In this piece, we will take a look at eight best stocks under $50 to invest in now.
As we navigate through 2024, the economic landscape presents a mix of challenges and opportunities for investors. Recent economic indicators suggest a cautious yet resilient consumer base, even as the Federal Reserve has issued its first interest rate cut since 2020. The current financial environment reflects a deliberate balancing act by the Fed, aimed at achieving a “soft landing” for the economy—taming inflation without triggering a recession. This approach has significant implications for the stock market, particularly for stocks priced under $50, which often represent a combination of risk and reward for discerning investors.
According to Gregory Daco, Chief Economist at EY-Parthenon, the U.S. economy is showing signs of gradual downshift. Both consumers and businesses are displaying a more prudent approach to spending, influenced by a tightening labor market and rising costs. The latest data revealed a moderate job growth of 142,000 in August, but this was overshadowed by significant downward revisions in payroll figures, indicating a potential softening of employment conditions. Despite these headwinds, Daco remains optimistic, projecting that real GDP growth will average 2.7% in 2024, easing to 1.8% in 2025.
In terms of consumer behavior, the retail sector has shown resilience, with spending continuing, albeit at a more cautious pace. Daco notes that while consumers are not significantly retracting their expenditures, slower growth in disposable income could lead to more restrained spending patterns moving into 2025. He forecasts consumer spending growth to decelerate, averaging 2.5% in the fourth quarter of 2024 before dipping to 2% in 2025.
Inflation is another key factor influencing the economic outlook. The August Consumer Price Index (CPI) report indicated a noticeable acceleration in disinflation, with the headline CPI inflation decreasing to 2.5% year-over-year—the lowest rate since February 2021. This trend, however, must be interpreted cautiously, as core CPI inflation remained stable at 3.2%, signaling persistent inflationary pressures in certain sectors, notably housing. Nevertheless, Daco anticipates a continuing decline in both headline and core inflation, projecting rates of 2.2% and 2.9%, respectively, by the fourth quarter of 2024.
The Fed’s recent decision to cut interest rates by 50 basis points reflects its commitment to recalibrating monetary policy without resorting to drastic measures that could harm growth. Powell’s remarks underscore a careful approach to policy adjustments, with expectations of additional rate cuts in November and December. Overall, this easing cycle is expected to facilitate a more sustainable economic trajectory heading into 2025.
As the broader economic picture unfolds, the S&P 500 index has performed remarkably well, currently up approximately 20% year-to-date and approaching record highs. This surge is indicative of market sentiment that is cautiously optimistic about the potential for a soft landing. However, analysts have expressed concerns that current stock valuations might be overestimating economic stability, particularly in light of recent weaker-than-expected jobs reports.
Looking ahead, investors are particularly focused on upcoming labor market data, which will play a crucial role in shaping perceptions of the economy’s trajectory. The forthcoming employment report is critical, as it could either bolster confidence in the market’s current valuation or prompt a reevaluation of growth expectations. With a significant portion of the market priced for a “Goldilocks scenario”—where growth continues without significant inflation—the stakes are high for upcoming economic indicators.
Investors looking for value must consider a range of factors, including company fundamentals, market positioning, and broader economic trends. The careful selection of stocks in this category could not only mitigate risks associated with volatility but also capitalize on potential growth as the economic landscape stabilizes.
In summary, as we delve into the best stocks under $50 to invest in now, it is essential to keep an eye on the evolving economic indicators and consumer behavior. These elements will play a crucial role in determining which stocks can deliver value in an environment characterized by cautious spending, shifting monetary policy, and varying inflation rates.
A financial analyst studying market trends on a laptop, surrounded by graphs and charts.
