Given the unique circumstances associated with the Covid-19 pandemic, investors may want to take a step back from the crowd and consider the best bargain stocks to buy now. To be sure, several equity-based opportunities printed much red ink this year, presenting cheap prospects to consider. However, a difference exists between a company being cheap rather than facilitating a true discount.
For this list of best bargain stocks to buy now, I used Gurufocus to screen for fundamentally deflated businesses. At the same time, these companies present relevant risk-reward profiles. Either they feature compelling operations that will eventually regain traction and/or they bring to the table significant value. As well, these ideas cover various industries, hopefully providing something for everyone.
Finally, I ranked (based on my opinion) the best bargain stocks to buy now according to their reliability matrix. In other words, as you go down the list, the fundamental risks will likely increase. Still, you may accrue greater rewards.
So, without any more delay, below are the best bargain stocks to buy now.
Best Bargain Stocks: AbbVie (ABBV)
One of the more popular pharmaceutical companies, AbbVie (NYSE:ABBV) generated headlines prior to the Covid-19 pandemic with its acquisitiveness. Specifically, the company declared in 2019 that it would acquire Allergan for $63 billion. In turn, the transaction would assign control to AbbVie for the highly profitable wrinkle treatment Botox.
Why is AbbVie’s Allergan acquisition significant? Fundamentally, the grand work-from-home experiment caused people to relax their physical presentability. However, as mitigation protocols fade and social activities resume, emphasis on appearances accelerated.
Don’t just take my word for it. The American Society of Plastic Surgeons stated that: “During the pandemic, 11% of women surveyed indicated they are more interested in cosmetic plastic surgery or non-surgical procedures now than before COVID-19, and the figure is even higher among women who have already had surgery or a procedure – 24%, respectively.”
Better yet, ABBV is one of the best bargain stocks to buy thanks to its solid financial profile. Per Gurufocus, AbbVie commands excellent growth and profitability metrics relative to its underlying industry.
Let’s all repeat the mantra that seemingly everybody loves to repeat. Ready? One, two, three: electric vehicles are the future! And therefore, by logical deduction, EV firms should constitute most of your ideas for the best bargain stocks to buy now.
Here’s the issue, actually two issues. First, broader EV integration requires public infrastructure. Please keep in mind that about 63% of all housing units have garages or carports. That leaves quite a few people who don’t have such access.
Second, EVs represent crazy-expensive purchases. This year, the average EV transaction shot up to nearly $63,000. Folks, unless the future also involves consumers making a ton of money, EVs will endure an uphill battle.
But that segues to Toyota (NYSE:TM). An excellent hedge among the best bargain stocks to buy now, Toyota seeks to advance EV innovations like solid-state batteries. However, it’s also a combustion-car powerhouse, building personal vehicles for just about any budget.
Better yet, Toyota features solid metrics in financial stability, growth and profitability.
Best Bargain Stocks: BP (BP)
Here’s a piece of factual news that will undoubtedly pique curiosity. According to Bloomberg in Jan. 2022 (thus, before Russia’s invasion of Ukraine), the International Energy Agency (IEA) was trying to figure out where 200 million barrels of oil went. Essentially, the gap between key inventory reports suggests an “underreporting of demand or over-reporting production.”
A little more than a month after the report, Russian President Vladimir Putin inexplicably thought it was a good idea to invade a neighboring country. It goes to show that black swan events can, at any time, disrupt critical energy flows.
That’s a major reason why investors should consider BP (NYSE:BP). While the go-green ideological narrative doesn’t bode well for hydrocarbons, the reality is that we’re still dependent on them. Further, with indications suggesting that the crisis in eastern Europe will worsen before it improves, oil supplies remain threatened. Cynically, this dynamic boosts BP.
But why I really like BP is that it’s one of the best bargain stocks to buy now. The company features a forward price-earnings ratio of 4 times, that’s below the industry median of 7.3.
