InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Everyone is stressing about the FAANG stocks right now. But there are some other stock plays that are looking very attractive even in this choppy market. Not only that but you don't have to pay three-digit sums to make some sweet returns. It's time to look outside the box at some cheap stocks you won't regret. The best way to find these stocks is to use a screener, that way you can open up your investing horizon to a much wider stock pool.
Here I used TipRanks' Stock Screener to find these 10 cheap stocks. Essentially, I looked for 1) stocks with a 'Strong Buy' top analyst consensus; 2) serious upside potential (i.e. over 20%). And on top of this each one of these stocks comes in at under $30. Basically a bargain! Note that the consensus is based on ratings from the last three months, so the consensus is pretty up to date.
Let's take a closer look now:
Cheap Stocks to Buy: First Data Corp (FDC)
Source: FrankieLeon via Flickr (Modified)
"You Can't Be Serious; Shares Too Cheap To Ignore" exclaims five-star Oppenheimer analyst Glenn Greene ( Track Record & Ratings ) on this financial stock. One of the largest payment processing companies in the world, First Data Corporation (NYSE: FDC ) offers retailers card and mobile payment acceptance capabilities for online and point-of-sale transactions.
Greene reiterated his Buy rating on the stock on November 14. His $27 price target indicates upside potential of over 50%.
"After reviewing 3Q18 results, and speaking with management, we remain optimistic regarding FDC's growth trajectory and believe the post-quarter stock reaction (-17% since 10/26 vs. +2% for S&P 500) has been largely overblown" the analyst wrote. Both FDC's intermediate term growth/profitability outlooks and deleveraging thesis remain intact.
At these levels he views shares as 'very compelling', with a roughly 35% discount to peers.
Overall FDC- a 'Strong Buy' name- has received 17 recent buy ratings vs just 3 hold ratings. This comes with an average analyst price target of $27 (51% upside potential). Interested in FDC stock? Get a free FDC Stock Research Report.
Cheap Stocks to Buy: ANGI Homeservices Inc (ANGI)
Chances are you know of ANGI Homeservices Inc. (NASDAQ: ANGI ) - the world's largest digital marketplace for home services. The company is the result of a major tie-up between Angie's List and IAC's HomeAdvisor.
The big news is that ANGI has just reported its best quarter since the merger. "ANGI's 2017 [earnings] goal of $270 million initially faced investor skepticism," wrote Raymond James analyst Justin Patterson ( Track Record & Ratings ) on November 9. "Yet management delivered on its goal while driving revenue outperformance."
"Having demonstrated the margin potential, management believes it is prudent to reinvest organically and via M&A (i.e. the Handy acquisition) to drive the next phase of growth in a $400 billion total addressable market" the analyst wrote. Handy Technologies Inc is a New York-based startup offering small tasks at fixed prices.
Patterson has a buy rating on the stock and a $23 price target. With shares down over 5% in the last five days, his price target suggests 24% upside potential lies ahead. (However note that the stock is still up 60% year-to-date.) In total this 'Strong Buy' stock has received 5 recent Buy ratings and 1 hold rating. Get the ANGI Stock Research Report.
Cheap Stocks to Buy: Altice USA Inc (ATUS)
Cable stock Altice USA Inc (NYSE: ATUS ) is currently trading at 'frankly ridiculous' levels argues top Pivotal Research analyst Jeff Wlodarczak ( Track Record & Ratings ). Indeed, his $25 price target translates into juicy upside of over 40%.
The logic for the fall in cable stocks in 1H was fundamentally flawed, says the analyst. "As these concerns reasonably have cleared up the stocks have rebounded substantially a trend we expect to continue into the seasonally strongest results of the year (4Q/1Q)."
Plus, you have to remember that cable's best-in-class, high-margin data product (70% EBITDA margins) gives them the ultimate hedge against competition and most anything else that rears its head (including a potential slowing economy).
And as for ATUS specifically, the Pivotal analyst says "investors seem to think that weakness at former parent Altice Europe's French operations mean the Altice operating strategy cannot work in the U.S. when the reality is that France remains, arguably, the most competitive market in the world."
He isn't alone in this bullish take on the stock: ATUS scores 100% Street support. This is with a $25 average analyst price target (40% upside potential). Get the ATUS Stock Research Report.
