5 Cheap Stocks to Buy Before Christmas

2. Flex Ltd. (NASDAQ:FLEX)

Number of Hedge Fund Holders: 43 

Share Price as of November 4, 2021: $17.83

Flex Ltd. (NASDAQ:FLEX) provides supply chain services and solutions to the semiconductor industry. The products sold by the semiconductor industry are used in electronics around the world. During the holiday season, a lot of retail outlets have sales on these items, during which a lot of electronics are sold. With supply chain issues disrupting the production of chips, the role the company plays in the coming months has become of vital importance. 

Flex Ltd. (NASDAQ:FLEX) has quietly been expanding business capabilities as it navigates supply chain problems for chipmakers. In October, the firm announced that it had acquired Anord Mardix, a critical power solutions provider, for $540 million. 

At the end of the second quarter of 2021, 43 hedge funds in the database of Insider Monkey held stakes worth $1.4 billion in Flex Ltd. (NASDAQ:FLEX), down from 48 the preceding quarter worth $1.6 billion.

In its Q4 2020 investor letter, Sound Shore Management, an asset management firm, highlighted a few stocks and Flex Ltd. (NASDAQ:FLEX) was one of them. Here is what the fund said:

“Our third quarter addition of contract manufacturer Flex provides a great example. Originally an electronics-focused outsource manufacturer with highly cyclical cash flows and short product lifecycles, the company has evolved its customer base toward the capital goods, automotive and healthcare industries. Having successfully recast itself as a longer-cycle, “new industrial,” Flex’s stock is benefitting from more stable and diversified cash flows and more consistent revenue growth. CEO Revathi Advaithi joined in early 2019 and she has refocused the company by accelerating the transition to these longer-cycle businesses. Moreover, the company has been shareholder oriented, using the company’s ample free cash to reduce shares outstanding by 35% in the last decade. Lastly, Flex’s Nextracker division should provide nice upside. The solar tracking company manufactures motors, software and systems for utility-scale power generation projects and business is growing quickly as the shift toward sustainable energy sources hastens. We believe Nextracker is underappreciated and could represent a significant amount of hidden value. At 13 times earnings Flex is a very attractive risk reward opportunity.”