3 Cheap Stocks Under $20 to Buy Heading into September

The market keeps on humming along to new highs, with the tech-heavy Nasdaq and the S&P 500 both continuing to close at records over the last week. Wall Street remains focused on the positive signs of economic recovery, which includes solid PMI data, an improving earnings outlook, and more.

Businesses and consumers are learning every day how to further adapt to the coronavirus. Meanwhile, investors have been relatively choosy in their stock picking during the market’s comeback from its March lows. Tech stocks have soared, as have big retailers, and other firms that have proven they can grow during the economic downturn.

Unknowns do lurk ahead in the form of the upcoming election, trade, and what’s next on the virus front. But the Fed is providing support and Jerome Powell officially announced Thursday its new policy that will see the Fed non longer preemptively lift rates to curb higher inflation.

This means that historically low interest rates will likely be with us for some time. The prospect of prolonged low rates, coupled with an improving earnings outlook, could present further runway for the stock market, even if it experiences some pullbacks along the way.

Therefore, investors might want to remain on the hunt for stocks to add to their portfolios. So today we dive into a niche that is attractive to many investors: low-priced stocks that trade for under $20 that also boast strong fundamentals…

WillScot Mobile Mini WSC

Prior Close: $18.22 USD

WillScot Corporation and Mobile Mini officially closed their merger at the start of July, and now operates under WillScot Mobile Mini, while trading under the WillScot ticker. WSC offers “turnkey office space and storage solutions for temporary applications.” The Phoenix-based firm is a portable storage and modular space giant that can be found everywhere from construction sites and other outdoor-focused and temporary work environments across the U.S., Canada, the UK, and Mexico.

WSC’s business is vital and never really goes out of style even though it has to deal with broader economic cycles. Shares of WSC have soared 130% since the market’s March lows and over 25% in the last month. Despite the climb, they still have a bit of room to run before they hit their February, pre-COVID highs.

Our Zacks estimates call for the newly combined company’s sales to surge over 50% in both Q3 and Q4. The company’s adjusted fiscal 2020 earnings are projected to soar 204% to $0.70 per share on 27% stronger sales. Looking further ahead to give a sense of more normalized operations, WSC’s revenue is projected to jump another 27% in FY21 to help lift its EPS figure 26% higher.

WSC’s positive earnings revisions help it earn a Zacks Rank #2 (Buy) at the moment, alongside its “A” grade for Growth in our Style Scores system. The stock is also part of a space that rests within the top 1% of our over 250 Zacks industries. Investors should also note that WSC management announced on August 7 a $250 million “indefinite-lived” share repurchase program.

DouYu International DOYU

Prior Close: $16.18 USD

DouYu is a live streaming firm that focuses mostly on the video gaming and e-sports market in China. The company went public in July 2019 and it’s drawn comparisons to Amazon’s AMZN Twitch for its ability to allow people to watch video games live. DouYu is backed by Chinese social media and gaming powerhouse Tencent TCEHY and its stands to grow within the booming gaming global video space that is projected to soar from $159 billion in 2020 to over $200 billion by 2023

DOYU operate across both PC and mobile apps and it says it “has gained coveted access to a wide variety of premium eSports content.” DOYU is up 40% in the last month and 130% since the market’s March lows to crush its Gaming industry’s 55% average climb. And the stock trades right in line with its industry that includes Activision Blizzard ATVI and Electronic Arts EA.

The company’s Q2 earnings, which it reported on August 10, topped our Zacks estimate and its sales climbed roughly 30%. Our current Zacks estimates call for DouYu’s adjusted fiscal 2020 earnings to jump from $0.04 in the year-ago period to $0.51 on 26% stronger sales. The Chinese gaming firm is then projected to see its sales climb another 30% higher next year to help raise its bottom-line by 45%. And DOYU holds a Zacks Rank #2 (Buy) at the moment, as well as a “B” grade for Growth.

At Home Group Inc. HOME

Prior Close: $18.84 USD

At Home, as its name might suggest, is a budget-friendly home décor retailer with over 200 stores in around 40 states. The Plano, Texas-based firm has seen its stock price skyrocket well over 600% during the stay-at-home environment, up from under $2 a share in March to its current price tag of roughly $18. Some recent selling has pushed HOME off its highs of nearly $20 per share, which might set up a better buying opportunity for those high on the stock.  

At Home is part of the Retail - Home Furnishings industry that rests in the top 11% of our Zacks industries. The company stands to benefit greatly, alongside the likes of Lowe’s LOW, Home Depot HD, and others, from do-it-yourself and home improvement spending that has boomed during the pandemic. “We are emerging from this pandemic stronger and even better positioned, and we believe we are gaining meaningful market share,” CEO Lee Bird said in prepared remarks when it released its preliminary Q2 results at the end of July.

At Home’s Q2 revenue is projected to climb over 50% to reach $515 million, with its third-quarter revenue expected to jump 18%. On top of that, HOME’s adjusted second quarter earnings are projected to soar roughly 640%. At Home’s strong earnings revisions help it grab a Zacks Rank #1 (Strong Buy) at the moment.

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

See the 5 high-tech stocks now>>

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The Home Depot, Inc. (HD): Free Stock Analysis Report
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
Activision Blizzard, Inc (ATVI): Free Stock Analysis Report
Lowes Companies, Inc. (LOW): Free Stock Analysis Report
Electronic Arts Inc. (EA): Free Stock Analysis Report
Tencent Holding Ltd. (TCEHY): Free Stock Analysis Report
WillScot Corporation (WSC): Free Stock Analysis Report
At Home Group Inc. (HOME): Free Stock Analysis Report
DouYu International Holdings Limited Sponsored ADR (DOYU): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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