- Steep market corrections offer opportune entry points for investors searching some of the best cheap stocks.
- Alpha and Omega Semiconductor (AOSL): The chipmaker saw 28% annual revenue growth in the computer segment.
- Bark (BARK): Its Barkbox service continues to add subscribers and generate reliable recurring revenue.
- BioNTech (BNTX): Anticipates generating significant Covid-19 vaccine-related revenue for fiscal 2022.
- Daqo New Energy (DQ): Grew top line by 400% year-over-year thanks to a booming solar photovoltaic market.
- Hudson Technologies (HDSN): Gross margin doubled to 54% in the first quarter, reflecting the continued increase in the price of certain refrigerants.
- Nokia (NOK): Is set to launch its 5G networks in India over the next few years.
- Sundial Growers (SNDL): Shareholders will most likely vote for a reverse stock split in the June meeting.
Major market sell-offs offer investors the opportunity to search for the best cheap stocks. After all, it’s every investor’s dream to buy high-quality stocks at bargain prices.
As recession fears continue to drive the stock market lower, plenty of shares have been crushed by the market. Many of these cheap stocks can potentially add long-term value to investor portfolios.
The benchmark S&P 500 index has fallen more than 18% year-to-date (YTD), and the Dow Jones Industrial Average index has dropped 14% during the same period. And with more interest rate hikes on the horizon, the correction is not likely to end just yet.
While some cheap stocks may raise question marks regarding their balance sheets or full-year forecasts, they also tend to offer upside potential if they can turn their operations around.
With that information, here are the seven best cheap stocks that deserve your attention in June:
|AOSL||Alpha and Omega Semiconductor||$37.24|
|DQ||Daqo New Energy||$44.11|
Alpha and Omega Semiconductor (AOSL)
52-week range: $23.66 – $69.99
First on my list of best cheap stocks is Alpha and Omega Semiconductor (NASDAQ:AOSL) designs power semiconductor products used in high-volume applications, such as flat-panel TVs, computers, smartphones, and telecommunications equipment.
The semiconductor company released third-quarter results on May 5. Revenue grew 20.1% year-over-year (YOY) to $203.2 million. Adjusted income stood at a record $1.34 per diluted share, up 74% from a year ago. Cash and equivalents ended the period at $323.1 million.
Revenue in the computing segment soared 28% YOY and accounted for 44% of total revenue. The increase was driven by continued strength in the notebooks segment. Yet, Alpha and Omega Semiconductor decreased its fourth-quarter revenue guidance to $190 million because of the suspension of production at its Shanghai packaging and testing facilities due to the Covid-19 lockdown.
So far in 2022, AOSL stock has lost a third of its value. Shares are trading at just 8 times forward earnings and 1.47 times sales, nearly half the industry average. The 12-month median price forecast for AOSL stock stands at $62.
52-week range: $2.12 – $13.57
On Feb. 10, Bark issued Q3 results. Revenue increased 33.9% YOY to $140.8 million. Adjusted net loss stood at 12 cents per share, compared to 43 cents a year ago. Cash and equivalents ended the year at $228.7 million.
The Barkbox service has added roughly 371,000 active subscriptions during the quarter, bringing the total to 2.3 million. As a result, it generates reliable recurring revenue for the pet company.
Yet, in 2022, BARK stock has tumbled more than 43% and trades near 52-week lows. Shares are changing hands at only 1.8 times book value. The 12-month median price forecast for BARK stock is at $12.
52-week range: $121.32 – $464.00
The leading immunotherapy company BioNTech (NASDAQ:BNTX) focuses on developing mRNA therapeutics and vaccines. The company, which has a significant partnership with Pfizer (NYSE:PFE), rose to prominence during the pandemic thanks to its Covid-19 vaccine.
The biotech group also collaborates with Pfizer on a shingles vaccine. Management is set to launch trials for malaria and tuberculosis vaccines as well.
BioNTech announced Q1 results on May 9. Revenue increased 211% YOY to 6.37 billion euros, driven by sales of its Covid-19 vaccine. Diluted earnings per share skyrocketed to 14.24 euros, up from 4.39 euros in the prior-year period. Cash and equivalents ended the period at 6.16 billion euros.