Cheap Stocks to Buy: Williams Companies Inc (WMB)
Source: Maciek Lulko (Modified)
Williams Companies Inc (NYSE: WMB ) boasts 33,000 miles of pipelines - including America's largest-volume and fastest- growing pipeline - providing natural gas for clean-power generation, heating, and industrial use.
According to the company, demand for natural gas is tremendous and continues to grow. This is because gas is cleaner, less expensive and more efficient than other fuels capable of meeting around-the-clock energy demand.
"We think Williams is well positioned to benefit from demand-driven Northeast gas projects around Transco, solid NE G&P volume and cash flow growth, low-capex GOM upside, and more control of liquids downstream the Rockies" opines Top 50 RBC Capital analyst T J Schultz ( Track Record & Ratings ).
He has a Buy rating on the stock with a $36 price target (43% upside potential). Looking forward, Schultz believes Williams can grow EBITDA by 10% in 2019. After 2019, he forecasts mid-to-high single digit growth, supported by new projects coming online and growth on legacy assets.
Overall, 7 analysts have published Buy ratings on WMB in the last three months, vs just 1 hold rating - giving the stock its 'Strong Buy' analyst consensus. This is with a $33 average analyst price target (31% upside potential). Get the WMB Stock Research Report.
Cheap Stocks to Buy: Smartsheet Inc (SMAR)
Source: Hillary via Flickr
Smartsheet Inc (NYSE: SMAR ) calls itself the leading work execution platform. Essentially, it helps organizations move from idea to impact - fast. Shares are already up 35% over the last six months. But don't worry there's still plenty of upside lined up ahead.
When you consider the market opportunity SMAR faces, you understand why this stock still looks cheap. Apparently there are now 865 million "knowledge workers", which is a big TAM [total addressable market] for a company with "only" 4.2 million users.
"We remind investors that when growth software stocks are at the foothills of a large TAM opportunity the stocks almost always work for the simple reason that you don't have any contravening evidence that says the company won't scramble its way to the top" notes Canaccord Genuity's Richard Davis ( Track Record & Ratings ).
Fresh from the company's upbeat user conference and analyst day, he calls execution 'exemplary' and cites the new $1 billion revenue target in 4-6 years.
Overall this 'Strong Buy' stock has received only Buy ratings in the last three months. These six analysts have an average price target of $36 (34% upside potential). Get the SMAR Stock Research Report.
Cheap Stocks to Buy: Trupanion Inc (TRUP)
Everyone loves pets, and one stock out there is benefiting from our growing pet obsession.
Welcome to Trupanion (NASDAQ: TRUP ), a pet insurance provider for cats and dogs in the U.S., Canada and Puerto Rico. Trupanion has just smashed Q3 earnings results, earning it a full set of Buy ratings from the Street. "Off the leash" cheered RBC Capital's Mark Mahaney ( Track Record & Ratings ) on November 9. He continued: "We view TRUP's top-line results as encouraging, with EBITDA and pet growth continuing to outperform expectations."
In short, Trupanion ticks all the boxes for the RBC analyst. Here's a stock with a large growth opportunity (estimated to be about $3-5B+) in an under-penetrated market (less than 1%) with a robust growth profile, a differentiated business model, and a very strong management team.
The conclusion: Trupanion shares represent an attractive investment absent a significant, unexpected slowdown in pet policy growth. As a result Mahaney reiterated his Buy rating on the stock with a $44 price target (70% upside potential). This comes in slightly above the average analyst price target of $42 - which still indicates compelling upside potential of 61%. Get the TRUP Stock Research Report.
Cheap Stocks to Buy: American Eagle Outfitters (AEO)
Source: Mike Mozart via Flickr (Modified)
True, retail stocks are facing challenging circumstances right now. But could American Eagle Outfitters (NYSE: AEO ) be the exception? Both Citigroup and Wedbush firms have just upgraded AEO from Hold to Buy. They are predicting sizable upside potential of 33% and 43% respectively.
Right now AEO is down ~30% since reporting 2Q earnings at the end of August. The stock has been painted with the same brush as most other retail stocks. But according to the Street, investors are missing a big factor in the AEO bull story.
