Although crimson seems to be the shade of the moment in the equities sector, by targeting under-$50 stocks to buy, astute and daring investors may be able to tap into a hidden bull market. How can this be? Really, it comes down to simple math.
Depending on your sources, retail investors enjoy access to approximately 6,000 securities listed on the New York Stock Exchange and the Nasdaq. The harsh reality, then, is that investors can’t be everywhere all at once. Moreover, with phenomena like meme trading funneling a concentration of dollars into narrow windows, coverage gaps invariably materialize. Therefore, hidden bull markets may exist in the category of under-$50 stocks to buy.
It’s just like sports. Some players receive far more hype than they’re worth. However, other players receive little love. Maybe they’re competing with a bad team or operate in underutilized roles. Whatever the case, deltas in value arise, opening doors for contrarian investors.
Below are some intriguing ideas for under-$50 stocks to buy that popped up on the radar.
|BAC||Bank of America||$30.94|
A British multinational consumer goods company, Unilever (NYSE:UL) covers multiple necessities, such as food, condiments and personal/beauty care. Some of the company’s most popular brands include Ben & Jerry’s ice cream, Dove personal care products and Hellman’s condiments. The company is one of the biggest blue chips in the world, levering a market capitalization of nearly $110 billion.
Nevertheless, Wall Street doesn’t currently recognize UL as one of the best under-$50 stocks to buy. Sure, it’s priced at under $44, numerically qualifying UL for the status. However, through the close of the Oct. 6 session, Unilever shares declined by 19% on a year-to-date (YTD) basis. That might be overdoing it considering how the company caters to consumer staples demand.
Moreover, Gurufocus.com labels UL as modestly undervalued. Relative to its underlying industry, Unilever enjoys strong growth metrics. For instance, its three-year book growth rate stands at 13.3%, ranking higher than 75% of its peers. Also, Unilever’s return on equity pings as 32%, far higher than the industry median’s 6.7%.
A French multinational pharmaceutical and healthcare company, Sanofi (NASDAQ:SNY) specializes in providing potentially life-changing treatments and the protection of life-saving vaccines to millions of people, per its website. Recently, Sanofi inked a partnership with clinical study tech firm TrialSpark. The collaborative effort centers on leveraging novel methods to help identify and bring new drugs to market.
Despite its myriad relevancies and upside potential, Wall Street presently doesn’t care for SNY stock. Since the start of this year, SNY has slipped more than 22%. The trailing half-year period has been worse, with the equity value down 27%. However, it’s also possible that as the panic in the market fades, investors will wake up to certain realities. In particular, Sanofi is rated as modestly undervalued.
Overall, the pharmaceutical giant features decent strengths in the balance sheet. While it could use some improvement in the growth department, Sanofi is steadily making progress, particularly with its second quarter of 2022 results. Most importantly, the company enjoys robust profitability metrics, specifically its net margin of 15.8%. This rates higher than nearly 83% of the drug manufacturing industry.
If one word exists to characterize the mentioning of aerospace specialist Airbus (OTCMKTS:EADSY) on this list, it would be opportunistic. Earlier, Airbus rival Boeing (NYSE:BA) generated headlines but for the wrong reasons. Facing legislative consequences for two fatal crashes involving the 737 Max 8 jetliner, Boeing must receive regulatory approval for two of its newest 737 variants.
Unfortunately, the Federal Aviation Administration (FAA) sounded the alarm, warning that Boeing might not hit the buzzer in time. And that would mean higher costs and delays for Boeing as it would then fall under certain safety certification requirements. It’s a mess, but it might work out cynically for the Netherlands-based Airbus.
Still, EADSY will be challenging. Since the January opener, shares slipped almost 30%. However, the positive angle fundamentally is that Airbus’ business is modestly undervalued. Admittedly, the company’s weakness stems from a need to improve longer-term growth trajectories. However, Airbus enjoys a return on equity of over 41%. In comparison, the industry median sits at 4.5%. Thus, EADSY may be one of the best under-$50 stocks to buy.
Bank of America (BAC)
To appreciate the narrative for Bank of America (NYSE:BAC) as it pertains to under-$50 stocks to buy, one must have a contrarian mindset. Not only that, but prospective market participants must also be incredibly patient. During the boom time of 2021, the Federal Reserve helped to undergird speculative investments through dovish monetary policies. However, as inflation cracked the economy, the Fed pivoted to a hawkish stance.
Theoretically, this dynamic should lift BAC and its ilk because of higher borrowing costs (i.e., greater profitability for lenders). Unfortunately, an aggressively hawkish Fed can also spark a recession. So, the angle that could make BofA one of the under-$50 stocks to buy is deflationary forces. With sentiment practically gone for risk-on-market ideas, investors are much more careful about where they put their money. Thus, the professionals at BofA’s wealth-management arm can provide quality assistance.
It’s a long shot, I’ll admit that. But for greater comfort, Gurufocus.com labels BAC stock modestly undervalued. The standout metrics include the company’s long history of profitability. As well, its net margin of nearly 31% ranks higher than almost 63% of the competition.
General Motors (GM)
As a connoisseur of German vehicular technologies, I’m not naturally prone to support companies like General Motors (NYSE:GM). However, despite macroeconomic headwinds, I believe that GM may spark an unexpected bullish rally. For now, it’s one of the best under-$50 stocks to buy based on fundamental demand structures.
Mainly, I’m going to point you to the Wall Street Journal article that mentioned that the average age of vehicles on U.S. roadways hit a record 12.2 years. You know what that means? At some point, people must start thinking very seriously about buying a new (or new-ish) ride. GM also stands out from other automakers because it serves both consumer demographics: combustion-engine gearheads and electric vehicle advocates.
Notably, Gurufocus.com labels GM modestly undervalued. Sure, the company can use some tweaking in certain financial metrics. But with a forward price-earnings (P/E) ratio of 5.5 times — compared to the industry median of 8.7 — GM seems like a deal you can’t ignore.
For those that want to take potshots with under-$50 stocks to buy, tech firm Intel (NASDAQ:INTC) could make for an intriguing wager. To be fair, INTC presents plenty of risks so those who are faint of heart should not apply. Since the beginning of 2022, Intel shares plunged 49%, reflecting significant sentiment loss for risk-on-market ideas.
On the other hand, the company still maintains an attractive business profile. Take a look at its data center operations. Yes, it’s been losing market share to rising competition. Nevertheless, it holds about 70% market share at the moment. Moreover, Intel’s Mobileye acquisition will potentially enable it to command a leadership position in the race for driving autonomy.
Financially, the company features strengths across the board. Presently, Gurufocus.com labels INTC as significantly undervalued. Despite posting double-digit three-year book growth rates and operating and net margins, Intel’s forward P/E pings at only 9.5 times. In comparison, the semiconductor industry has a median forward P/E of 14.6 times.
If you really want to go off the deep end for under-$50 stocks to buy, you might turn your attention toward PetroChina (OTCMKTS:PTRCY). Chinese companies present challenges for American investors for several reasons.
At the same time, PetroChina tempts market speculators. Despite several hydrocarbon-related companies skyrocketing this year, PTRCY remains underwater, down nearly 3% YTD. Nevertheless, over the trailing five days, PetroChina shares have gained almost 6%. With the oil cartel known as OPEC+ cutting production, PTRCY appears fundamentally undervalued.
Looking at Gurufocus.com, the temptation only grows with the company rated as modestly undervalued. Primarily, the company enjoys solid growth trends and robust profitability indicators. Yet its forward P/E pings at 5.5 times, below the industry median’s 6.5 times.
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.