The markets seem unconcerned with the novel coronavirus and 38 million unemployed. Of course, the markets are forward looking, so it’s not about now, it’s about a couple quarters from now. With this in mind, now is a great time to pick up some cheap stocks.
Think about it. Stocks seem to be holding up remarkably well, even in the face of a difficult recession. It’s like having more than a couple drinks and forgetting about the repercussions of getting up for work the next morning.
That’s why it’s always good to stick a few seedling companies in your portfolio — especially now. Cheap stocks tend to operate outside the world of institutionally held stocks and derive as much value from their potential as they do from their operations.
This puts these cheap stocks in a place where expectations are different. And we’re living in a different world right now.
Through my Portfolio Grader, which I use to spot Growth Investor plays, I have found seven great cheap stocks to buy now. They’re all strong stocks that have earned respect but are still just realizing their potential.
This newcomer to the biopharmaceutical scene has a number of drugs under development for immune disorders, fibrotic diseases and immuno-oncology.
It was founded by Samuel Waksal, former CEO of ImClone Systems, which was bought by Eli Lilly (NYSE:LLY) in 2008.
It has two drugs that are in a number of different trials. Kadmon also has Clovique, a chelating drug to treat Wilson’s disease, that it developed and markets currently. This is always good to see.
Developmental biotechs can be risky businesses when all their hopes are pinned on drugs going through trials. Drug trials are expensive, and funding them can be tough without a revenue stream.
With proven leadership, a drug already on the market and some strong candidates in Phase 2 trials, there’s some real potential here. And any good news may bring a suitor.
The stock is up 111% in the past year, and it has been treading water year-to-date.
This developmental biotech focuses on cancer drugs related to its specialty, antibody drug conjugates (ADC).
Basically, the goal is to take a cancer-killing toxin, and attach it to a specific ADC that degrades and allows the toxin to do its work.
IMGN has been around since 1981, so it has been able to generate revenue and please investors for a long time. It currently has two drugs in Phase 3 trials, two drugs in Phase 2 trials and another in Phase 1, with a few in some stages of preclinical trials.
It has generated revenue by developing partnerships with other biotechs, using its expertise to help develop novel drugs and treatments.
The company only has a market capitalization of $850 million, not quite as much as I’d want for my large-cap Growth Investor recommendations. So, it’s been patient and prudent in developing its drugs, given the fact that the average drug trial costs more than $2 billion these days.
The stock is up 146% in the past year, but hasn’t moved much year-to-date. That reflects a strong sector and broad buying supporting smaller biotechs as well.
This silver miner has been around since 1991. It is headquartered in Canada, but the company is run mostly out of China.
As a matter of fact, it’s the largest silver miner in China. This is an interesting way to invest in China yet avoid the Chinese exchanges.
Another interesting tidbit to bear in mind is the fact that over time, silver usually follows gold’s performance. Granted, silver is both an industrial and precious metal where gold is more a precious metal used as a store of value.
But silver’s utility can come in handy when precious metals prices are low. Yet when they’re high, like now, silver gets the benefits as well.
Also remember, mining stocks are leveraged to the price of the metal they mine. And when times are good, the miners are leveraged to the upside.
SVM is up 94% in the past 12 months, and that’s after taking a 30% hit year-to-date.
Next on my list of cheap stocks is Plug Power. This renewable energy company specializes in hydrogen fuel cells and has been around since the first wave of renewable tech hit the markets back in the late 1990s.
Hydrogen has always been a tempting alternative energy source since it’s wildly plentiful, being one of the original elements of the universe.
The goal has been to replace gas and electric vehicles in stationary power markets and in industrial transportation markets.
The challenge with broadening its base has always been finding a way to stabilize hydrogen. No doubt gasoline and natural gas are volatile substances, but hydrogen is also volatile — think the Hindenburg airship.
But new advances in hydrogen and fuel cell technology are making this fuel more realistic. Many car companies have hydrogen-powered vehicles and there a lot of forklifts and industrial equipment running on Plug Power fuel systems.
PLUG would be a winner in any green stimulus package as well. Frankly, so would electric vehicles, which increasingly rely on high-tech features powered by the 5G wireless revolution.
The stock is up 69% in the past year, 34% year to date.
This Canada-based gold mining stock has four operational mines on three continents and a number of ongoing advanced exploration projects as well. Its current mines are in Canada, Suriname, Mali and Burkina Faso.
This is certainly a good time to be a gold miner, and it makes Iamgold a great feature on this list of cheap stocks.
Last year, IAG produced 762,000 ounces of gold, which makes it mid-tier miner. If new mines come online in the coming months and years, that will help boost production. And this is a good time to make a move on that front since gold prices are high and rising. That means bigger margins for miners and more operating capital to sink into exploration.
IAG is up 55% in the past year and about even year-to-date. That means it still has good upside potential if gold continues its upward march.
This is the first semiconductor manufacturer in Taiwan, starting its business in 1980.
Over the years it has built clones and offshoots of U.S.-designed chips. Its first chip was a clone of a Motorola chip. Then a decade later, it was building an offshoot of Intel’s (NASDAQ:INTC) Intel 486.
While it’s no longer the biggest chip maker in Taiwan, it is still a player in wafers and integrated circuits that power a number of devices and equipment. That means UMC is a part of the broad tech trend that is going on around the world. And its access to Asian markets that are looking to step out of America’s shadow makes it an interesting pick.
UMC is up 22% in the past 12 months but it’s off 8% year to date. It also has a 2.6% dividend.
The last of my cheap stocks is Infinera. This isn’t a company you likely hear about much, but you use its products every day.
INFN provides the foundation for the biggest internet and telecom platforms in the business. It may only have 500 customers in 100 countries, but these are the big players. Nine of the top 10 Tier 1 operators and seven of the top 9 internet service providers use Infinera.
The company has proven itself in the most demanding environments with major enterprise customers in a highly complex and competitive market. And it’s been doing this for two decades.
The stock has sold off in the Covid-19 panic but its strategic position in the telecom market means it will have plenty of business as 5G re-emerges and infrastructure becomes a priority again.
Even after taking a 42% hit year-to-date, INFN is still up 47% in the past 12 months.
Soon, if they haven’t already, all these companies will get a nice “shot in the arm” from the huge infrastructure upgrade going on now worldwide.
Within two years, most cell phones will be 5G enabled and be able to wirelessly handle television streaming. With 5G, we’ll have cable modem speeds on any device; no need to plug in. That’s a big deal for rural areas … the very same areas that are also key to President Donald Trump’s reelection. So, by pushing 5G over the goal line, Trump will deliver a big win for his base — and strike a blow against Chinese rivals like Huawei Technologies.
But, in the big picture, 5G is about much more than trade wars and faster downloads. Because 5G is 100 times faster than 4G, it’ll allow your internet devices to work in real time. That advancement is a game changer for tech companies.
With the 5G infrastructure market set to grow at an annual rate of 67% over the next 10 years, the entire market will go from $780 million to nearly $48 billion. This buildout is where I see opportunity with 5G stocks now.
Cable companies can do their best to fight back with fiber optics … but they can’t compete with the convenience of a smartphone, once it’s got ultra-fast 5G. That’s how my 5G infrastructure play will capture more market share from the broadband cable companies.
The stock I’m targeting is enjoying an influx of big money on Wall Street, and it has strong fundamentals, too — making it an A-rated “Strong Buy” in my Portfolio Grader system.
When you do, you’ll see how to claim a free copy of my investment report, The King of 5G “Turbo Button” Technology, which has full details on this company — and what makes it such a great buy now.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.