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Best Stocks To Buy Under 20

It can be difficult to find a deal in the stock market regardless of current market conditions. For the last decade, stocks have traded well above historical average P/E ratios. Fortunately there are still a handful of undervalued stocks in corners of the market that most investors ignore. This page lists cheap stocks that have a share price of $20.00 (20 dollars) or less and consisently-receive "buy" and "strong buy" ratings from Wall Street's top-rated research analysts.

best stocks to buy under 20

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At the end of October, I wrote about several top stocks trading for under $20 a share, and I can no longer include some of these on this type of a list -- not because they are no longer great stocks, but because after strong performances, they are no longer under $20 a share.

Stocks like Build-A-Bear Workshop (BBW 0.68%) and Xponential Fitness (XPOF 1.83%) were two of my recent top stocks under $20, and I'm happy to say that both have graduated beyond this level after gains of 43% and 25%, respectively, over the past month. With this in mind, what top stocks under $20 a share now could join them in the future?

The underlying business is performing well. During the most recent quarter, Figs grew revenue 25.2% year over year, and the company's active customer account grew by 23.6% to 2.2 million active customers. Figs boasts gross margins of 71%, indicating that customers view its clothing as a premium product.

These stocks are under $20 for a variety of reasons: Bowlero is working its way up toward $20, while Figs and Petco have fallen from loftier levels. But if these companies continue to execute on their strategies, they should eventually exceed $20 over time.

Headquartered in Tacoma, Washington, TrueBlue (NYSE:TBI) represents a workforce solutions firm. Presently, TrueBlue features a market cap of $644 million. At the end of last year, TBI closed out at $19.58 per share. Thus, it barely made it for consideration as one of the best stocks under $20 to buy. For the entirety of 2022, TBI ended up losing almost 31% of equity value.

Then again, late in 2022, the government there signaled intentions to open the country for tourism and relax its policies. This should help boost Vipshop, making it an intriguing (albeit risky) name among the best stocks under $20 to buy.

Currently, Noah commands a market cap of $1.03 billion. For 2022, shares dropped almost 48% of equity value. Nevertheless, in the trailing month, shares actually gained more than 6%. Therefore, this could signal the early innings of a market recovery, drawing interest as one of the best stocks under $20 to buy.

Moreover, the enterprise benefits from strong profit margins. For instance, its net margin stands at 6.5%, beating out 88% of the competition. Finally, the company features 10 years of consecutive profitability over the trailing decade. Therefore, WILC could be one of the best stocks under $20 to buy in terms of proven track records.

Several of these stocks have already overcome significant hurdles, yet they remain priced below $20, making them accessible to almost any investor. Over the long term, small investments can generate impressive returns.

Asana (NYSE:ASAN) stock is a tech name that appears too cheap to ignore. Like most tech stocks that consistently generate losses, Asana can be viewed as attractive because of its strong growth or it can be seen as a stock to avoid because of its lack of profitability.

The technology sector has had a tough time this year. Some of the market's favorite names in 2021 have imploded and come within shouting distance of penny stock status. While some of these tech stocks were riding the tide and will never see new highs, others have been unfairly thrown out with the rest and could eventually comeback for a rebound.

Several stocks trading below $20 per share have long-term potential to grow a relatively small investment into a sizable position. These five companies are less proven than your run-of-the-mill blue chip stocks, but could eventually become huge winners. Bold investors can consider these tech stocks as speculative holdings in a diversified portfolio.

When seeking out the best stocks to buy now, investors will need to be brave and patient in regard to timing, as well as agile as the stock market eventually transitions from bear market to bull market. Go ahead and add resolute to the character traits you'll need this year, because many market strategists say you can't get from one market to the other without going through a recession first.

