The 3 Best Bargain Stocks to Buy in February 2024

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On February 13, the market received a hotter-than-expected January CPI report. A broad stock market selloff ensued as investors began questioning the extent of rate cuts given the sticky inflation. Growth stocks could stall if rate cut expectations start falling, whereas the best bargain stocks to buy might catch a bid.

Although there are no guarantees in the market, mean reversion often happens. It could occur again due to the huge dispersion in performance between growth and value over the last year. Growth stocks, fueled by the artificial intelligence wave, have surged to new highs. Meanwhile, value stocks are lagging and trading at dirt-cheap valuations.

With the potential for an upset in monetary policy, the best bargain stocks to buy present a favorable risk-reward. Coming into the year, the market participants were expecting six rate cuts from the Federal Reserve beginning in March. But Fed Chair Powell has dispelled this view in his 60 Minutes interview. Moreover, the timeline for rate cuts might have been pushed further out with the hot CPI report.

Higher for longer means that growth stocks could take a breather with investors rotating into value stocks. This article discusses three trading at a significant discount, below 5 times forward earnings, yet they have a positive earnings outlook.

General Motors (GM)

Image of General Motors (GM) logo on corporate building with clear sky in the background.

Source: Katherine Welles /

Auto manufacturers had some serious headwinds in 2023. New union contracts that increased costs, slowing electric vehicle demand and intensifying competition all challenged the sector. These issues have left General Motors (NYSE:GM) trading at 2019 levels.

However, the situation is not as dire, and General Motors is one of the best bargain stocks to buy. Regarding cost worries, the company has disclosed that it will adjust its 2024 budget to offset incremental labor costs from the new union contract. What’s more, the $10 billion accelerated share repurchase announced in November 2023 is another boost to shareholders.

On January 30, the stock jumped 7.8% following solid Q4 sales and profit beat. Despite challenges in the electric vehicle (EV) market and the impact of a UAW strike, quarterly results were solid. Revenues were $42.9 billion, a slight 0.3% year-over-year decline.

For the full year, revenue was $171.84 billion, a 9.64% increase from 2022. Meanwhile, net income was $10.12 billion, up by 1.9%. Additionally, the company issued a bullish profit outlook for 2024. Management expects net income in the range of $9.8 to $11.2 billion and diluted EPS between $8.50 and $9.50. This guidance leaves GM stock trading at dirt cheap 4.5 times forward earnings.

In terms of growth plans, General Motors has scaled back its electric vehicle rollout. However, it still expects to grow the business. Notably, the company is seeing huge interest in its Chevrolet, GMC, Cadillac and BrightDrop EVs. Management expects the U.S. EV portfolio to hit variable profitability in the second half of 2024.

Given GM’s robust financial performance and positive outlook for 2024, analysts are bullish. The stock has 17 “buy” ratings, with an average price target of 49, suggesting over 20% gain.

United Airlines (UAL)

The side of a United Airlines (UAL) plane with

Source: travelview /

United Airlines (NASDAQ:UAL) has one of the best growth outlooks in the airline industry, yet it trades at a mid-single-digit price-to-earnings. Furthermore, air traffic has recovered to pre-pandemic levels and could strengthen as corporate travel rebounds. That’s why analysts are mostly bullish and see over 30% upside from current prices.

In terms of growth, this airline is undertaking a significant fleet expansion and modernization effort. The airline plans to introduce over 200 widebody planes to accommodate the growing demand for air travel and improve service. As of this writing, it has over 170 new aircraft in its fleet and plans to add over 800 new planes by 2032.

This expansion is part of United’s broader strategic growth plan, which includes increasing its trans-Atlantic and trans-Pacific flights. It is adding new nonstop flights to the Asia-Pacific region, including Manila, Hong Kong, Tokyo and Taipei. Also, it’s forging strategic collaborations with global airlines to enhance its network. United’s partnership with Emirates, for example, will significantly expand its reach in the Middle East and India.

Today, United is the largest carrier across the Atlantic and Pacific. It has a comprehensive service network across North America, Asia, Europe, Africa, the Pacific, the Middle East and Latin America. As it expands its fleets and increases its international routes, United will experience a steady rise in revenues over the next decade.

As of this writing, the market isn’t pricing the upcoming growth over the next decade. According to Finviz, UAL stock trades at a forward price-to-earnings of 4, yet it will grow earnings by 42% annually over the next five years. This stock is one of the best bargain stocks to buy today.

Vital Energy (VTLE)

A concept image of a person's hands holding a plant with floating glowing particles around it

Source: Shutterstock

After a series of acquisitions in 2023 totaling nearly $2 billion, Vital Energy (NYSE:VTLE) has positioned itself as a significant player in the Permian. It acquired assets from Driftwood Energy, Forge Energy, Henry Resources, Tall City Exploration III and Maple Energy Holdings.

These deals have been advantageous for several reasons. First, they have significantly increased its scale in the Midland and Delaware Basins. Secondly, Vital Energy added thousands of net acres and enhanced its oil production capacity, doubling the company’s size. Thirdly, they have shifted its production profile to 48% oil by volume, marking a significant transformation.

Given the flurry of mergers and acquisitions in the Permian Basin, Vital Energy could be an attractive takeover candidate. Its aggressive expansion and improved oil weighting could endear suitors in a consolidating market. Also, the company’s strategy of targeting Tier 2 assets aligns with the industry trend of seeking acquisitions that provide drilling longevity and operational synergies.

For now, management is focused on integrating the acquisitions and extracting cost synergies. According to the latest investor presentation, management expects $375 million in free cash flow in 2024. Thus, VTLE stock is one of the best bargain stocks to buy in the energy sector at a bargain 4 times forward free cash flow.

On the date of publication, Charles Munyi did not hold (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 Publishing Guidelines.

Charles Munyi has extensive writing experience in various industries, including personal finance, insurance, technology, wealth management and stock investing. He has written for a wide variety of financial websites including Benzinga, The Balance and Investopedia.

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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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