Some stocks get lots of attention, both in financial news reports and mainstream media. GameStop (GME), Tesla (TSLA), Apple (AAPL), and Facebook (FB) are just a handful of names that nearly everyone knows. With so much information available, these companies seem like no-brainer stocks to buy now. However, savvy investors know that some of the most lucrative opportunities are those that fly under the radar.
Stocks that aren’t the subject of endless analysis are more likely to be undervalued. That situation occurs when the market price is lower than the stock’s perceived intrinsic value. Perhaps the potential for growth isn’t recognized and baked into the stock price. Or maybe the company is well-run and profitable, but no one has noticed – yet.
Buying such stocks, a strategy known as value investing, puts you at an advantage when the rest of the market becomes aware of the discrepancy and the market price catches up to the company’s true worth.
These are three no-brainer stocks to buy now while prices are low.
Ebix SaaS Solutions Serve Clients On 6 Continents
Insurance, financial services, and healthcare are massive components of the economy. Combined, insurance and financial services made up $1.5 trillion (7.4 percent) of the US gross domestic product (GDP) in 2018, and healthcare is even higher – $3.8 trillion or 17.7 percent of the US GDP in 2019.
Many investors assume that the best way to profit from these fast-growing industries is to buy shares of market-leading insurance, financial, and healthcare companies. Examples include Goldman Sachs (GS), Morgan Stanley (MS), or Wells Fargo (WFC) and Abbvie (ABBV), Pfizer (PFE), or United Health (UNH) on the healthcare side. However, there’s another way to get involved in these industries without potentially paying a premium for shares.
All of the companies involved in insurance, financial services, and healthcare required advanced IT infrastructure. Among other activities, they are maintaining records, processing payments, keeping data secure, and complying with relevant regulations. The businesses supplying that IT infrastructure grow with the industries they serve – but because they operate in the background, analysts tend to overlook them.
Ebix is one such company. It has a long list of industry-leading Software-as-a-Service (SaaS) solutions, and it serves clients on six continents. Some of its most prestigious accounts include Aetna, Allstate, Fidelity, MassMutual, Merrill Lynch, and UnitedHealth.
Ebix struggled through 2020 due to the COVID pandemic, but the first quarter of 2021 demonstrated the company is rapidly recovering. Diluted earnings per share came in at $0.70, and total revenues reached a record $290 million. That figure is a year-over-year improvement of 111 percent.
Management projected a return to pre-COVID success by the end of 2021. Investors that buy now can get Ebix shares at value prices, which means a chance to benefit from the likely increase in price over the next 12 months.
Gevo Innovations Could Boost Airline Margins
Extraordinary weather patterns in recent years have increased focus on renewable energy. The need to reduce greenhouse gas emissions has never been more critical, and Gevo is leading the way in biofuels.
Gevo isn’t taking a single-pronged approach to renewable energy. There are five major divisions that work cooperatively to create advanced energy solutions for the areas that produce some of the world’s largest sources of carbon: airlines, motorsports, watercraft, cities, and commercial farms.
Sustainable aviation fuel is already hitting the market, but that doesn’t mean “mission accomplished.” Fuel is the biggest expense incurred by airlines, and the cost of current biofuel options is simply not manageable. Gevo intends to change that with new strategies for bringing sustainable aviation fuel into a more affordable range.
On the clean cities side, Gevo is working to create partnerships – in most cases, one at a time. The company just announced an important win – a four-year contract with the City of Seattle to supply at least 800,000 gallons of renewable fuel per year for the city’s fleet vehicles.
Gevo’s high-protein animal feed is perhaps the most interesting project in its portfolio. The process of building biofuels leaves a lot of high-quality protein behind. Rather than wasting it, Gevo produces high-protein animal feed, which in turn means higher-quality meat. Every gallon of sustainable aviation fuel Gevo produces means nine pounds of high-protein animal feed – a win/win.
For the moment, Gevo’s financials aren’t that impressive, but the optimism around one of Gevo’s upcoming ventures has investors excited. Net Zero 1 – the first in a series of Net Zero Projects – is scheduled to open in 2022 in South Dakota. The end result will be a plant that leverages renewable energy to produce energy-dense liquid hydrocarbons – and the company hopes it will be the first of many.
If successful, Gevo’s potential is virtually unlimited. That could be lucrative for investors who buy now.
Array Technologies Tied To Price Of Steel, For Now
Solar power is becoming far more affordable than traditional non-renewable energy. A long list of companies are in heavy competition to develop better, more efficient panels that bring the cost of solar down even more. Some of the market leaders include LG Solar, Hanwha Q Cells, and SunPower.
However, there is more to leveraging solar power than the actual solar panels. Those panels have to be mounted on specialized equipment that holds them and moves them to maintain the best possible sun exposure.
Array Technologies develops and manufacturers advanced ground-mounting systems that make it possible to harness solar power. The company plays a critical role in the larger trend towards renewable energy.
All of that equipment relies on steel, and that’s where Array ran into trouble. Steel prices are approximately 225 percent higher than they were a year ago, which means a dramatic change in the cost to produce each unit.
When Array’s top brass announced during the first quarter 2021 earnings call that the price of steel had altered guidance for the year, shareholders were furious. Many closed their positions in Array Technologies, and the stock dropped a shocking 46 percent in a single day.
Shareholders who decided to hold are confident the company will solve the steel pricing problem, and many analysts have added their support. That means an interesting opportunity for new investors who agree that Array can turn things around. Share prices may never be this deeply discounted again.
No-Brainer Stocks to Buy Now: The Bottom Line
There are no “sure things” when it comes to the stock market. Taking on higher risk can lead to higher rewards than safer, more stable stocks, but it is also possible for investors to lose their capital altogether. These three no-brainer stocks don’t come with a guarantee, but they have a number of characteristics that suggest they could be big winners.
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.