In this article, we discuss the 5 best very cheap stocks to buy in 2022. If you want to see more stocks in this selection, check out 11 Best Very Cheap Stocks To Buy Now According To Hedge Funds.
05. Under Armour, Inc. (NYSE:UA)
Number of Hedge Fund Holders as of Q2, 2022: 38
Stock Price as of October 27: $6.42
Under Armour, Inc. (NYSE:UA) is a Baltimore, Maryland-based manufacturer and seller of sports apparel, athletic shirts, and other products. On October 26, Citi analyst Paul Lejuez lowered his price target on Under Armour, Inc. (NYSE:UA) to $8 from $10 and kept a Neutral rating on the shares.
Under Armour, Inc. (NYSE:UA) anticipates its annual topline growth to be around 6% during FY23. The company has undergone restructuring to improve its sales and gross profit margins. Experts believe the stock is cheap, with a forward EV/Sales multiple below 0.6. On October 20, Williams Trading analyst Sam Poser upgraded Under Armour, Inc. (NYSE:UA) to Hold from Sell with a $6.50 price target.
According to Insider Monkey’s Q2 data, Under Armour, Inc. (NYSE:UA) was found in the public stock portfolios of 38 hedge funds, with collective stakes in the company worth $486.74 million. Adage Capital Management was the top shareholder of Under Armour Inc (NYSE:UA) in the second quarter, with a $96.69 million stake consisting of 12.75 million shares. Moreover, Renaissance Technologies increased its investment in Under Armour, Inc. (NYSE:UA) by 96% during Q2 2022.
04. Sabre Corporation (NASDAQ:SABR)
Number of Hedge Fund Holders as of Q2, 2022: 38
Stock Price as of October 27: $5.61
Sabre Corporation (NASDAQ:SABR) is a software and technology services solutions provider for the global travel industry. The firm is based in Southlake, Texas, the United States. Sabre Corporation (NASDAQ:SABR) is one of the three key players in the global distribution system (GDS) market that connects wholesale travel suppliers and buyers.
According to experts, the multi-year agreement with Avianca to provide GDS services will bring long-term expansion for the company. Moreover, despite the risk of a heavy debt load, Sabre Corporation (NASDAQ:SABR)’s present value offers a positive risk-reward profile for the business. On October 17, Mizuho analyst Matthew Broome lowered his price target on Sabre Corporation (NASDAQ:SABR) to $6 from $7 and kept a Neutral rating on the shares. The analyst cut the price target but says a lot of risk is now priced into the stock.
According to Insider Monkey’s Q2 data, 38 hedge funds were bullish on Sabre Corporation (NASDAQ:SABR), with combined stakes amounting to $435 million. Terry Smith’s Fundsmith LLP is the leading stakeholder of the company, with 22.4 million shares worth $131 million.
03. Peloton Interactive, Inc. (NASDAQ:PTON)
Number of Hedge Fund Holders as of Q2, 2022: 39
Stock Price as of October 27: $7.87
Peloton Interactive, Inc. (NASDAQ:PTON) is a wellness company that provides an interactive fitness platform. This allows its users to exercise from home while engaging with friends and exercise groups over the Internet. The company is based in New York, United States.
Peloton Interactive, Inc. (NASDAQ:PTON) rode the coronavirus wave to touch record highs. During the pandemic, its shares appreciated by a whopping 726% as lockdowns forced consumers to use its products. However, since then, they have dropped below their pre-pandemic levels. The current difficulties facing Peloton Interactive, Inc. (NASDAQ:PTON) may be passing, according to experts, and there is a good probability that things will turn around. Its user base is substantial enough to produce an annual gross profit of almost $1 billion.
By the end of this year’s second quarter, 39 out of the 895 hedge funds polled by Insider Monkey had held Peloton Interactive, Inc. (NASDAQ:PTON)’s shares. Peloton Interactive, Inc. (NASDAQ:PTON)’s largest investor in our database is Anand Desai’s Darsana Capital Partners, which owns 7.5 million shares that are worth $68 million.