Our Methodology
For this article, we identified 20 stocks trading on the NYSE and NASDAQ for under $50 per share as of September 27. Next, we examined Insider Monkey’s data on 912 hedge funds as of Q2 2024. We narrowed down our list to 8 stocks most widely held by institutional investors and ranked them in ascending order of the number of hedge funds that have stakes in them as of Q2 of 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
08. Schlumberger Limited (NYSE:SLB)
Number of Hedge Fund Holders: 67
Share Price as of September 27: $42.29
Schlumberger Limited (NYSE:SLB) is a leading provider of technology for reservoir characterization, drilling, production, and processing in the oil and gas industry. The company recently reported its strong Q2 2024 results, surpassing earnings expectations. Schlumberger Limited (NYSE:SLB) reported an adjusted earnings per share (EPS) of $0.85, exceeding analyst estimates of $0.826. This growth was supported by a robust performance across its international markets, particularly in the Middle East and Asia, and a consistent recovery in offshore developments globally.
In the second quarter, Schlumberger Limited (NYSE:SLB) total revenue increased by 5% sequentially to reach $9.1 billion. The company’s adjusted EBITDA margin expanded by 142 basis points to 25%, translating to an 11% sequential and 17% year-on-year increase in adjusted EBITDA. The firm generated $776 million in free cash flow, showcasing its ability to leverage operational efficiencies and drive strong cash generation.
Schlumberger Limited (NYSE:SLB) core divisions continue to perform well, with revenue from Production Systems and Reservoir Performance growing by 7% and 5% respectively. This growth was primarily driven by increased activity in the international markets and enhanced profitability in subsea production systems and artificial lift solutions. Furthermore, the company’s Well Construction division saw a 1% revenue increase, driven by strong international demand for its measurement and fluid activities, with margins increasing 125 basis points sequentially.
The company’s digital segment also saw impressive results, with revenue increasing by 10% sequentially and margins expanding by 435 basis points to 31%. This growth was due to robust digital sales and increased adoption of its digital solutions, which continues to support margin expansion.
Looking ahead, Schlumberger Limited (NYSE:SLB) is optimistic about the market dynamics, particularly in long-cycle gas and deepwater projects in key international markets such as the Middle East, Asia, and Latin America. This optimism is reinforced by the growing demand for its digital and AI solutions to drive efficiency and returns for customers.
Additionally, hedge fund interest in Schlumberger Limited (NYSE:SLB) increased slightly, with 67 hedge funds holding the stock as of Q2 2024, compared to 66 in the previous quarter, reflecting increased institutional confidence in the company’s growth prospects. Overall, with its strong balance sheet, continued focus on margin expansion, and commitment to returning value to shareholders, Schlumberger Limited (NYSE:SLB) remains well-positioned for further growth in 2024 and beyond.
07. Verizon Communications Inc. (NYSE:VZ)
Number of Hedge Fund Holders: 67
Share Price as of September 27: $44.89
Verizon Communications Inc. (NYSE:VZ) is a leading telecommunications company in the United States, providing a wide range of services, including wireless communications, broadband, and digital solutions for both consumers and businesses. As of Q2 2024, Verizon Communications Inc. (NYSE:VZ) has garnered attention from 67 hedge funds, maintaining its popularity from the previous quarter.
In its Q2 2024 earnings report, Verizon Communications Inc. (NYSE:VZ) reported solid financial performance in line with expectations. The company posted an EPS of $1.15, meeting analysts’ predictions. The results highlight the strength of Verizon’s business model and consistent financial performance, with the company focusing on revenue growth and expansion across its wireless and broadband segments.
Verizon Communications Inc. (NYSE:VZ) wireless service revenue grew by 3.5% year-over-year, reaching $19.8 billion, primarily driven by a 3.7% rise in consumer wireless service revenue, which amounted to $16.3 billion. This growth was fueled by increased adoption of the “myPlan” offering, which now covers over 30% of the company’s consumer phone lines. In addition, Verizon Communications Inc. (NYSE:VZ) fixed wireless access (FWA) revenue rose to $514 million in the quarter, showcasing the company’s strong position in the broadband market. FWA is expected to generate over $2 billion in revenue this year, contributing significantly to the company’s overall growth strategy.
