It’s that time of year again! We are in a brand new year and have our resolutions ready. Whether they’re work-related or not, this will be a great opportunity to get organized for success in 2022. Additionally, if you haven’t done so already, now is the perfect time to update and reevaluate your financial plan. It will help ensure that all of your accumulated assets are well protected. One of the best ways to spruce up your portfolio is by investing in cheap stocks.
The stock market is volatile and if you own a bunch of high-flyers, there’s potential for big losses as well. You may find that it is difficult to stay composed when the market takes a sharp decline. It could be an opportunity for you, though. You can take profits and invest in cheap stocks that can stimulate excellent growth.
It is important to understand your personality as an investor. For example, some people are biased towards stocks that pay healthy dividends; others prefer companies with rapid growth rates because they believe this will yield them greater profits down the road — though there’s no guarantee, of course.
Both growth stocks and value investments can be successful if you take the time to examine your portfolio. It might be worth reevaluating what percentage each style gets to ensure that no single investment dominates all others.
Here are seven cheap stocks for your portfolio that also have excellent operating models:
- Victoria’s Secret (NYSE:VSCO)
- Ally Financial (NYSE:ALLY)
- Nexstar Media Group (NASDAQ:NXST)
- General Motors (NYSE:GM)
- Electronic Arts (NASDAQ:EA)
- Nokia (NYSE:NOK)
- CBRE Group (NYSE:CBRE)
Cheap Stocks to Buy: Victoria’s Secret (VSCO)
Victoria’s Secret is a global leader in women’s lingerie and sleepwear. They have their finger on the pulse of what consumers want to buy. They understand trends better than anyone — it just goes to show you don’t need expensive marketing campaigns or celebrity endorsements when people line up for miles outside store doors if your product speaks fashion language as theirs does.
The lingerie and beauty company is a rare, undervalued gem. It reported that top-line sales grew significantly during this period while updating guidance with an even more optimistic future outlook.
The company’s revenues for the three months ending Oct. 30 were $1.441 billion, up from last year’s figure of $1.35 billion. Victoria’s Secret has seen a drop in profits during the past quarter, with net revenues coming to $75 million this year compared to previous years’ total of around 143 million.
However, the markets reacted positively to the earnings report because of the updated guidance. They expect to have a revenue of $6.7 billion to $6.8 billion by the end of this year and it is likely that they will be able to exceed their full fiscal-year 2021 expectations.
Compared to 2020’s sales results, it represents an increase of approximately 25%. Supply chain issues will cost them, though. The company anticipates expenses of $150 million connected with these disruptions.
Ally Financial (ALLY)
In 1919, GMAC was first established as a division of General Motors. The original operation involved financing vehicles at dealerships and has continued through years of transformation into what it is now: an innovative digital financial services company that provides leading-edge technology to customers worldwide.
The company operates five business segments: automotive finance operations, insurance operations, mortgage financing service, and products for consumer loans; Dealer Financial Services, which offers credit training to dealerships and financial planning solutions.
The pandemic has dealt a tough hand, but with growing revenues and healthy cash balance, they’re showing their strength. With an attractive valuation for investors looking to capitalize on incoming interest rate hikes, these are all sure signs that Ally could be worth your time.
Ally’s market is highly competitive, but when you compare it with some of its peers in the industry that have a stronger return on equity and assets, for instance, Ally has an advantage. There is an opportunity to buy into rising interest rates with Ally. It trades at a significant discount compared to its peers, making it one of the best cheap stocks out there.
Cheap Stocks to Buy: Nexstar Broadcasting (NXST)
Nexstar Media Group is a company that owns and operates television stations in the United States. They are currently market leaders, with more than 50% share of all local broadcast media out there today, which could bring them higher advertising dollars if economic activity rebounds as expected due to their leadership position.
Nexstar Broadcasting’s recent non-political advertising revenue comes mainly from local businesses, an important source of income for the company. Selling ad time in these commercials generates a majority (70%) of Nexstar’s total advertising money.
The company’s total revenue gained 3.5% in the quarter, compared with a year ago, and it rose to $1.16 billion during that time frame, thanks mostly due to increased sales from new customers while retaining its old ones. Meanwhile, stronger-than-expected earnings per share numbers topped Wall Street analysts’ expectations. The company reported a 13% increase in distribution revenue. The $120 million political surges from last year’s quarter are excluded; station income grew 10%.
NewsNation, formerly WGN America, is now profitable. It was added to its portfolio as part of the Tribune Media purchase in 2019 and revamped last year. Discussion is now rife that another major acquisition is on the cards — the CW, a broadcast network that came into being after a tie-up between WB and UPN.
The company’s co-owners have rights for many important shows like “Riverdale,” “Walker,” and “Dynasty” that they can give away, giving Nexstar an edge in this growing market and making them one step ahead of other competitors.
Executives are confident that any supply-chain issues will not have a significant impact on our advertising results. COO Tom Carter was bullish about the media conglomerate’s outlook. “It won’t be back to 2019 levels just yet,” he stated, “but we continue to make progress.”
