With the month of July right around the corner, it might be a good time to consider cheap stocks to buy. According to the Stock Trader’s Almanac (2018 edition), July features relatively strong returns, especially compared to the preceding two months. Therefore, loading up on some speculative, lower-priced names could churn out robust returns.
Before we explore the topic any further, I will remind readers that generally speaking, financial experts eschew cheap stocks to buy for more dependable fare. Primarily, you’ll hear this objection: cheap equities are that way for a reason. Admittedly, this criticism has much validity. Also, they tend to be more volatile due to their fundamentally unpredictable nature.
Nevertheless, if you can overcome these and many other objections, you may find that earmarking a small portion of your portfolio to cheap stocks makes sense. For one thing, you’re dealing with the law of small numbers. Basically, moving a high-priced, high-volume security takes much more “energy” than a lower-priced, lower-volume equity unit. Bank on the right one and you can enjoy outsized returns.
Plus, I look at it this way. If you have a few hundred bucks to spare, most people will spend it on consumable products or services. Why not put that money instead to work? Maybe you’ll lose it. But maybe, you’ll enjoy a nice bump up in your portfolio. Here are cheap stocks to consider acquiring in July.
- Infosys (NYSE:INFY)
- UP Fintech (NASDAQ:TIGR)
- Cinemark (NYSE:CNK)
- Nautilus (NYSE:NLS)
- Qurate Retail (NASDAQ:QRTEA)
- Evofem Biosciences (NASDAQ:EVFM)
- Ayro (NASDAQ:AYRO)
Recently, I’ve received positive feedback for my articles on InvestorPlace and other platforms for which I write. Thank you. But I also want to encourage you that before you pull the trigger, to please perform your due diligence. Don’t let me or anyone else convince you — ultimately, you should be the one convincing yourself. And with that, let’s dive into some cheap stocks to buy.
Initially, Infosys might seem like a tad too much on the risky spectrum regarding cheap stocks to buy. Headquartered in Bengaluru, India, Infosys’ home nation suffered badly from a sharp rise of novel coronavirus infections. Currently, medical experts worry about a new variant called Delta Plus, which is spreading rapidly in India, along with the U.K. and the U.S., among several others.
While I don’t want to make too much about this headwind, I also don’t want to ignore it. Therefore, you should assess the situation before jumping aboard INFY stock.
According to a survey that the company conducted with Interbrand, data breaches could potentially risk up to $223 billion in value of the world’s top 100 brands. Further, that risk has presumably only increased because of the Covid-19 pandemic forcing employees of major corporations to operate remotely. This of course spreads the surface area of potential data breach exposure.
Therefore, it’s likely that enterprise-level clients will boost demand for Infosys’ cybersecurity business, along with other divisions under its corporate umbrella. Sure enough, investors are seeing the value of INFY stock, moving shares up over 10% during the trailing one-month period.
UP Fintech (TIGR)
Known as “Tiger Brokers” in Asia — hence the ticker name — UP Fintech is a leading online brokerage firm focusing on global investors. According to its website, Up features a proprietary mobile and online trading platform, which “enables investors to trade in equities and other financial instruments on multiple exchanges around the world.”
One of the bigger picture reasons why TIGR stock could perform well relative to say domestic-based cheap stocks to buy is the orderly culture in Asian countries. According to Winnie Chwang, portfolio manager at fund manager Matthews Asia:
Asia’s ability to manage the virus helps [by providing] increased certainty from an earnings outlook perspective… The growth profiles of countries in Asia, such as China, continue to stand out as attractive opportunities.
Also, the base of opportunities have increased recently. As Nikkei Asia reported, “Feeding their appetite for shares, a total of 855 companies went public in Asia in 2020, raising a total of $112 billion, up 69% from the previous year, according to data from Refinitiv. Chinese companies accounted for 82% of the total.”
While TIGR stock is already up nearly 213% year-to-date, there could be more room to run as equities trading in Asia increases in scope, particularly in the continent’s emerging markets.
In my view, the narrative for Cinemark is both compelling and contentious. As you’re well aware, the Covid-19 crisis devastated industries and at times, brought out the worst in people. Thus, the idea of bringing people back together in close quarters seems risky at best. You only need to look at the rise of air rage as reported by the Boston Globe and other media outlets to appreciate the skepticism.
On the positive end of the debate is the concept of retail revenge. Here’s the basic rundown. For a little over one year, the pandemic forced people to avoid or cancel vacations and spend money on the products and services they wanted. Instead, they had to stock up on food, guns and toilet paper. Now that Covid is fading, consumers are ready to get back to the things they love.
