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4 Cheap Stocks That Wall Street Analysts Love

  • Here are four cheap stocks to consider now after the selloff in the U.S. stock market intensified in April.
  • HIVE Blockchain Technologies (HIVE): If you are looking for profits in the cryptocurrency mining business, this company turned profitable in 2021.
  • Obsidian Energy (OBE): This company can benefit from high energy prices during 2022.
  • Digital Ally (DGLY): Explosive sales growth in 2021 turned this company profitable.
  • Mizuho Financial Group (MFG): This bank has an attractive dividend yield of more than 5% and is expanding in the U.S. market.
Pennies in a jar on top of a background of pennies. Pennies. Cheap stocks.

Source: John Brueske / Shutterstock

In the first four months of 2022, the U.S. stock market has been under severe selling pressure. All major stock indexes have taken considerable losses. As of Apr. 20, 2022, the S&P 500 Index has losses of 13.31% year-to-date (YTD). Searching for cheap stocks now makes sense as many equities have been beaten down.

Stock investing should be more than just buying low to sell high. It should be finding high-quality cheap stocks that have significant upside potential and can compensate investors for the risks in the equity markets that are elevated due to high inflation and rising interest rates. I have complied a list of four stocks I believe can live up to this criteria. Analysts are bullish on these stocks and believe they have plenty of upside potential.

A cheap stock should not be considered solely for its stock price. Its intrinsic value should also be considered. What is cheap in stock investing can become much cheaper amid a broader stock market selloff. When the dust settles, however, the following cheap stocks have solid reasons, like being undervalued, to consider them for further analysis.

Here are the top four cheap stocks that analysts love right now:

HIVE HIVE Blockchain Technologies Ltd. $1.55
OBE Obsidian Energy Ltd. $8.41
DGLY Digital Ally, Inc. $1.16
MFG Mizuho Financial Group, Inc. $2.40

Cheap Stocks: HIVE Blockchain Technologies (HIVE)

HIVE Blockchain Technologies logo over a map of the world. HIVE stock.

Source: karnoff / Shutterstock

Shares of HIVE Blockchain Technologies (NASDAQ:HIVE) currently stand at $1.55 per share, having losses of nearly 21% year-to-date. With a price-to-earnings (PE) ratio trailing twelve-months (TTM) of 3.97, HIVE stock is cheap. However, this bitcoin mining company achieved two milestones in 2021. It turned profitable with a net income of $56.24 million and reported a surge in sales growth of 126.76% to $88.18 million.

HIVE Blockchain Technologies is a bet on the future of popular digital currencies, such as Ethereum (ETH-USD) and Bitcoin (BTC-USD). It seems it has found a way to control the high costs associated with operating a digital mining business and make a profit.

Analysts expect HIVE stock to reach a median value of $2.89 over the next 12 months, representing a 91% upside potential.

The prices of Ethereum and Bitcoin are volatile. This is fully reflected in the Beta (5Y Monthly) of 5.32 for the stock, which is very high and is indicative of the high risk and the potential high return. Unfortunately, in the event of a weak cryptocurrency market, further losses for the stock are very likely.

Obsidian Energy (OBE)

a bunch of oil barrels are stacked high

Source: Shutterstock

Obsidian Energy (NYSEAMERICAN:OBE) is a company engaging in the exploration, production, and development of oil and natural gas properties in Western Canada has a PE ratio (TTM) of 2.07.

This is a play on the rising and sustainable energy prices. Oil and gas has rallied in 2022 amid a combination of geopolitical risks, like the war in Ukraine and harsh weather conditions during winter. The rally in energy prices has been reflected in the OBE stock price, which has gains of 107% YTD. Sales growth in 2021 increased 64.55% to $448.9 million and the firm turned profitable with a net income of $414 million. This is compared to a loss of 771.7 million in 2020. Free cash flow was strong in 2021, coming in at $57.7 million. That represents an increase of 159.91% compared to free cash flow of $22.2 million in 2020.

Even with the increase of more than 100% YTD, OBE stock has a median price target of $11.30 which represents upside potential of 31.9%.

Cheap Stocks: Digital Ally (DGLY)

Digital Ally logo on a phone screen over a hot pink background. DGLY stock.

Source: rafapress / Shutterstock

Digital Ally (NASDAQ:DGLY) engages in the design, manufacture, and sale of digital audio, video recording, and speed detection devices. It is included in this list of cheap stocks not just based on its price of $1.16 or for its PE Ratio (TTM) of 2.12.

A low PE ratio by itself is not enough to favor a stock. However, in the case of Digital Ally, there are key positive factors. First, the company reported explosive sales growth of 103.65% in 2021 to $21.41 million compared to revenue of $10.51 million in 2020. Second, it had a surge of net income growth of 1,070.13% to $25.47 million.

The net margin of 118.97% for 2020 and return on equity of 72.61% are very strong, showing improvements over the past three consecutive years. This reflects momentum in the business operations performance.

Analysts have a median price target of $2.75 for DGLY stock, signaling an upside potential of 137.1%.

Mizuho Financial Group (MFG)

Mizuho Financial Group building in Kobe, Japan. MFG stock.

Source: TK Kurikawa / Shutterstock

Mizuho Financial Group (NYSE:MFG) operates in banking, trust, securities, and other financial services in Japan, the Americas, Europe, Asia and Oceania, and more. MFG stock stands at $2.40 per share today and it is the only cheap stock on this list that offers a dividend. The forward dividend and yield of 14 cents and 5.74%, respectively, are very attractive given that the PE ratio (TTM) is 6.64.

The company has recently announced it is seeking opportunities for expansion in the U.S. capital markets, which should strengthen the business operations and the ability to generate more net interest income. MFG stock has a price/earnings-to-growth (PEG) ratio of 0.73, another indication of a very cheap stock. Analysts have a median price target of $2.98, which represents an upside potential of 24.3%.

The firm has reported increased revenue and earnings per share for the past two consecutive years. This is very positive despite its low stock price. Mizuho Financial Group is a large and mature company with a market capitalization of $30.93 billion.

On the date of publication, Stavros Georgiadis, CFA  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.

Stavros Georgiadis is a CFA charter holder, an Equity Research Analyst, and an Economist. He focuses on U.S. stocks and has his own stock market blog at thestockmarketontheinternet.com. He has written in the past various articles for other publications and can be reached on Twitter and on LinkedIn.


Article printed from InvestorPlace Media, https://investorplace.com/2022/05/4-cheap-stocks-that-wall-street-analysts-love/.

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