Moving onto the more speculative side of the best bargain stocks to buy now, Medtronic (NYSE:MDT) brings to the table several medical advancements. Arguably, though, the company recently generated much attention for its diabetes-related arm. For instance, Medtronic’s InPen system provides an intelligent solution to patients, providing the right insulin dose and removing guesswork variability.
While not attempting to sound callous, the medical device manufacturer also enjoys a large total addressable market. According to Grand View Research, the global diabetes devices market size may command a valuation of $28.84 billion by the end of this year. By 2030, the segment may see annual revenues of $54.16 billion.
As far as the best bargain stocks to buy now are concerned, MDT also fits this bill nicely. Specifically, the company features decent strengths in its balance sheet. As well, the company commands strong profitability metrics. One highlight is its net margin of 15.9%, much higher than the 1.19% industry median.
Finally, Medtronic features a forward PE of 16.8 times, below the industry median of 26 times. Gurufocus pegs MDT as modestly undervalued.
Best Bargain Stocks: Playa Hotels & Resorts (PLYA)
What made the Covid-19 crisis so difficult for everyone involved was the disruption of socialization. Forced to shelter in place, many people lost ties to their favorite activities and each other. Therefore, during the roughly two years of mitigation protocols, demand for vacations and experience-based services brewed.
If you have a strong conviction that revenge travel will continue, Playa Hotels offers a compelling opportunity. Featuring luxury oceanfront resorts in Mexico and the Caribbean, the company provides an excellent medium for rest and relaxation.
Moreover, Gurufocus considers Playa modestly undervalued, making it one of the best bargain stocks to buy now. The company features a forward PE of 11.8 times, well below the industry median of 19.57 times. Plus, Playa commands robust operating and net margins.
Still, investors will need confidence in the revenge travel phenomenon. However, it helps that Playa caters to a more affluent consumer base. As well, Mexico and the Caribbean are closer destinations to Americans than say Europe or Asia.
FleetCor Technologies (FLT)
If you believe that a broader return to the office will materialize, FleetCor Technologies (NYSE:FLT) may be one of the best bargain stocks to buy now. The company provides fuel cards and workforce payment products and services. Specifically, it helps automate, secure, digitize, and control both back and front office payments.
This occurs via e-payables solutions, facilitating payments to suppliers (both domestic and abroad). As well, FleetCor specializes in payment cards for employee purchases on the go.
Now, one of the fundamental reasons for FleetCor’s slowdown in the market — it’s down about 9% over the trailing year — is the mass work-from-home experiment. As such, normal business travel routines suffered. Even now, the New York Times reports that business travel volumes haven’t rebounded to their former pace.
However, that could very well change. If it does, FLT could swing much higher from current levels. According to Gurufocus, FleetCor represents a significantly undervalued business. Notably, the company commands excellent long-term growth and profitability metrics. In addition, its forward PE is 15 times, far below the industry median of 26.3 times.
Best Bargain Stocks: Mitek Systems (MITK)
Another significantly undervalued company per Gurufocus is Mitek Systems (NASDAQ:MITK). The company combines the best of financial technology (fintech) solutions with access identity management and other security-based solutions. On paper, Mitek is a software company that specializes in digital identity verification and mobile capture using artificial intelligence algorithms.
Essentially, it allows people to deposit checks via their mobile phones and open bank accounts from mobile devices. While Mitek offers compelling innovations, the narrative depends on the normalization of society. Specifically, the company can enjoy the full breadth of demand realization once workers return to the office.
This scenario may be a highly probable reality. Apparently, word leaked that Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) executives threatened workers to shape up or ship out. The tech giant might not be the only one with such sentiment, especially as recessionary pressures build.
Because the company operates in limbo due to the unusual dynamics of the new normal, MITK is undervalued. Specifically, its forward PE ratio of just under 15 times is below the industry median of 26.3 times. As well, the company features strong long-term growth metrics.
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.