Verizon Communications Inc. (NYSE:VZ) strong performance in the business segment further solidified its market presence. Postpaid phone net additions in the business segment totaled 156,000, marking the highest performance in the last six quarters. Verizon Communications Inc. (NYSE:VZ) also reported significant improvements in consumer postpaid phone net additions, which reached 148,000, reflecting the company’s successful efforts to expand its customer base and strengthen its competitive positioning.
Additionally, Verizon Communications Inc. (NYSE:VZ) focus on enhancing its broadband services continues to yield positive results. The company added 391,000 net broadband customers during Q2 2024, driven by strong demand for fixed wireless services, which posted a year-over-year growth of 69%. This growth enabled Verizon to surpass 11.5 million broadband subscribers, highlighting its ability to capture market share and expand its broadband business. Overall, Verizon Communications Inc. (NYSE:VZ) steady revenue growth, expanding customer base, and strong cash flow generation position it as a compelling investment option under $50 per share, offering a combination of stability and growth potential for investors seeking exposure to the telecom sector.
06. Teva Pharmaceutical Industries Limited (NYSE:TEVA)
Number of Hedge Fund Holders: 68
Share Price as of September 27: $17.46
Teva Pharmaceutical Industries Limited (NYSE:TEVA) is a prominent player in the global pharmaceutical industry, specializing in both specialty and generic medicines. As of Q2 2024, the company is held by 68 hedge funds, up from 58 in the previous quarter, reflecting growing institutional interest. Teva recently reported strong financial results, surpassing earnings expectations with a non-GAAP EPS of $0.61 against an anticipated $0.57.
The company’s Q2 2024 revenue increased to $4.2 billion, representing 11% year-over-year growth. This robust performance was driven by Teva’s effective execution of its growth strategy, focusing on its four key pillars: delivering on growth engines, stepping up innovation, sustaining its generics powerhouse, and optimizing its business. The adjusted EBITDA for the quarter stood at $1.2 billion, reflecting a 4% rise, while non-GAAP EPS increased by 9%. The solid earnings performance has led Teva to raise its full-year guidance across revenue, EBITDA, and EPS, which is a positive indicator of its financial health.
Teva Pharmaceutical Industries Limited (NYSE:TEVA) revenue growth was broad-based, with all business segments contributing. AUSTEDO, a leading product for the company, recorded 32% revenue growth, generating $407 million. Driven by higher demand and successful product extensions, AUSTEDO’s momentum enabled Teva to increase its annual revenue target for the drug from $1.5 billion to $1.6 billion. AJOVY, another key drug, grew 12% in the European and international markets, reflecting the strength of the company’s innovative portfolio.
The generics segment, a cornerstone of Teva Pharmaceutical Industries Limited (NYSE:TEVA) business, saw a remarkable 14% growth, underscoring its competitive positioning in this space. This performance was supported by new product launches, especially the introduction of SIMLANDI, Teva Pharmaceutical Industries Limited (NYSE:TEVA) biosimilar to Humira, which has gained strong traction since its launch. Additionally, the approval of a biosimilar to Stelara, set for a February 2025 release, adds to Teva Pharmaceutical Industries Limited (NYSE:TEVA) future revenue potential.
Teva Pharmaceutical Industries Limited (NYSE:TEVA) expanding pipeline, which includes promising candidates like Olanzapine and anti-TL1A, indicates a strong outlook for continued innovation and market share gains. With its strategic focus and strong financials, Teva Pharmaceutical Industries Limited (NYSE:TEVA) is well-positioned to deliver sustained value to shareholders, making it one of the best stocks under $50 to invest in now.
Sound Shore Management made the following comment about Teva Pharmaceutical Industries Limited (NYSE:TEVA) in its Q3 2023 investor letter:
“Away from power, drug maker Teva Pharmaceutical Industries Limited (NYSE:TEVA), a new holding, also performed well during the quarter. Teva develops, manufactures and markets generic and specialty drugs focused on neurological and respiratory diseases, as well as oncology. Following a period of poor capital allocation decisions in prior years, we were able to invest at a very attractive valuation. We now believe management has positioned the company for renewed growth, driven by its most promising branded drug pipeline in years. The investment is off to a good start and the stock gained after second quarter results topped consensus.”
05. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders: 71
Share Price as of September 27: $21.9
AT&T Inc. (NYSE:T) is one of the largest telecommunications companies in the U.S., known for its expansive wireless and broadband services. The stock is currently trading under $50, making it an attractive option for value-oriented investors seeking stability and growth potential. As of the second quarter of 2024, AT&T had 71 hedge fund holders, up from 70 in the previous quarter, indicating increased institutional interest.
In its Q2 2024 earnings report, AT&T Inc. (NYSE:T) delivered solid results despite missing EPS expectations slightly at $0.57, compared to the expected $0.575. The company’s robust performance in key segments, such as Mobility and Consumer Wireline, showcases its strong fundamentals and strategic execution. For the quarter, AT&T reported 419,000 postpaid phone net additions, reflecting a 9 basis point decline in churn to 0.70%. Mobility service revenues grew by 3.4%, driven by improved pricing and a balanced go-to-market strategy. EBITDA in this segment rose by 5.3%, as the company converted over 85% of its service revenue growth into EBITDA.
In the Consumer Wireline segment, AT&T Inc. (NYSE:T) continues to gain momentum, adding 239,000 AT&T Fiber subscribers in Q2 2024. This marks the fourth consecutive quarter of positive broadband net additions, highlighting the company’s ability to attract and retain customers through its high-speed fiber offerings. Overall broadband revenues increased by 7%, supported by a significant 18% rise in fiber revenues. This growth has led to a 7.1% increase in Consumer Wireline EBITDA, as AT&T shifts from legacy copper networks to advanced broadband infrastructure.
The company’s strategic investments in 5G and fiber are paying off, as the convergence of these two segments drives overall growth. Nearly four out of every ten AT&T Fiber households also choose AT&T as their wireless provider, a testament to its success in bundling services. This integration is expected to enhance long-term profitability and increase returns on invested capital.
Additionally, AT&T Inc. (NYSE:T) is making progress in deleveraging its balance sheet, reducing net debt by $2 billion year-to-date. The company aims to achieve a net debt-to-adjusted EBITDA ratio of 2.5x by the first half of 2025, which should provide greater financial flexibility for sustained investments and shareholder returns. With strong fundamentals and a focus on profitable growth, AT&T Inc. (NYSE:T) remains a compelling stock under $50 to invest in now.
04. General Motors Company (NYSE:GM)
Number of Hedge Fund Holders: 72
Share Price as of September 27: $46.48
General Motors Company (NYSE:GM) is a leading American automotive manufacturer known for its robust lineup of vehicles under the Chevrolet, Buick, GMC, and Cadillac brands. The company reported strong financial results for the second quarter of 2024, with earnings per share (EPS) of $3.06, surpassing analyst expectations of $2.7. This performance was driven by increased demand for its vehicles, especially in the electric vehicle (EV) segment, and strategic cost management initiatives.
General Motors Company (NYSE:GM) has shown impressive growth in its EV portfolio, with U.S. EV deliveries increasing by 40% year-over-year, well above the industry growth rate of 11%. The launch of new models, such as the Chevrolet Equinox EV and the Cadillac LYRIQ, has contributed significantly to this growth. The company’s EV strategy aims to capture more market share by introducing models that cater to a broad spectrum of customers, including affordable EVs like the Chevrolet Bolt EV. Furthermore, General Motors Company (NYSE:GM) efforts to secure a partnership with Tesla for access to its charging network and the continued rollout of the IONNA fast charging venture are likely to strengthen its position in the EV market.
On the financial front, General Motors Company (NYSE:GM) reported revenues of $48 billion for Q2 2024, a 7% increase from the previous year, driven by stable pricing and higher wholesale volumes in North America. The company’s EBIT-adjusted margin stood at 9.3%, showcasing strong operational efficiency. Additionally, General Motors Company (NYSE:GM) adjusted automotive free cash flow was $5.3 billion, reflecting robust core performance and disciplined capital allocation. The company has also been actively repurchasing shares, retiring 22 million shares in the second quarter and projecting a total retirement of around 250 million shares under its ongoing stock buyback programs.
