Despite the big rally this November, there are still plenty of stocks that are undervalued, with many securities looking downright cheap at current levels. While the upturn in equities is starting to broaden out beyond technology, there are still many areas of the market that have yet to be lifted by the rising tide. This offers investors an opportunity to buy some great stocks at depressed prices and ride them to future gains.
The end of earnings season tends to be a particularly opportune time to pick-up beaten down stocks on the cheap as the share prices tend to fall sharply in the short term if a company misses Wall Street expectations and the market overreacts. Here are three cheap stocks to buy today.
Ford Motor (F)
Ford Motor (NYSE:F) may have resolved its labor dispute with the United Auto Workers (UAW) union, but that hasn’t helped its stock. At least not yet. F stock is down 22% over the last year, including a 15% decline in the past six months. However, the stock is now trading at just seven times future earnings estimates, making it look historically undervalued. The automaker also pays its stockholders a quarterly dividend of 15 cents a share for a yield of 5.63%.
To be sure, Ford has some work ahead of it to recover from the UAW strike, which lasted six weeks and cost the company an estimated $1.3 billion in lost production. Citing the financial uncertainty of the strike, Ford pulled its forward guidance for the remainder of this year. The company has also delay about $12 billion in previously announced electric vehicle investments. All that said, the end of the UAW strike removes uncertainty for Ford and the company can now rebuild. F stock looks cheap at current levels.
Dick’s Sporting Goods (DKS)
Retailer Dick’s Sporting Goods’ (NYSE:DKS) got a nice bounce higher after its recent Q3 print, beating Wall Street estimates on the top and bottom lines. However, DKS stock still trades 16% below its 52-week high and is changing hands at just 11 times future earnings estimates, which is less than half the average price-to-earnings (P/E) ratio of 24.59 among S&P 500 listed companies. Dick’s too pays a strong quarterly dividend of $1 per share, giving it a healthy yield of 3.13%. Earlier this year, the dividend was doubled.
The Q3 results represented a bounce back quarter for Dick’s Sporting Goods, with the company announcing earnings per share (EPS) of $2.85 versus $2.44 that had been expected. Revenue came in at $3.04 billion compared to $2.94 billion that was forecast. Sales rose nearly 3% from a year earlier. Looking forward, Dick’s said it now expects EPS of $11.45 to $12.05 for all of this year, ahead of Wall Street views. The company even said that it’s “excited” for the holiday shopping season.
HP (HPQ)
For a cheap tech stock, checkout HP (NYSE:HPQ). The personal computer (PC) manufacturer’s stock is currently trading at just eight times future earnings estimates. Most tech stocks the size of HP trade for five times that valuation. The company’s P/E ratio has been brought lower as HPQ stock has stagnated. Over the last 12 months, the share price is flat (up 0.59%). However, the stock is currently trading 15% below its 52-week high.
Like the other names on this list, HP is notable for paying a high-yielding dividend. The company currently rewards stockholders with a quarterly payout of 28 cents a share, giving it a yield of 3.80%. Considering that most tech stocks pay no dividend, HP’s reimbursement looks very attractive. The company recently caught the attention of investors when it said that it sees a turnaround coming in 2024, with the global PC market expected to return to growth after slumping coming out of the pandemic.
On the date of publication, Joel Baglole 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.
