The global inflation surge and monetary policy tightening by major central banks have all contributed to the market volatility this year. Despite that, both the S&P 500 and the Nasdaq indices have returned 17.7% and 34.06% year-to-date, respectively. However, this impressive performance masks the divergence among different sectors and industries, as some have benefited from the changing economic conditions while others have suffered. In this article, we will highlight three under-$1 stocks to buy that are undervalued relative to their fundamentals.
Gee Group (JOB)
Gee Group (NYSEMKT:JOB) is a national staffing and recruiting firm servicing small-and-medium sized businesses (SMBs). The company provides specialized contract and permanent personnel in the IT, legal, accounting and healthcare industry verticals. The company provides all of these professional services through its multiple brands, such as SNI Companies, Agile Resources, Access Data Consulting, Triad Personnel Services and Paladin Consulting.
In 2022, the Gee Group maintained a diversified revenue mix, with over 74.2% of its revenues coming from professional contract staffing services and 16.1% being derived from direct hire placement services.
The stock is currently trading at $0.58 per share, which implies a market capitalization of $67.8 million, making it a great option in under-$1 stocks to buy. Moreover, shares are trading at 7.4x forward earnings, while its enterprise value is only 3.3x forward EBITDA. Both of these metrics imply the company is trading cheaply relatively to the profits it’s generating. Investors looking for exposure to a labor market that remains robust should definitely consider adding shares of JOB to their portfolio.
Globus Maritime (GLBS)
Globus Maritime (NASDAQ:GLBS) is a dry bulk shipping company that owns and operates a fleet of six vessels with a total carrying capacity of 381,738 deadweight tons. The shipping company transports various types of dry bulk cargoes such as coal, iron ore, grain, steel products, cement, alumina and other minor bulk commodities. Globus Maritime’s revenue mix is diverse with both spot market and short-term time charters, which allows it to capture the fluctuations in the freight rates.
Shares are trading just under $1 and remain undervalued. In particular, the shipping company’s enterprise value is only trading at 0.3x forward EBITDA. Furthermore, shipping rates are likely to go up due to both higher oil prices and a blockage plaguing the Panama Canal. These macroeconomic phenomena could provide higher revenues and net income in the short and medium term for Globus Maritime. For investors looking for an undervalued shipping stock, this is surely one of the top under-$1 stocks to buy.
Cybin (NYSEMKT:CYBN), a clinical-stage biopharmaceutical company, makes the third entry on my list of under-$1 stocks to buy. This pharma company develops psychedelic-based therapeutics for mental health conditions. While Cybin is still in the pre-revenue stage, the company has made meaningful strides in the development of CYB003 which will be able to treat major depressive disorder, CYB004 for generalized anxiety disorder and CYB005 to treat neuroinflammation. The California state legislature’s recent decision to decriminalize mushrooms as well as other natural psychedelics could eventually bring forth meaningful business growth and opportunities for Cybin in the future.
The stock is currently trading at $0.33 per share, which makes sense given the lack of substantial revenue. However, Cybin’s current assets remain relatively robust, amounting to nearly $10 million. Because the biopharmaceutical company has zero debt, there should not be too much pressure on operating margins going forward. The final stage of the clinical trials for CYB003 should be completed by the end of 2023, and the results could potentially breathe life into Cybin’s share value.
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On the date of publication, Tyrik Torres 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.