20 cheap stocks to buy now11/22/2023 ![]() ![]() Growth: A+ | Value: A- | Quality: A- | Momentum: A+ | Total: A But if history is any guide, firms like Velodyne Lidar eventually become a steal once they trade close enough to liquidation values. Lidar is a highly competitive industry, with firms like Luminar Technologies (NASDAQ: LAZR) and Innoviz (NASDAQ: INVZ) leading the way. There’s no guarantee of business success, of course. ![]() “We see that the combination of Velodyne and Ouster is expected to result in a stronger financial position, increased operational efficiencies and an accelerated path to profitability than either company would be expected to achieve on a standalone basis.” Independent proxy advisor firm Glass, Lewis & Co have also given their blessings. Combining two cheap firms will create an equally cheap outcome. In November, the company agreed to merge with Ouster (NYSE: OUST), another lidar firm trading at close to book value. Shares trade at 1x book value, suggesting that investors buying the company for its assets will receive its intangible intellectual property (and all future cash flows!) for free. Velodyne Lidar (NASDAQ: VLDR) is a San Jose-based firm that develops the light-based radar system found in autonomous vehicles. Growth: A+ | Value: A+ | Quality: A+ | Momentum: A | Total: A+ Today, my Profit & Protection system has identified several of these undervalued gems. And cash-generating companies should theoretically never trade below their cash value once you deduct liabilities. Car rental firms like Hertz (NASDAQ: HTZ), for instance, can sell their fleets on the used car market if they ever need the money. That’s because these firms tend to have valuable assets that create a floor to their share price. According to data from Thomson Reuters, companies in the second P/BV quintile (i.e., those with book values between 1x-1.5x) tend to outperform the market by around 2% per year. Regular readers will immediately know that certain price-to-book (P/BV) companies are great deals. But much like the penny stocks from mid-January, these are the companies that seek to maximize your odds of success. I’ve further narrowed this list to my top 20 Profit & Protection stocks. And if you eliminate companies with Cs in quality (i.e., those that generate no current return on capital invested), almost 100 firms still remain. ![]() No fewer than 435 stocks under $20 now score an A- or higher in their total grade. Today, that same system is going bananas for undervalued, cheap companies. (It’s the massive dull part in the middle that doesn’t go anywhere). It turns out that both Cathie Wood and Warren Buffett can be correct at once. The result? The system ends up with A+ growth stocks right next to A+ turnarounds. It’s why my quantitative Profit & Protection stock-picking system is based on how factors actually performed in the past. Electric vehicle meme stock Mullen (NASDAQ: MULN) now trades almost 100% higher than it did last month simply because retail investors decided to like the stock.Īs experienced investors all know, you don’t get extra points for style. That’s because certain elements can tilt the stock market odds in your favor. And more gains are likely for these ultra-cheap stocks this year. As a group, the three stocks have already returned almost 20% - double what the S&P 500 generates on an annual basis. Yet, performance has been excellent so far. Few companies rise 100% within 12 months, let alone 500%. In mid-January, I named three penny stocks that could rise 500% in a year. InvestorPlace - Stock Market News, Stock Advice & Trading Tips ![]()
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