It’s not all doom and gloom in the stock market these days.
Several stocks have outperformed their respective sectors and the major stock indexes year-to-date. These winners tend to be stocks of companies that stand to benefit from the reopening of the U.S. and global economies following the Covid-19 pandemic.
While investors have to ferret out these successful stocks, they are out there and are delivering big returns to shareholders. And despite their impressive gains, many of these red hot stocks continue to trade for less than $50 a share, making them affordable to retail investors.
Here are 7 hot stocks to buy now for under $50.
- The Gap (NYSE:GPS)
- Wells Fargo (NYSE:WFC)
- New York Times (NYSE:NYT)
- American Airlines (NASDAQ:AAL)
- Molson Coors (NYSE:TAP)
- MGM Resorts (NYSE:MGM)
- Ford Motor (NYSE:F)
Let’s take a closer look.
Hot Stocks to Buy Now for Less Than $50: The Gap (GPS)
When it comes to hot stocks, few have been as hot as clothing retailer The Gap. The San Francisco-headquartered chain known for selling khakis and chinos has seen its stock nearly double year-to-date.
GPS stock is up 84% since the first trading day of 2021 and currently sits at $35.36. The Gap’s stock price has outperformed most other retailers and the major stock indexes by a wide margin and continues to trend higher as investors play the economic reopening trade.
GPS stock jumped 7% at the start of May amid signs that the entire retail sector was gathering strength. The company has also been getting a boost from the growth and expansion of its Athleta brand, which aims to take market share from Lululemon Athletica (NASDAQ:LULU). Gap recently announced that it is opening Athleta retail stores in Canada, its first foray outside the U.S., and has stated that its goal is to reach $2 billion in net sales annually from Athleta by 2023.
The company is scheduled to report first-quarter earnings on May 27. Better-than-expected results could send GPS stock even higher.
Wells Fargo (WFC)
Bank stocks have also been outperforming this year as the economy reopens and the prospect of higher interest rates loom on the horizon. And among bank stocks, Wells Fargo has been the clear standout, up 57% year-to-date at $46.53 a share. The turnaround in Wells Fargo is particularly sweet for shareholders given that the lender had been grappling with a major crisis even before the global pandemic caused an economic downturn last year.
In February 2020, just before Covid-19 upended the world economy, Wells Fargo was dealing with a fake account scandal that cost the bank $3 billion in legal settlements. This came after the bank was caught using widespread fraud to meet its sales goals. Their lenders opened millions of accounts in customers’ names without their knowledge, signed account holders up for credit cards, created fake identification numbers, forged signatures and even transferred customers’ money without their knowledge. As scandals go, it was a doozy.
But now, with the scandal and settlement behind it, Wells Fargo is once again in the good graces of investors and its share price is marching higher.
New York Times (NYT)
People who say traditional media is dead forgot to tell The New York Times Company. The publisher of the “paper of record” has been bucking the downturn in print media that has been accelerating over the past decade.
NYT has done so through a successful online subscription model and by diversifying into podcasts, video and other technologies that complement the reporting and writing that appear in its trademark newspaper and on its website.
When reporting its recent first-quarter earnings, The New York Times announced that it now has 100 million registered users and 7.8 million paid subscribers across digital and print products. The company has a goal of reaching 10 million paid subscribers by 2025.
Subscriptions have now replaced advertising as the main driver of the Times’ revenue growth, according to the company. Subscription revenue increased by 15.3% to $329.1 million in the first quarter of this year.
NYT stock has fallen 24% to $44.94 a share after reaching a 52-week high of $58.73 at the end of January. Investors should buy the dip before the stock rebounds higher.
American Airlines (AAL)
American Airlines reached a tipping point in its recovery from the global pandemic recently when it announced that it plans to resume hiring pilots for its commercial aircraft. The company announced that it will hire 300 pilots by the end of this year and double that to 600 new pilots in 2022.
The Fort Worth, Texas-based airline, which is the largest carrier in the world, employs about 15,000 pilots total. The reason for its new hiring spree is a recovery in travel demand that is growing in the U.S. and in many key foreign markets such as China and the United Kingdom.
American Airlines also recently announced that it plans to fly more than 90% of its 2019 domestic U.S. schedule this summer as more Americans get vaccinated against Covid-19 and the economy nears a full reopening.
That’s music to the ears of investors, who have been pushing the airline sector higher this year in anticipation of a return to pre-pandemic operations. AAL stock had jumped as much as 72% earlier this year, touching a high of $26.09 a share.
The stock has since come down to right around $22 per share. Investors should get in now before the next leg up.
Molson Coors (TAP)
Alcoholic beverage maker Molson Coors is one of the best reopening stocks any investor can have in their portfolio. TAP stock has been running hot this year as people anticipate demand for beer and other alcohol to spike as restaurants, sports stadiums and music concerts reopen. Since mid-February, Molson Coors stock has climbed 34% higher and now sits at $59.51 a share. While that’s higher than $50 per share, it’s only a little higher, and the stock has only been above the $50 threshold since April 9 with more gains likely in store.
The company, which owns popular beer brands such as Miller, Coors and Molson Canadian to name just a few, is already seeing its financial health improve as we come out of the pandemic. For this year’s first-quarter, Molson Coors reported earnings of $0.01 per share, a decline of 34 cents from a year earlier but much better than the loss of 12 cents a share that analysts expected in this year’s first quarter. The better than anticipated results have helped to keep TAP stock trending upwards, with a promise of brighter days ahead.
MGM Resorts (MGM)
Vegas, baby! Gambling is a popular pastime and casinos are popular travel destinations, and both should pick-up in coming months. This explains why shares of MGM Resorts are up 43% year-to-date but remain affordable at right around $40 per share. MGM, which operates casinos and entertainment properties in Las Vegas, Massachusetts, Detroit, Mississippi, Maryland and New Jersey, including marquee name such as the Bellagio, Mandalay Bay and MGM Grand, is poised to do brisk business once vacation and recreation travel gain traction in this year’s second half.
In addition to its physical casinos, which remain incredibly popular, MGM Resorts used the pandemic to beef-up its sports betting and online gaming business to the point where it is now viewed as a legitimate rival to sport betting sites such as Draftkings (NASDAQ:DKNG) and FanDuel.
Going forward, the twin focuses of its casino business and sports betting operations should help to buoy MGM Resorts business and stock.
Ford Motor (F)
Don’t give up on Ford. Not when its stock has finally experienced a breakout after flirting with penny stock territory for the better part of the past year.
Year-to-date, Ford stock is up 39% to $11.82 a share. And that’s after a recent pullback when the company announced that the global semiconductor shortage would continue impacting production of popular vehicles such as the Bronco SUV and Ranger pick-up truck.
However, the legendary Detroit automaker won’t let the global chip shortage stop its future plans. The company is proceeding to invest $185 million into a new battery lab as it moves to manufacture its own battery cells for future electric vehicles. The company also plans to build Ford Ion Park, a 200,000-square-foot production facility expected to open in Detroit by the end of 2022. Like other major automakers, Ford is all in on electric vehicles and the ascent of its share price this year reflects the company’s focus on an all electric future.
On the date of publication, Joel Baglole held a long position in DKNG.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.