“Meta Platforms, Inc. (NASDAQ:META) detracted from performance during the quarter. Meta’s advertising revenue grew +3% (currency-adjusted) over 2021 and is up +70% since 2019 (pre-pandemic). The shift of advertisers and consumers to social media has been fairly dramatic and sticky. The Company reported $2.88 billion “daily active people” of its Family of Apps (as of June 2022) and is +35% higher than the comparable month pre-COVID (June 2019). Meta also serves over 10 million advertisers which is up from 8 million in January 2020. In spite of these impressive gains, the stock now trades at absolute levels well below where it traded before the pandemic. We suspect much of the market’s concern revolves around slowing revenue growth. It is fairly evident that there was a tremendous pull-forward of demand for many businesses and services over the past couple of years, and that the normalization of revenue growth from that “pull-forward” is hardly an existential crisis. Further, while Meta’s profit margins have fallen below pre-pandemic levels, it’s important to note that the Company likely hired well in excess of what it needed because it assumed the pandemic induced growth would continue. Meta has plenty of room to moderate its expense base and drive significant value by repurchasing shares at today’s historically depressed multiples.”

You can also take a peek at 12 Biggest Genomics Companies in the World and 10 Best Medical Stocks Under $5.

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