General Motors Company (NYSE:GM) strong financial position and its commitment to shareholder returns are evident, with a significant reduction in its outstanding share count. The number of hedge funds holding GM’s stock also increased to 78 in Q2 2024, compared to 72 in the previous quarter, indicating growing investor confidence. With continued focus on EV growth, strategic cost-cutting measures, and share buybacks, GM remains an attractive investment under $50 for those seeking exposure to the automotive sector’s transformation.
Diamond Hill Large Cap Concentrated Strategy stated the following regarding General Motors Company (NYSE:GM) in its Q2 2024 investor letter:
“Other top Q2 contributors included Extra Space Storage and General Motors Company (NYSE:GM). Shares of automobile manufacturer General Motors (GM) rose as its internal combustion engine business has also received a boost from the recent slowdown in electric vehicle adoption among consumers. GM also announced additional share repurchases in Q2, reinforcing its commitment to returning cash to shareholders.”
03. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 75
Share Price as of September 27: $23.91
Intel Corporation (NASDAQ:INTC) is a leading player in the semiconductor industry, known for its innovative technologies and robust product portfolio. Despite reporting earnings per share (EPS) of just $0.02 for Q2 2024, falling short of the expected $0.1008, the company is poised for significant long-term growth driven by strategic investments and operational efficiencies. The current number of hedge fund holders stands at 75 as of Q2 2024, slightly down from 77 in the previous quarter, reflecting a stable investor interest in the company amidst market volatility.
Intel Corporation (NASDAQ:INTC) management, led by CEO Pat Gelsinger, has outlined a proactive approach to improving profitability and capital efficiency. The company aims to achieve over $10 billion in cost savings by 2025 through a combination of operational adjustments and a significant reduction in spending, which is expected to lower operating expenses (OpEx) to approximately $20 billion in 2024. This cost-reduction strategy is vital as Intel transitions to a new operating model that separates financial reporting for its products and foundry services, allowing for greater transparency and focused resource allocation.
Moreover, Intel Corporation (NASDAQ:INTC) strategic investments in artificial intelligence (AI) and advanced semiconductor technologies position it well for future growth. The introduction of the AI PC category is set to accelerate market demand, with expectations that AI PCs will comprise more than 50% of the market by 2026. The upcoming launch of Panther Lake, Intel’s first client CPU using the 18A process, is anticipated to further enhance performance and profitability.
Financial metrics support a bullish outlook as well. Intel’s targeted capital expenditures (CapEx) for 2024 are expected to range between $25 billion and $27 billion, reflecting a 20% reduction from previous plans. This smart capital strategy will not only drive cost efficiencies but also pave the way for sustained growth in revenue and market share. Additionally, the anticipated launch of Xeon 6 and the innovative Gaudi 3 accelerator will strengthen Intel Corporation (NASDAQ:INTC) competitive position in the data center and AI markets.
In summary, while Intel’s short-term earnings miss may raise concerns, the company’s aggressive restructuring efforts, substantial cost-saving measures, and strategic focus on high-growth markets present a compelling investment case. The fundamentals of the business, coupled with a commitment to long-term shareholder value, indicate that Intel Corporation (NASDAQ:INTC) is well-positioned to navigate challenges and capture future opportunities.
02. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Holders: 84
Share Price as of September 27: $29.09
Pfizer Inc. (NYSE:PFE) is a global leader in the pharmaceutical industry, renowned for its commitment to developing innovative medicines and vaccines that address critical health needs. Pfizer Inc. (NYSE:PFE) has demonstrated strong performance in its recent Q2 2024 earnings call, reporting earnings per share (EPS) of $0.60, surpassing expectations of $0.458. This marks a pivotal moment for the company, as it achieves year-over-year revenue growth for the first time since Q4 2022, highlighting its recovery from the pandemic-induced peaks in COVID-related revenues. With a solid foundation built on a diverse product portfolio and strategic acquisitions, Pfizer is well-positioned to sustain this momentum.
