SPECIAL REPORT The Top 7 Stocks for 2024

​The 3 Most Undervalued Stocks Under $20 to Buy Now: August 2023

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  • Negative economic headwinds appear to be gone in this year.
  • Palantir Technologies (PLTR): The company recently announced $1 billion buyback program, and Foundry technology is gaining momentum.
  • American Airlines Group Incorporated (AAL): A potential partnership can provide international expansion. 
  • ​​SoFi Technologies Incorporated (SOFI): The fintech company is making acquisitions and attracting more customers.
stocks under $20 - ​The 3 Most Undervalued Stocks Under $20 to Buy Now: August 2023

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Despite the looming threat of a recession over the past year, the recession hasn’t taken effect. Some experts are predicting that it will never arrive, including the Federal Reserve. On July 26th, the Federal Reserve stated that they are “no longer forecasting a recession,” which spells good news for stocks.

Many predict a ‘soft landing’ from our current economic state. In June, the Consumer Price Index (CPI) slowed to 3% which is a record over the past two years. This compounded with unemployment at a long-term low of 3.5% seals the deal for a more optimistic future.

With the negative economic headwinds finally gone, undervalued growth stocks can flourish in the revitalized market environment. Investors looking for a bargain may want to consider these top stocks under $20.

Palantir Technologies (PLTR)

Palantir (PLTR) logo in a smartphone with a series of stock charts on the background.
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Palantir Technologies (NYSE:PLTR) is a software company that provides big data analytics and visualization services to government agencies and networks. Backed by the FBI and CIA, Palantir’s artificial intelligence platform is a key growth driver. 

PLTR stock is up by over 140% YTD, rewarding long-term investors in the process. Palantir’s main business lies in artificial intelligence, which is expected to grow at a 26.8% CAGR from $150.20 billion in 2023 to $1,345.20 billion by 2030. 

Financials are strong as revenue is growing rapidly based on a forward revenue 19.44% growth rate. With a $0.01 non-GAAP EPS in Q2 2023 and a levered FCF margin of 21.32% demonstrating high profitability, Palantir could even be trading at 11.3x its sales over the coming years. 

Palantir introduced a $1 billion buyback program from the demand for its AI platforms which will attract more investors in the long run. Palantir also introduced AIP, an artificial intelligence platform that actively presents real-time data for the user. Revenue from the United States government increased 15% YoY to $302 million from $230 million in Q1.

This also introduced new demands from international governments. With notable technology companies such as Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), and Alphabet (NASDAQ:GOOG,NASDAQ:GOOGL) utilizing platforms such as Palantir’s Foundry, Palantir is positioned to enhance customer interfaces effectively in the long run.

Palantir Technologies is a sound investment opportunity for investors looking for strong growth probability. Its artificial intelligence platforms can provide value for investors’ portfolios.

American Airlines Group Incorporated (AAL)

American Airlines plane on ramp in Chicago Airport. American Airlines is amongst the airlines cancelling flights
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American Airlines Group Incorporated (NASDAQ:AAL) is an American airline company that provides air transportation services for its passengers and cargo. Year-to-date, AAL stock is up 22.84% and is hovering at the $15 range. Yahoo! Finance reports 13 analysts having a 12-month median price target of $18.88, with the range spanning from as low as $11.00 to as high as $26.00. The global airline industry is forecasted to grow at a high 25.5% CAGR from 2022 to 2027.

American Airlines has reported good financials lately. In its Q2 2023, American Airlines reported a revenue of $14.06 billion that grew 4.72% YoY and beat analyst expectations by 2.35%. Diluted EPS of 1.88 also grew 176.47% YoY and beat analyst expectations by 20.45%. Finally, net income of $1.34 billion grew 181.09% and these financials alone are strong indicators moving forward for continued profitability. 

American Airlines has been working on a partnership with start-up Connect Airlines. These two companies have signed a Memorandum of Understanding (MoU), and Connect is raising up to $40 million in Series B funding while waiting on full operational approval from the Federal Aviation Administration (FAA).

A letter was sent to the Department of Transportation for approval on any deals possible with shareholders as well. Assuming these two companies do fulfill this partnership, American Airlines will benefit from its competitive advantage in expanding international plane rides to Canada. The company is the only major United States carrier without a partner to carry out flight routes to Canada. 

The partnership with Connect Airlines can greatly benefit American Airlines. AAL stock and its financials have been performing well, and the developing partnership can present a buying opportunity for investors.

​​SoFi Technologies Incorporated (SOFI)

Silhouette of person holding mobile phone with SoFi (SOFI) logo shown in background
Source: shutterstock.com/rafapress

​​SoFi Technologies Incorporated (NASDAQ:SOFI) is an American fintech company. SOFI stock is up by over 90% year-to-date, and the stock price is in the $8.00-$9.00 price range. Yahoo Finance! reports 16 analysts having a mean 12-month price target of $10.09, running from a low of $3.00 to a high of $16.00. 

The personal finance software market is forecasted to grow at more than 6% CAGR from $1.7 billion in 2023 to $2.2 billion in 2027. Within the United States, consumer demand for personalized and secure devices has been increasing at a steady rate over the years. 

Financials for SoFi Technologies are strong. SoFi’s recent quarter has reported a revenue of $485.4 million, which grew 37.73% YoY and beat analyst expectations by 3.26%. A diluted EPS of -$0.06 is recovering nicely having grown 50.38% YoY and exceeding analyst expectations by 14.20%. Lastly, a net profit margin of -9.8% grew by 63.96% and these financials demonstrate a strong recovery in the years to come.

Recently, SoFi Technologies acquired Wyndham Capital Mortgage in an all-cash transaction, a leading financial technology mortgage lender. Wyndham Capital has helped more than 100,000 borrowers with a 98% satisfaction rating in the past two decades. This acquisition allows SoFi Technologies to provide more mortgage products and enhance its digital application process.

SOFI is a stock that you would not want to miss out on. It is dirt cheap, with high growth prospects following its partnership with Wyndham Capital and steadily recovering financials moving into 2024. 

On the date of publication, Michael Que 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.

The researchers contributing to this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.


Article printed from InvestorPlace Media, https://investorplace.com/2023/08/the-3-most-undervalued-stocks-under-20-to-buy-now-august-2023/.

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