In this article we discuss the 5 Cheap Stocks To Invest In (February 2021). If you want to read our detailed analysis of these stocks, go directly to 10 Cheap Stocks To Invest In (February 2021).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s take a look at the 5 cheap stocks to invest in:
5. Cardinal Health, Inc. (NYSE: CAH)
Number of Hedge Funds: 49
P/E Ratio: 11.30
Ohio-based Cardinal sells generic pharmaceutical, specialty and OTC healthcare products. It also provides pharmacy management services to hospitals, while its instruments division sells medical, surgical and laboratory products. The stock is down 12% over the last 12 months. In the December quarter, the company posted adjusted EPS of $1.74, beating the Street estimates by $0.29. The company also upped its full-year 2021 outlook for adjusted EPS to $5.85-$6.10 versus prior range of $5.65-$5.95.
As of the end of the fourth quarter, 49 hedge funds tracked by Insider Monkey were long CAH, up from 45 funds a quarter earlier.
4. Bunge Limited (NYSE: BG)
Number of Hedge Funds: 51
P/E Ratio: 10.24
Food company Bunge is one of the 10 cheap stocks to invest in, as of February 2021. The company is involved in food processing, grain trading and fertilizers. In the fourth quarter, the company posted non-GAAP EPS of $3.05, above the Street’s estimates by $1.23. For 2021, the company expects EPS of at least $6, above the Street’s estimate of $5.50. Over the last 12 months, Bunge shares are up by a whopping 45%.
There were 51 hedge funds in our database that held stakes in Bunge Limited, compared to 41 funds in the third quarter. Moore Global Investments is the biggest stakeholder in the company.
3. Lennar Corporation (NYSE: LEN)
Number of Hedge Funds: 52
P/E Ratio: 10.93
Florida-based title insurance company LEN ranks 3rd on our list of 10 cheap stocks to invest in. The company provides mortgage loans, title insurance and closing services and develops multifamily rental properties. In January 2021, the company’s board of directors approved a stock repurchase program of up to 25 million shares, or about $1 billion, without an end date. The company had repurchased 14 million common shares for $781 million under its prior share buyback program. Lennar’s Q4 results were also strong amid an upbeat housing demand. It posted an EPS of $2.82, crushing past the Street’s estimate of $2.37 per share.
As of the end of the fourth quarter, 52 hedge funds in Insider Monkey’s database of 887 funds held stakes in Lennar Corp. Edgar Wachenheim’s Greenhaven Associates is the biggest stakeholder in the company, with 7.5 million shares, worth $575 million.
2. Biogen Inc. (NASDAQ: BIIB)
Number of Hedge Funds: 63
P/E Ratio: 11.37
Switzerland-based Biogen specializes in treatment of neurological diseases. Earlier in February, the company’s CEO Michael Vousantos said that the company is expecting a “financial reset” in 2021. In the fourth quarter, the company posted a non-GAAP EPS of $4.58, missing the consensus by $0.18. Revenue in the period plummeted 22%. Revenue in 2021 is projected to be in the range of $10.45 billion-$10.75 billion, compared to the Street’s estimate of $11.24 billion.
Our database shows that 63 hedge funds held stakes in Biogen Inc. at the end of December, versus the 59 funds in the third quarter.
1. D.R. Horton, Inc. (NYSE: DHI)
Number of Hedge Funds: 64
P/E Ratio: 10.69
Texas-based home construction company D. R. Horton Inc is one of the 10 cheap stocks to invest in, as of February 2021. The company builds and sells single-family detached homes and attached homes. It also offers mortgages and title insurance services. The stock is up about 25% over the last 12 months. The company in January beat the Wall Street’s fiscal first-quarter estimates. Home closings in the year came in at 80K-82K, versus 65.4K homes closed in fiscal 2020.
According to our database, the number of DHI’s long hedge funds positions increased at the end of the fourth quarter of 2020. There were 64 hedge funds that hold a position in D.R. Horton by the end of December, compared to the 62 funds in the third quarter.
You can also take a peek at Warren Buffett’s Top 10 Stock Picks and 10 Best Value Stocks to Buy for 2021.