Meanwhile, the German government has a supply deal for 600 million doses of its Covid-19 vaccine. For fiscal 2022, management expects vaccine-related revenue of 13 billion to 17 billion euros.
Like many other biotech names, BNTX stock has fallen 30% YTD. Shares are trading at 4.2 times forward earnings and only 1.7 times sales. At present, the 12-month median price forecast for Biontech stock stands at $246.57.
Daqo New Energy (DQ)
52-week range: $32.20 – $90.48
Daqo New Energy (NYSE:DQ) produces high-purity polysilicon, the main conducting component in solar products. It sells polysilicon to photovoltaic (PV) product manufacturers.
China-based Daqo released Q1 results on April 21. Revenue surged 400% YOY to $1.28 billion. Adjusted earnings per diluted American Depositary Share (ADS) came in at $6.99, compared to $1.08 in the prior-year quarter. Cash and equivalents ended the period at $1.13 billion.
Polysilicon sales volume in the quarter skyrocketed to 38,839 metric tons, compared to 11,642 in the previous quarter. Continued growth in the global solar energy market is leading to surging polysilicon demand.
According to a recent report, the global solar photovoltaic market is expected to grow at a compound annual growth rate (CAGR) of 13.78% until 2026. Therefore, we can expect Daqo to benefit from this increase.
Unlike many other Chinese stocks, DQ stock has appreciated 17% YTD. Yet shares still look undervalued at just 1.9 times forward earnings and 1.3 times sales. The 12-month median price forecast for Daqo stock is at $63.00.
Hudson Technologies (HDSN)
52-week range: $2.00 – $10.17
Hudson Technologies (NASDAQ:HDSN) develops products used in commercial air conditioning, refrigeration, and processing systems. Its products and services include refrigerant and industrial gases and refrigerant management.
The company issued Q1 metrics on May 4. Revenue increased 149% YOY to $84.3 million. Net income came in at 63 cents per diluted share, compared to a net loss of 2 cents in the prior-year period. Cash and equivalents ended the period at $5.15 million.
Hudson’s management expects to lead the transition to more environmentally-friendly refrigerants. As climate-damaging hydrofluorocarbon production is phased out, Hudson is well-positioned to fill the anticipated supply gap with its reclamation capabilities and robust distribution network.
So far in 2022, HDSN stock has surged higher by 105%. Despite the eye-popping increase, shares have a reasonable valuation at 6.9 times forward earnings and 1.9 times sales. The 12-month median price forecast for Hudson Technologies stock stands at $10. This makes it one of the best cheap stocks you can get today!
52-week range: $4.51 – $6.40
Nokia (NYSE:NOK) is a networking equipment vendor that has evolved into a leading mobile infrastructure provider and 5G play over the past decade. It now has around a 20% market share in the global telecom equipment market.
Finland-based Nokia announced in late April. Revenue increased 5.3% YOY to 5.35 billion euros, boosted by growing demand for 5G equipment. Diluted EPS came in at 4 euro cents, down from 5 euro cents a year ago. Cash and equivalents ended the period at 6.34 billion euros.
Network infrastructure grew 9% in constant currency in the first quarter. Nokia boasts over 200 5G commercial contracts. In 2022, management anticipates net sales of 22.9 billion to 24.1 billion euros on a constant currency basis.
However, NOK stock has lost around 23% YTD. Shares are trading at relatively bargain levels among its peers at 11.2 times forward earnings and just 1.2 times sales. At present, the 12-month median price forecast for Nokia stock is at $6.44.
Sundial Growers (SNDL)
52-week range: $0.34 – $1.49
As a result, Sundial has shifted focus to cannabis retail stores. For instance, in late March, Sundial acquired Alcanna, creating the largest private-sector cannabis and liquor retail network in Canada with 354 retail locations.
The Canadian company released Q1 results on May 17. Net revenue, including one day of revenue on the acquisition of Alcanna, grew 78% YOY to 17.6 million Canadian dollars. Net loss decreased to 38 million Canadian dollars from a net loss of 134.4 million a year ago.
SNDL stock has dropped 33% YTD. Despite the decline, shares are trading at 53 times forward earnings and 17.5 times sales. Finally, the 12-month median price forecast for Sundial Growers stock stands at $0.50.
On the date of publication, Tezcan Gecgil 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.
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