One of those activities happens to be watching movies — particularly big summer blockbusters. Therefore, the current price point of CNK stock is attractive. True, streaming services have over the years stolen market share. But likely, Americans missed the box office experience for new releases so we could see a resurgence toward cheap stocks levered to the cineplex industry.
I’ve got to be honest: I’m not the biggest fan of Nautilus, especially in light of the competition from Peloton Interactive (NASDAQ:PTON). But the thing is, PTON isn’t one of the cheap stocks to buy, not when it soared to triple digits during the year of Covid. On the other hand, NLS stock is still under $20, even though Nautilus shares enjoyed the greater magnitude leap from their respective pandemic lows.
However, the headwind for both is that society is returning to normal. Up until a few months ago, I would always check the Centers for Disease Control and Prevention’s website regarding new coronavirus cases. Now, it seems rather pointless considering how low infection rates have fallen. And this means people will be out and about, exercising both outdoors and in fitness centers.
To me, it seems that NLS stock would benefit most strongly from a cynical argument. If the Delta Plus variant sparks another wave of infections, I would expect shares to soar again. My not-quite-six-pack gut tells me this is unlikely. So, is there another reason to buy Nautilus?
It’s possible that Covid could cause shifts in social behavior that might favor more introverted or insular activities such as home gym equipment. But this is speculation at best so bet on NLS extremely carefully.
Qurate Retail (QRTEA)
Perhaps best known for providing an alternative shopping experience, Qurate Retail represents per its website, “seven leading retail brands, reaching approximately 218 million homes worldwide via 14 television networks and reaching millions more via multiple streaming services, social pages, mobile apps, websites, print catalogs, and in-store destinations.”
Ultimately, Qurate’s aim is to “combine the best of retail, media, and social to curate experiences, conversations, and communities for millions of highly discerning shoppers.” Frankly, I was never really good at interpreting corporate speak. To me, the description seems to come from the Jordan Peterson school of verbosity over profundity, but I digress.
The primary takeaway for QRTEA stock is the aforementioned concept of retail revenge. With the pandemic denying Americans from doing and buying what they want, we can expect a rising-tide-lifting-all-boats dynamic for Qurate.
Also, the governmental response to the American public was unprecedented. From the federal bolstering of state unemployment programs to direct stimulus checks (thanks to the efforts of both the Trump and Biden administrations, I might add), the consumer has the money to act on their vengeful sentiment. QRTEA is risky, no doubt but it’s worth considering for cheap stocks if you can handle it.
Evofem Biosciences (EVFM)
For the next two cheap stocks on this list, I’m going to dive into the extremely speculative side of the spectrum. Therefore, only consider these names if you’re prepared to lose everything you put into them. First up is Evofem Biosciences.
As you might guess from its name, Evofem centers on women’s health, particularly issues regarding intimacy and reproductive health. The company’s main goal is to put women in the driver’s seat regarding contraception and protection from infections related to intimacy.
Evofem’s flagship product is Phexxi, which is approved by the Food and Drug Administration and is the first and only hormone-free prescription contraceptive “privacy” gel. As well, the company has several products in development, including EVO100, which is another privacy gel designed to reduce chlamydia and gonorrhea in women.
You can read more about the products in the link provided above. I just can’t go into details lest I spook the algorithms into thinking I’m writing about something that I’m not.
Anyways, EVFM stock appears to have potential as one of the social-media-driven cheap stocks to buy. Over the trailing month, shares have skyrocketed over 46%. And in February of this year, EVFM closed at just under $5.
I’ve got to be upfront about Ayro. Last year, I considered AYRO to be one of the cheap stocks to avoid, mainly because of the devastation of Covid-19. Specializing in light-duty, zero-emissions electric vehicles, they represent perfect platforms for college, corporate and government campuses. Small enough to fit into tight spaces while offering the capacity to carry people and equipment, these EVs are incredibly useful.
But the problem last year was that it was anybody’s guess how the pandemic would play out. Due to concerns about spreading infections, most academic institutions shut down, cutting off a viable revenue channel. In addition, restrictions from students hailing from other countries added pressure to AYRO stock.
And let’s be real — many universities depend on the gold mine that is Chinese students. With the Pew Research Center noting soaring anti-China sentiment, it will take time for America’s education system to entice students from there.
Still, with Covid-19 cases fading and temperatures gradually declining, the possibility of a recovery is real. Therefore, if you really want to gamble, AYRO just might be the ticket.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.