9 Best Stocks Under $50 To Buy

Technology titans with high market capitalizations like Facebook [NASDAQ: FB] and Apple [NASDAQ: AAPL] attract the bulk of the attention from the financial media, but cheaper stocks offer up opportunities to profit big time too.

In many respects, stocks under $50 represent a happy medium for investors. They’re often well known companies yet without the hefty price tag that’s associated with companies like Amazon [NASDAQ: AMZN].

Here are seven of the best stocks under $50 to buy now.

1. Mimecast

Mimecast is a cybersecurity company specializing in cloud protection for data, web and email services. 

Recently, the firm has seen its shares tumble by 25 percent from highs of around $60 in late-December 2020. Despite its drop in valuation, Mimecast posted pretty good numbers in its latest quarterly report: revenue grew 18 percent year-on-year to $129.6 million, total net customer numbers were up by 500 to 39,600, and its profits increased 68 percent annually at $34.6 million.

The company’s guidance is especially optimistic too. Management predicts a 40 percent growth in FCF by fiscal year 2022, with revenues hitting somewhere in the region of $558-$568 million by the same time as well.

The business operates in a niche sector, with a TAM of $24 billion globally, and a potential untapped customer base of over 1 billion. Given Mimecast’s current low share price, good financial position, and a market ready for its services, this stock could be a quality pick for both value and growth investors alike. 

2. Sound Financial Bancorp

Sound Financial Bancorp’s share price doubled over the last twelve months. The Seattle-based holding company, which operates the Sound Community Bank, recently issued a new stock repurchase program, and sentiment around the business is positive.

The bank improved many of its key financial metrics from Q4 fiscal 2019 through Q4 fiscal 2020. Total assets grew from $720 million to $861 million over the period, as did total deposits from $617 million to $748 million. Total equity was up 10 percent overall to $85.5 million.

Unlike many other banking businesses during the coronavirus pandemic, Sound Financial managed to come out of the crisis in a better position than it started when the COVID-19 outbreak was first reported.

The company benefits from a strong management team, which will only be further improved with the recent addition of Amy Row, the highly experienced real estate specialist who has been named the firm’s new Commercial Loan Officer.

3. Sanmina

Sanmina Corporation is a well-established name in the advanced technology production space, specializing in all aspects of mission-critical printed circuit board manufacture for the medical, military and communications industries.

The company has been providing excellent value to investors for a long-time now, albeit at the expense of headline grabbing growth opportunities – which isn’t such a surprise for a business as mature as this one.

Indeed, the firm’s TTM Price-to-cash flow ratio stands at a decidedly low 7.90, shaming the industry average of 23.63. And its generally strong balance sheet should also inspire confidence too, with a debt-to-cash ratio of 0.7, and liquidity of $1.2 billion.

Customer demand in all sectors of the business is expected to remain strong throughout 2021, and even with the semiconductor component shortage beginning to take its toll, the firm believes it posted decent results for the first quarter of the year.

Sanmina’s share price has been trending horizontally recently; but with an EPS beat and a revenue miss, it appears the company must be doing something right to keep up profitability. Don’t bet on this changing anytime soon.

4. Resolute Forest Products

Lumber prices have been soaring during the COVID-19 crisis, even setting record highs recently of $1,326.7. Analysts suggest that pre-pandemic prices will never return, and that the rise in new housing construction will keep pushing numbers up further as the year goes on.

This is splendid news for Resolute Forest Products, a wood products manufacturer whose share price has grown over 10-fold in the last year.

The big question for investors is whether there’s still any upside left in the company. Looking at its profit growth, the firm’s enjoyed a year-on-year EBITDA increase of 58.69 percent, which seems very attractive when compared to an industry average of just 4.26 percent. Forward price-to-sales ratio is admirably low at 0.36, which is also below the sector median of 1.43.

Analysts are bullish on the stock too, with a projected revenue for the next quarter of $958 million up from $769 million last time round. 

5. Euroseas

The shipping industry suffered a major downturn during 2020, with global maritime trade estimated to have been cut by over 4 percent due to decreased demand resulting from the outbreak.

But a recovery of sorts is predicted for this year – and it couldn’t come soon enough for Euroseas, the century-old Greek shipping outfit. The IMF estimates that a growth swing in GDP of 8 percent could take place between 2020 and 2021, helping inspire a general worldwide economic boom.

Still, Euroseas hasn’t fared too poorly of late. The company’s share price was fairly flat throughout 2020, hovering at just above the $3 point. But since the turn of the year it has seen its stock rise rapidly.

Euroseas is also expected to be profitable again when it releases its next round of financial results. Its previous EPS was negative, and missed analyst’s expectations by $0.20. If all goes to plan, the business should be returning at least $0.40 per share when the firm announces its results later on in May.

6. Progyny

Progyny is a fertility benefits management company that seeks to make fertility treatments as effective as possible for those on their journey to parenthood. The company uses its proprietary Smart Cycle system to integrate the treatment process to tailor client experiences to ensure the most optimal clinical outcomes.

The company only went public in late 2019, but has seen its share price grow almost four-fold since then. More importantly, and for such a young enterprise, it is also already turning a profit.

Year-on-year revenue appreciation is a healthy 50.15 percent, and Forward EBITDA growth is predicted at 79.63 percent.

Its TTM Price-to-sales is 14.31, which is close to double for the sector average, but given the firm’s status as a growth company still, this shouldn’t be too concerning.

Gross profit margin is pretty low for the sector, at just above 20 percent – but this has been an improvement for the company from last year’s figures. The recent run up in share price may have eroded potential gains in the stock, and it’s up to individual investors to make the call on whether to enter the market at the current time.

7. Adyen

Adyen is a payments platform solution that simplifies sales processing at the merchant-side of the transaction equation. The firm has acquired unicorn status, but the company’s CEO, Pieter van der Does, jokes that the business should be called a “cockroach”, as it “can fit into any possible scenario.” 

The company has excellent growth opportunities in the U.S. as it has so far yet to make significant inroads into the North America market.

Its main net revenues come from outside the region, with only 9 percent of net revenue as a percentage of revenue generated in this area.

The business makes most of its revenue in the Eurozone, and is also extensively diversified in the Latin America and Asia-Pacific region too.

Adyen’s revenue is expected to grow 39 percent this year, and its earnings 62 percent. If its Forward EBITDA growth performs as predicted by analysts, at 48.24 percent, the stock presents a very tempting growth play in the fast-moving remittance space.

8. H&R Block

H&R Block [NYSE: HRB] is a U.S. financial services company that operates in North America, Australia, and India and offers tax preparation, payroll, and business consulting.

The company’s share price, earnings and revenues displays a remarkable seasonality that invites buyers around the holiday season before the spike up due to higher revenues from tax season.

 

9. Sirius XM

Sirius XM [NASDAQ: SIRI] is a broadcasting company that offers a subscription-based music streaming service via satellite radio. Sirius XM’s fate is heavily linked to the fate of the automotive industry that supplies the vehicles where it’s installed.

The company’s prospects appear steady and stable: it has over 34 million subscribers and is the world’s largest radio company by revenue.

Sirius XM shares have delivered positive returns for investors every year in the previous decade. In addition, the company’s strong free cash flow allows it to buy back its debt and distribute dividends to shareholders.

 

 

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.