5 Dirt Cheap Stocks To Buy

2. Lumen Technologies, Inc. (NYSE:LUMN)

Price as of January 12: $6.04

P/E Ratio: 3.02

Number of Hedge Fund Holders: 34

Lumen is one of the best dirt cheap stocks to buy now. Lumen Technologies, Inc. (NYSE:LUMN) provides data communication, VoIP, IP, fiber infrastructure and related services. The stock was hammered after Lumen Technologies, Inc. (NYSE:LUMN) announced in November that it was eliminating its dividend and allocating resources for share buyback programs instead. Lumen Technologies, Inc. (NYSE:LUMN) has a $1.5 billion share buyback program, with the flexibility of deploying it within a two-year window. The stock has a PE ratio of 3 as of January 12. While dividend termination was a bad news, Lumen bulls believe that the company is doing what was necessary. The stock could be profitable for long-term investors. Lumen Technologies, Inc. (NYSE:LUMN)’s management is also planning to divest non-core and low-growth assets to deleverage Lumen Technologies, Inc. (NYSE:LUMN)’s balance sheet.  These measures can show results in the future.

As of the end of the third quarter, 34 hedge funds tracked by Insider Monkey reported having stakes in Lumen Technologies, Inc. (NYSE:LUMN), compared to 42 funds in the previous quarter.

Here is what Longleaf Partners specifically said about Lumen Technologies, Inc. (NYSE:LUMN) in its Q3 2022 investor letter:

“Lumen Technologies, Inc. (NYSE:LUMN) – Global fiber company Lumen was the top detractor in the quarter. In September, the company announced a new CEO, Kate Johnson, would take over for Jeff Storey. Johnson has a strong track record of delivering organic revenue growth, the primary area where Lumen has struggled. Johnson held previous roles at GE and Microsoft, where she most recently served as head of Microsoft US and doubled her division’s revenue in only four years. Multiple checks through our network vouch for her and suggest this leadership change is a positive upgrade that will bring the discipline and focus on sales that Lumen has been missing. The market reacted negatively with concern over the potential for another dividend cut or strategy change. We are confident the stock price reaction is highly overblown versus any impact that a potential dividend cut would have on value per share. The stock now trades at 4.5x EBITDA, and we believe the best value accretive capital allocation move today is share repurchase. Shortly after quarter end, Lumen closed on the sale of part of its consumer business to Apollo, further improving its balance sheet and business mix.”