"But AEO has something that others don't - one of the most attractive growth concepts in retail (Aerie)" argues Citigroup's Paul Lejeuz ( Track Record & Ratings ). "Aerie is taking market share in the lingerie market with consistent double-digit comps and significant growth potential… And with the recent sell-off, we believe the market is not giving AEO the credit it deserves for Aerie.
He believes Aerie is worth ~$2BN, implying the core AE biz is valued at 3.1x EV/EBITDA, which is overly pessimistic. Indeed, six analysts have published recent Buy ratings on AEO stock. So no sell or hold ratings here. Get the AEO Stock Research Report.
Cheap Stocks to Buy: Pattern Energy Group Inc (PEGI)
Renewable energy stocks are perfectly positioned to capture the ongoing transition from carbon-based power systems. A transition estimated to be worth a whopping $10 trillion. And Pattern Energy Group Inc (NASDAQ: PEGI ) is one of these stocks. The company owns and operates 12 wind power projects in the U.S., Canada and Chile.
Plus the stock is currently looking super cheap - especially when you factor in that this is a top-quality dividend stock. "With a dividend yield of ~9%, we continue to believe PEGI is significantly undervalued" cheers Oppenheimer's Colin Rusch ( Track Record & Ratings ).
He believes the stock is set up for 'superior performance.' Moreover, "We believe its underwriting practices are in line with industry best practices and its wind resource modelling capabilities are among the industry leaders."
With 100% Street support, analysts are predicting upside potential of 20% from current levels. Get the PEGI Stock Research Report.
Cheap Stocks to Buy: Evolent Health Inc (EVH)
Evolent Health Inc (NYSE: EVH ) sells software and consulting services to help healthcare providers, like hospital systems, offer care at lower costs. This is particularly important given the ongoing shift to value-based payments systems. From a Street perspective, this is a first-class stock with a lot of potential.sup
In the last half year, EVH has received only buy ratings from the Street. And in the last three months alone, we are looking at 8 top analyst buy ratings. The best part: with an average price target of $33, analysts see prices spiking over 38% in the coming months.
"We continue to be encouraged by the momentum in the transition toward risk-based reimbursement and by EVH's position to gain from it" says five-star Oppenheimer analyst Mohan Naidu ( Track Record & Ratings ). He reiterated his buy rating with a $31 price target on November 7. Plus the recent acquisition New Century Health adds nicely to numbers and moves estimates higher for Q4.
He says: "Evolent is one of the few vendors well positioned to help health systems that intend to transition to risk-based reimbursement models. The systems need significant help… While there is competition, we believe EVH is differentiated in its proven ability, technology offerings, service and credibility in helping organizations make the switch successfully." Get the EVH Stock Research Report.
Cheap Stocks to Buy: The Medicines Company (MDCO)
Last but not least on our cheap stocks list we have The Medicines Company (NASDAQ: MDCO ). This is a company with the potential to deliver a blockbuster drug for cholesterol management.
B Riley FBR analyst Madhu Kumar ( Track Record & Ratings ) recently initiated coverage of the stock with a Buy rating citing the firm's lead drug, PCSK9 RNAi drug inclisiran (developed in conjunction with Alnylam Pharma (NASDAQ: ALNY )).
He says inclisiran "has the potential to disrupt the management of high cholesterol and cardiovascular disease." This helps explain the analyst's very bullish $70 price target. From current levels this means shares could explode 250% from current levels!
Kumar recommends keeping an out for results from the ongoing Phase III ORION-9/10/11 trials for inclisiran, guided for 2H19. If the data meets expectations, these results could serve as key positive catalysts for MDCO shares.
"We reiterate our optimism for the safety and tolerability profile of the firm's lead asset, inclisiran ahead of topline data" Kumar wrote on November 9. This Strong Buy stock boasts only buy ratings, and an average analyst price target of $58 (190% upside). Get the MDCO Stock Research Report.
TipRanks.com offers exclusive insights for investors by focusing on the moves of experts: Analysts, Insiders, Bloggers, Hedge Fund Managers and more. See what the experts are saying about your stocks now at TipRanks.com . As of this writing, Harriet Lefton did not hold a position in any of the aforementioned securities.
More From InvestorPlaceCompare Brokers
The post 10 Cheap Stocks You Won't Regret Buying appeared first on InvestorPlace .