You don’t need a lot of money to start building a position in a stock. Shares of many well-known and established companies can be purchased for under-$50. Investors can buy a lot of great stocks for under $20 a share. While you might not be able to buy a single share of Meta Platforms (NASDAQ:META) for $500, you could buy 10 shares of other companies whose stocks are trading at $50. Many stocks trading at low prices also have low valuations compared to their peers, making them a bargain to buy.
While markets are currently near all-time highs and many stocks have enjoyed huge gains over the past 18 months, there are low-priced alternatives that have yet to participate in the rally. Looming catalysts could change that soon, making now a good time for investors to take positions in some cheaper names. Analysts are certainly finding a lot to like in many low-priced, undervalued stocks. Here is Wall Street favorites: three under-$50 stocks with strong buy ratings for April 2024.
Birkenstock (BIRK)
German shoemaker Birkenstock Holding (NYSE:BIRK), best known for its signature sandals, only went public last fall. However, since then, BIRK stock has gained 25% to trade at $45 per share, making it one of the more successful initial public offerings (IPOs) of the last two years. The company, founded in 1774, is starting to come out with its earnings and the results are impressive. In February, Birkenstock reported financial results for the fourth quarter of 2023 that exceeded Wall Street expectations.
The company reported a 22% year-over-year jump in its revenue, saying it benefited from higher pricing and rising demand in America. Excluding one-time items, Birkenstock reported a profit of 17 million euros ($18.46 million USD). That was also better than analysts had forecast for the shoemaker. Wall Street sees more gains ahead as Birkenstock gets its footing and its sales accelerate, not only in the U.S., but across Europe and in the key market of China.
The company is also benefitting from growth in its direct sales channels, noting that its direct-to-consumer sales now account for 53% of total revenue.
Ford Motor Co. (F)
A lot of analysts have taken a shine to Ford Motor Co. (NYSE:F) now that the company has put last fall’s strike by the United Auto Workers (UAW) behind it. Since January, F stock has gained 11% and shares can currently be purchased for less than $14. Ford’s stock also looks cheap, trading at just 12 times future earnings estimates. And the automaker pays a generous quarterly dividend of 15 cents a share, which is good for a strong yield of 4.43%. Plus, Ford is known for paying special, one-time dividends.
Earlier this year, Ford paid a special dividend of 18 cents a share in addition to its first-quarter regular dividend. Ford’s leadership team announced they are slowing electric vehicle production, pivoting to gas-electric hybrids, which are currently more in demand. The company is delaying or canceling $12 billion in planned spending on new electric vehicles due to shifting market conditions as well as difficulties in profitably building the cars, trucks and SUVs.
Ford has pushed back production of a new all-electric three-row SUV until 2027 and put off plans for a new fully electric pick-up truck that it had codenamed “T3.” The market seems to have taken this change of strategy in stride. Since the switch to hybrid vehicles was announced, F stock has rallied.
American Airlines Group (AAL)
Analysts like American Airlines Group (NASDAQ:AAL), another stock that investors can be buy right now for less than $14. The largest carrier in the world, American Airlines is still recovering from the ravages of the pandemic. Today, AAL stock is trading 60% lower than where it was in 2019 before the Covid-19 crisis. The shares also look undervalued trading at 11 times future earnings forecasts. Unfortunately, American doesn’t pay a dividend. But there’s still a strong buy-the-dip opportunity with the stock.
Travel demand around the world is back above pre-pandemic levels and the number of travelers this year is forecast to hit record levels. According to the International Air Transport Association (IATA), 4.7 billion people are expected to travel in 2024 compared with 4.5 billion in 2019 before the pandemic. And American flies more passengers a year than any other carrier. The company’s earnings have been coming in strong lately, sending shares higher and providing another reason to buy AAL stock.
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.