The company continues to advance its strategic priorities, particularly in oncology, where it is integrating Seagen’s transformative antibody-drug conjugates (ADCs) to expand its offerings. The successful performance of key oncology products, including Padcev and Xtandi, is expected to drive revenue growth. Additionally, the FDA’s full approval of Tivdak and the approval of Talzenna in combination with Xtandi reinforce Pfizer’s commitment to providing innovative cancer treatments. This focus is underscored by Pfizer Inc. (NYSE:PFE) goal of delivering eight or more blockbuster medicines by 2030, a target supported by a robust pipeline that includes promising candidates for obesity treatment and next-generation vaccines.
Pfizer Inc. (NYSE:PFE) financial metrics are equally compelling. The company reported a healthy balance sheet with significant cash flow, allowing for sustained investments in R&D while maintaining a commitment to shareholder value through dividend growth. As of Q2 2024, there are 84 hedge fund holders of Pfizer Inc. (NYSE:PFE), an increase from 77 in the previous quarter, indicating growing institutional confidence in the stock.
With its strategic emphasis on expanding its oncology leadership, robust pipeline innovations, and commitment to shareholder returns, Pfizer Inc. (NYSE:PFE) presents a compelling investment opportunity. The company’s disciplined execution and strong financial performance suggest that it is well-equipped to navigate the evolving pharmaceutical landscape and capitalize on emerging market needs. Investors looking for stability combined with growth potential should consider adding Pfizer Inc. (NYSE:PFE) to their portfolios, especially as it remains undervalued under $50, making it one of the best stocks to invest in now.
01. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 92
Share Price as of September 27: $39.4
Bank of America Corporation (NYSE:BAC) is one of the largest financial institutions in the United States, providing a wide range of banking and financial services to individuals, businesses, and institutional clients. With a commitment to responsible growth and innovation, Bank of America Corporation (NYSE:BAC) has consistently demonstrated its ability to adapt and thrive in a dynamic economic environment.
In its Q2 2024 earnings report, Bank of America Corporation (NYSE:BAC) surpassed earnings expectations with an impressive earnings per share (EPS) of $0.83, exceeding the consensus estimate of $0.797. The bank generated a net income of $6.9 billion for the quarter, showcasing the strength and resilience of its diversified business model. Notably, the company’s revenues from non-interest sources grew significantly, with asset management fees up by 14% year-over-year and investment banking fees increasing by 29%. This robust performance is a testament to the bank’s focus on organic growth, customer engagement, and digital innovation.
The growth in customer accounts further underscores Bank of America Corporation (NYSE:BAC) successful strategy, as the bank added 278,000 net new checking accounts in Q2 alone, contributing to over 500,000 new accounts for the first half of 2024. This organic growth reflects the bank’s commitment to enhancing customer service and providing tailored financial solutions. Moreover, the strong performance in its wealth management division, coupled with the addition of over 6,100 new client relationships, positions Bank of America Corporation (NYSE:BAC) favorably in the competitive financial landscape.
Financially, the bank remains on solid ground with a common equity tier 1 (CET1) capital ratio of 11.9%, well above regulatory requirements. This capital strength allows for continued shareholder returns, evidenced by a $3.5 billion share repurchase program and an announced 8% increase in dividends, pending board approval. Additionally, Bank of America has gained traction among institutional investors, with 92 hedge fund holders as of Q2 2024, a notable increase from 82 in the previous quarter.
In summary, Bank of America Corporation (NYSE:BAC) strong financial metrics, diversified revenue streams, and commitment to innovation make it a compelling investment choice. With expectations for net interest income to stabilize and grow in the upcoming quarters, the bank is poised for sustainable long-term growth, making it one of the best stocks under $50 to invest in now.
While we acknowledge the potential of BAC to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than BAC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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