Merion Road Capital mentioned the company in its Q3 2022 investor letter. Here is what the fund said:
“Peloton Interactive, Inc. (NASDAQ:PTON) is quite a different story. You may recall from my Q1 letter that I initiated a position in the stock given the potential for a new CEO to leverage the company’s passionate and engaged userbase. The investment had meaningful upside potential (multiples of the then trading price), but also presented real downside risk; as such, I kept our exposure to just a few percentage points of the portfolio. Fast forward six months and underlying trends like churn, engagement, and new users weakened dramatically. I sold our shares as the likelihood for the company to achieve financial success has become increasingly remote.”
02. Lumen Technologies, Inc. (NYSE:LUMN)
Number of Hedge Fund Holders as of Q2, 2022: 42
Stock Price as of October 27: $7.05
Lumen Technologies, Inc. (NYSE:LUMN) is a leading American telecommunications company that provides communications, network services, security solutions, and cloud solutions among other services.
Shares of Lumen Technologies, Inc. (NYSE:LUMN) have pulled back in 2022 and are now presenting an attractive buying opportunity for investors. As of October 26, the stock has a trailing twelve-month PE ratio of 3.49 and is awarding shareholders a forward dividend yield of 14.45%. Lumen Technologies, Inc. (NYSE:LUMN) has free cash flows of over $3 billion and is one of the best cheap stocks to buy now. On October 20, RBC Capital analyst Bora Lee lowered his price target on Lumen Technologies, Inc. (NYSE:LUMN) to $6 from $11 and kept a Sector Perform rating on the shares.
At the end of Q2 2022, 42 hedge funds were long Lumen Technologies, Inc. (NYSE:LUMN) and held stakes worth $1.02 billion in the company. This is compared to 30 positions in the previous quarter with stakes worth $904.85 million. The hedge fund sentiment for the stock is positive.
01. Southwestern Energy Company (NYSE:SWN)
Number of Hedge Fund Holders as of Q2, 2022: 47
Stock Price as of October 27: $6.68
Topping our list of the best very cheap stocks is Southwestern Energy Company (NYSE:SWN). Southwestern Energy Company (NYSE:SWN) is a Texas-based corporation involved in the exploration and production (E&P) of natural gas. Southwestern Energy Company (NYSE:SWN)’s share price has grown by a strong 41% year to date, compared to indexes such as the New York Stock Exchange, which has seen its value drop by 16%. On October 19, Jefferies analyst Lloyd Byrne initiated coverage of Southwestern Energy with a Buy rating and $11 price target.
For Q2, a total of 47 hedge funds are bullish on Southwestern Energy Company (NYSE:SWN) as compared to 35 in the previous quarter. Jim Simons’s Renaissance Technologies is Southwestern Energy Company (NYSE:SWN)’s largest investor. It owns 33 million shares that are worth $210 million.
Greenlight Capital discussed its outlook on Southwestern Energy Company (NYSE:SWN) in its Q1 2022 investor letter. Here’s what the firm said:
“SWN is the second largest producer of natural gas in the U.S. The company is well-situated to satisfy growing domestic and export demand. Over the short, medium and long term, Europe now intends to reduce its reliance on Russian energy and increase its use of U.S. LNG. Based on its 2021 year-end reserves – which assumed a $3.60/MMBtu long-term natural gas price – SWN has a PV-104 value of $13.83 per share. By the end of the first quarter, the U.S. natural gas 5-year forward curve averaged $4.28/MMBtu, while international seaborne LNG was close to $20/MMBtu. Over the intermediate term, with the benefit of substantial global investment in infrastructure, we expect prices for U.S. and international natural gas to converge. We acquired our shares at an average price of $6.58. SWN shares ended the quarter at $7.17.”
You can also take a look at the 10 Best Dividend Stocks on Robinhood and 11 Best Metal Stocks To Buy Now.