Given the uncertain, sometimes roiling backdrop for stocks, where should investors look when seeking out the best stocks to buy now? A popular piece of advice among Wall Street strategists now is to resist the bargain-basement appeal of the most beaten-up stocks and focus instead on high-quality shares. "Investors should avoid volatile names and be cautious on both deep-value and unprofitable growth companies," says Koesterich. "Instead, emphasize quality with a focus on earnings consistency and good profitability."

Now may be a good time to tilt toward value-oriented companies and small-cap stocks, both longtime underperformers that are showing signs of new life. Over the past five years, for example, the S&P 500 Value Index (opens in new tab) has returned 6.2% annualized, compared with 9.1% for the S&P 500 Growth Index (opens in new tab). Through early 2023, value has outperformed growth, with a 4.1% return compared to growth's 3.8% gain. "We would stick with value. These cycles last a while," says Ryan Detrick, chief market strategist at money management firm Carson Group (opens in new tab). Sectors typically grouped in the value style include energy, financials, industrials and materials.

So, with all of this in mind, here are 12 of the best stocks to buy now. The names featured here vary by size and industry and are not meant to compose a diversified portfolio. But all, for one reason or another, are well positioned to benefit from a transition to a bull market from a bear market in 2023.

Don't ignore the tenets of diversification and shun tech or the growthier side of the market completely when adjusting your portfolio to include the best stocks to buy now. Instead, take a barbell approach, says Tony DeSpirito, a managing director and portfolio manager at BlackRock (opens in new tab). This will allow you to scoop up value-focused shares at historically attractive relative price-to-earnings ratios (P/Es) and high-growth stocks at valuations that have come down from the stratosphere and are now at normal, if not yet underpriced, levels.

Take Advanced Micro Devices (AMD (opens in new tab), $76.61), a leading semiconductor manufacturer. Analysts have mixed ratings on one of Wall Street's best semiconductor stocks in part because an economic slowdown and negative investor sentiment are near-term obstacles.

Matador Resources (MTDR (opens in new tab), $52.38) is an oil and gas exploration and production company that has risen alongside its fellow energy stocks over the last 12 months. Specifically, MTDR stock is up more than 20% year-over-year.

Even with its impressive growth on the charts, MTDR is one of best values on this list of the best stocks to buy now. Shares are currently trading at just 5.1 times forward earnings, well below Matador's five-year average of 11.2.

Investors seeking out the best stocks to buy now might consider holding for longer than one year: Keith says she sees "significant market-share opportunity" for Workday, and over the next three years, the stock's potential reward outweighs the risk.

Why is Merck (MRK (opens in new tab), $109.16) on this list of the best stocks to buy now? The pharmaceutical giant is known for its high returns over the past decade. Analysts are upbeat toward MRK, too, as evidenced by a consensus rating of Buy. Of the 27 analysts that follow Merck tracked by S&P Global Market Intelligence, 13 say it's a Strong Buy, seven have it a Buy, six call it a Hold and one rates it at Sell.

And for investors seeking out the best defensive stocks, Huynh says MRK's growth is "low risk," and that cancer drug Keytruda and HPV vaccine Gardasil are "well established and less affected in the near term by healthcare reforms under the Inflation Reduction Act (IRA) than peers."

Many analysts are neutral about Amgen (AMGN (opens in new tab), $236.16), a bio-pharma firm. Though some new drugs are off to a good start and selling well, that's been offset by slowing sales for its older treatments, which are under pressure from competitors.

Morgan Stanley (opens in new tab) analyst Matthew Harrison upgraded the stock recently to Overweight, the equivalent of Buy, citing the strength of the company's pipeline and the stock's undervalued price. Amgen shares have gained about 7% over the past 12 months but trade at 13 times 2023 expected earnings, a fraction of the P/E of 70 that's typical for biotech firms. With all this in mind, it's easy to see why AMGN is on this list of the best stocks to buy now.

Buying the dip is not a simple trading strategy and should be approached cautiously. Done right, you can earn a fat discount on stocks with sound fundamentals and strong prospects. Think of it like buying quality stocks at a discount. 041b061a72

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