Warren Buffett once said, “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” True to form, investors have always looked to buy shares at a low price and sell them high, which is the very definition of making money on the stock market.
Stocks that do not promise much today may get a bump in share price tomorrow. Alternately, some promising stocks do not win over the stock market in the long run. Therefore, the decision on which cheap stock to opt for becomes a significant one.
In 2023, the market rebounded from the vagaries of 2022, primarily based on a tech rally. For first-time investors or those who want an entry point into the market without putting a lot at stake, the time feels right. Inflation has been on a gradual curve downward.
U.S. consumer prices increased modestly in June and logged their smallest annual increase (0.3%) in more than two years, suggesting that inflation continued to subside. The Consumer Price Index (CPI) increased 0.2% month over month in June against the consensus estimate of 0.3%, after rising 0.1% in May. Core CPI rose 0.2% after increasing 0.4% in May.
Also, the Fed, for the first time in a year, initiated a rate-hike pause last month. As far as the outlook goes, not too many more rate hikes seem to be on the horizon, even as a 25 bps hike is expected from the July FOMC meeting. This means that investors are going to have spare change at their disposal and might be looking for cheap stocks to invest in. Also, with the market rebounding and sustaining that momentum for the time being, buying cheap stocks with good prospects might lead to a fast price rise if the choices are judicious.
Our Choices
We have selected three stocks below the $20 price point for this purpose. These stocks flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy). The search was also narrowed down with a VGM Score of A or B. Here V stands for Value, G for Growth and M for Momentum. The score is a weighted combination of these three metrics. Such a score allows you to eliminate the negative aspects of stocks and select winners.
Corebridge Financial, Inc. CRBG is a retirement solutions and insurance products company in the United States. It currently has a share price of $19.35.
The Zacks Consensus Estimate for Corebridge’s current-year earnings is $4.06 per share, indicating growth of 41.5% from the prior-year quarter. For 2024, the Zacks Consensus Estimate is $5 per share, suggesting 23.3% growth year over year. Corebridge currently sports a Zacks Rank #1 and a VGM Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
Redfin Corporation RDFN is a residential real estate brokerage company operating in the United States and Canada. This Seattle-based company functions as an online real-estate marketplace. It currently has a share price of $15.27.
For the current year, the Zacks Consensus Estimate for Redfin is a loss of $1.10 per share, indicating an improvement of 64.6% from the prior-year quarter. For 2024, the Zacks Consensus Estimate is a loss of $0.90 per share, suggesting an 18.8% improvement year over year. Redfin currently carries a Zacks Rank #2 and has a VGM Score of B.
Community Health Systems, Inc. CYH is an operator of general acute care hospitals. The company also offers emergency, surgery, critical care, internal medicine, obstetrics, diagnostic, psychiatric and rehabilitation services. CYH is currently priced at $4.43.
For the current year, the Zacks Consensus Estimate is a loss of $0.65 per share, indicating growth of 52.9% from the prior-year quarter. For 2024, the Zacks Consensus Estimate is earnings of $0.07 per share, suggesting 110.5% growth year over year. Community Health currently has a Zacks Rank #2 and a VGM Score of B.
Community Health Systems, Inc. (CYH): Free Stock Analysis Report
Redfin Corporation (RDFN): Free Stock Analysis Report
Corebridge Financial, Inc. (CRBG): Free Stock Analysis Report
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