General Motors (GM)
America’s auto giant, General Motors, is an institution in the United States and abroad. On Sept. 3, 1893, William Durant founded it to produce cars for sale at his company “Buick Motor Company.” For much of the 20th century, the world’s largest automaker was General Motors. At its peak in 2007-2008, the company had a 50% market share within America — but even then, there were still many competitors who could take away your business if you weren’t careful enough.
GM owns four core automobile brands: Chevrolet, Buick, GMC, and Cadillac.
In recent years, GM has gone out of vogue. You can blame that on electric car stocks. They have taken the markets by storm, and it doesn’t look like the momentum is slowing. Tesla (NASDAQ:TSLA) is the world’s favorite electric vehicle (EV) brand, with many customers switching to this company from other brands. Other major companies in the space include Nio (NYSE:NIO), XPeng (NYSE:XPEV), and Li Auto (NASDAQ:LI).
GM is not resting on her haunches, though. It is looking to launch at least 30 EVs by 2025. GM expects its revenue from electric vehicles to reach about $90 billion annually by 2030. This increase is due largely to the company’s new models set for release over this period.
GM looks like a great stock for your portfolio, considering its rich history, strong fundamentals, and excellent outlook. GM stock is practically a steal at just 9.9 times forward price-to-earnings.
Cheap Stocks to Buy: Electronic Arts (EA)
Electronic Arts, the world-renowned video game producer, and publisher are known for its successful line of sports games. It is one of the biggest gaming companies in America and Europe. Games developed and published by Electronic Arts include popular franchises such as Battlefield, Need for Speed, or The Sims. They also publish games under the EA Sports titles like FIFA, NBA Live, and EA Sports UFC.
During the pandemic, with little to do, people pivoted towards playing video games. Against this backdrop, EA was bound to do well. Throughout this period, earnings remained strong. However, now that things are back to normal, investors fear Electronic Arts’ short-term future. Recent ticket sales for blockbusters like ‘Spider-Man: No Way Home‘ and the latest James Bond outing ‘No Time To Die‘ alongside the massive bookings we see in the cruise line industry indicate that pent-up demand for the in-person experience is high.
However, these are all external factors. On the company front, EA is doing well. In November, the video game company reported its third-quarter FY22 results, which surpassed analyst estimates. Net bookings for the quarter accelerated to more than twice last year’s figure of around $910 million. The company’s bottom-line was $1.58 per share, which is an increase from last year’s quarter when they reported only five cents per share earnings.
EA upped its full fiscal year guidance for revenue to be approximately $7.6 billion compared to a prior estimate of $7.4 billion. Adjusted EPS is expected to be about $6.95, up from $6.40 previously.
While EA stock may see lower levels in the near term, there’s still a lot of growth potential, and we think it will be worth your time to buy when prices dip. Growth in gaming is a secular trend. It will not change anytime soon.
The world is going to change drastically due to 5G. It will make our lives much easier by giving us more access at a lower cost across all platforms.
Considering the future of 5G and its applications in every field, investors are flocking to this new space. That leads to astronomical valuations. However, one 5G play is trading at an excellent discount, Nokia. It is still mostly known for losing the mobile phone race to Apple (NASDAQ:AAPL). But in the last few years, it has managed to carve out a niche for itself as a 5G infrastructure company. In its latest iteration, the company is a roaring success. With each passing month, it stitches together new contracts worldwide.
In particular, the frosting of relations between Huawei and the Western world is helping Nokia gain market share. It was getting several contracts in Europe and inked an agreement in Taiwan. Last year was particularly interesting because Nokia won its first contract in China. It’s a hard market to crack, and management deserves credit for clinching the win.
Interestingly, despite all these positives, Nokia is not trading at exceptional price multiples. Last year, it became one of the many meme stocks out there. Still, despite the occasional blip, Nokia is incredibly cheap and one of the best 5G stocks out there.
Cheap Stocks to Buy: CBRE Group (CBRE)
CBRE focuses on providing services for real estate investors and occupiers such as capital markets-related activities like property leasing or investment management; it also offers valuation and development expertise to its clients through these various affiliates.
CBRE Group has 2020 revenues of $23 billion with more than $133 billion in assets under management. The company’s diverse portfolio ranges from office buildings to retail properties; they also offer property management services globally for small business owners.
With the world struggling to recover from a pandemic, CBRE reported earnings nearly double what they were last year in their latest quarter. This is an encouraging sign for investors who want their money going towards companies that will be around no matter what happens in this tough economic climate. Revenue increased 20% to approximately $6.8 billion.
Leasing revenue in all three regions reached new heights this quarter, with an especially notable rise across Asia-Pacific. Europe also saw a significant jump up 20% from last year’s levels, while the Middle East and Africa saw leasing grow by 11%. The Americas were still below pre-pandemic levels but still managed to show growth of 4%.
Considering these strong numbers, it’s no wonder that CBRE is one of the best cheap stocks at the moment.
On the publication date, Faizan Farooque 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.
Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. You can check out his analysis on InvestorPlace and TipRanks.