With stubbornly high inflation hitting the pocketbook, you might believe that the concept of the best affordable stocks for June 2023 is a pipe dream. To be quite blunt, investors should avoid chasing cheap securities just because of their entry point. Many times – if not most of the time – cheap equities are that way for a reason (usually not a good one).
That said, you can’t make blanket statements for all circumstances. If you dig deep enough, you’ll find promising enterprises, even high-return stocks under $20. That’s right: for less than a Jackson, you can acquire an equity stake in some rather surprisingly popular ventures. Or you can take a potshot in a business enterprise of tomorrow. Of course, as with any endeavor in life, the higher the reward potential, (usually) the higher the risk. Before you proceed, you’ll want to conduct your due diligence. Nevertheless, for the smart speculator, below are the top stocks under $20 to buy.
To be clear upfront, I don’t want to keep milking the same cow over and over again. However, when you’re specifically targeting a narrow niche – such as high-return stocks under $20 – your options are limited. With Vipshop (NYSE:VIPS), investors enjoy exposure to a leading online discount retailer in China. Specifically, as the Chinese economy gradually recovers, Vipshop may be in a prime position to benefit.
However, following a skyrocket in Nov., VIPS incurred choppy trading so far this year. Since the January opener, VIPS gained only 5% of its market value. That said, the company provides great value under the hood. Notably, the company enjoys strong net income expansion, from $735 million in 2021 to just over $1 billion on a trailing-12-month basis.
Despite this magnitude of expanding profitability, VIPS trades at a forward multiple of 7.8. As a discount to projected earnings, Vipshop ranks better than 86.93% of companies listed in the cyclical retail industry. Thus, it makes a great case for the best stocks to buy on a budget. Finally, analysts peg VIPS as a consensus strong buy. Their average price target lands at $17, implying nearly 13% upside potential.
Hailing from Brazil, Ambev (NYSE:ABEV) is a major brewing company. Since the beginning of the year, ABEV managed to gain nearly 9% of equity value. Its performance slips just under the U.S. benchmark S&P 500, which gained over 10% during the same period. At the moment, Ambev commands a market capitalization of just over $45 billion. Shares trade hands below $3 at the time of writing.
Though seemingly a penny stock without any context, ABEV legitimately represents one of the best affordable stocks for June 2023. Sure, the price tag is low but that shouldn’t impugn the underlying value. Specifically, Ambev enjoys significant net income expansion, from $2.21 billion in 2020 to $2.84 billion on a TTM basis.
Even with that profitability growth, the market prices ABEV at a forward multiple of 15.45. As a discount to projected earnings, the brewing company ranks better than 77.27% of the competition. Lastly, covering analysts peg ABEV as a consensus strong buy. Their average price target hits $3.46, implying nearly 23% upside potential.
A multinational automotive manufacturing company, Stellantis (NYSE:STLA) itself might not be a household name. However, its 16 brands, including icons such as Alfa Romeo, Fiat, and Jeep have fans across the globe. Moving forward, Stellantis’ brand Dodge will make a splash in the electric vehicle market with a zero-emissions muscle car if you can believe it.
Trading at $15.48 at the last count, STLA gained over 6% of market value since the January opener. However, in the trailing month, STLA slipped more than 5%. The red ink might represent a great excuse to acquire one of the best affordable stocks for June 2023. From 2021 to 2022, the company’s net income expanded from $16 billion to $17.8 billion. As well, the enterprise posted a better-than-average three-year revenue growth rate of 14.6%.
Even with that, the market prices STLA at a forward multiple of only 3.23. As a discount to projected earnings, Stellantis ranks better than 97.69% of its peers. Thus, it’s a promising idea among top stocks under $20 to buy. Per analysts, STLA ranks as a strong buy. Their average price target clocks in at $22.35, implying over 44% upside potential.
Headquartered in Dallas, Texas, Envela (NYSEAMERICAN:ELA) engages in diverse business activities within the recommerce sector. This involves re-commercializing luxury hard assets, consumer electronics, and information technology equipment. As well, the company provides end-of-life recycling solutions. Put another way, it’s go-green capitalism at its finest. And it also happens to be one of the best affordable stocks for June 2023.
Priced at $7.41 at the time of writing, ELA gained nearly 41% of its equity value since the Jan. opener. However, even with this outperformance, the market prices ELA at a trailing multiple of 13. As a discount to earnings, Envela ranks better than 62.62% of the cyclical retail industry.
In addition, the company prints a three-year revenue growth rate of 30.6%, outflanking almost 90% of its peers. As well, its EBITDA growth rate during the same period impresses at 62.6%. Even with all the positives, ELA’s price-earnings-growth ratio sits at 0.2, well below the retail sector’s ratio of 1.14 times. Turning to Wall Street, Lake Street’s Mark Argento rates shares a buy. His price target stands at $11, implying over 48% upside potential.
Radiant Logistics (RLGT)
Based in Bellevue, Washington, Radiant Logistics (NYSEAMERICAN:RLGT) is a comprehensive North American provider of third-party logistics and multimodal transportation services. Per its public profile, Radiant provides domestic and international freight forwarding services, truck, and rail brokerage services, and other value-added supply chain management services. Priced at $6.26, RLGT gained nearly 21% of equity value since the Jan. opener.
Even with the outperformance, RLGT ranks among the best affordable stocks for June 2023. It’s not just the price point that’s attractive here. Rather, the company benefits from decent stability in the balance sheet. Also, its Altman Z-Score pings at 4.59, indicating a low risk of bankruptcy.
Enticingly, Radiant’s three-year revenue growth rate clocks in at 18.2%, outpacing 79.31% of its peers. As well, its EBITDA growth rate during the same period impresses at 25.9%. Despite these stats, the market prices RLGT at a low multiple of 9.21. Thus, it’s a great candidate for the best stocks to buy on a budget. Looking to the Street, analysts peg RLGT as a moderate buy. Their average price target comes in at $10, implying nearly 60% upside potential.
Qifu Technology (QFIN)
Hailing from China, Qifu Technology (NASDAQ:QFIN) is a data-driven, technology-empowered digital platform. From its corporate profile, Qifu enables financial institutions to provide better and more targeted products and services to a broader consumer base. The company also offers standardized risk management services, in the form of Software-as-a-Service (SaaS) modules to institutional clients. Priced at under $15, QFIN is an intriguing opportunity among the best affordable stocks for June 2023.
To be fair, though, it’s also one of the riskiest. Since the beginning of this year, QFIN tanked by almost 30%. Still, it’s possible that QFIN could become one of the high-return stocks under $20. Notably, the company’s three-year revenue growth rate is 22.5%, beating out 81.4% of sector players. Also, its book growth rate during the same period is 34.2%, above 93.42%. Despite the strong numbers, QFIN appears a bargain, priced at only 1.18 times trailing-year sales. Also, its price-earnings (PE) ratio sits at 4.34 times. Thus, it seems one of the top stocks under $20 to buy.
Lastly, analysts appear enthused about QFIN, pegging it a moderate buy. Their average price target lands at $26.12, implying over 78% upside potential.
Magic Software (MGIC)
If you really want to maximize the risk-reward framework of the best affordable stocks for June 2023, Magic Software (NASDAQ:MGIC) may be worth consideration, but probably only with pocket change. Based in Israel, Magic is a global provider of powerful and versatile end-to-end, on-premises, and cloud-based integration and low-code application development platforms. At the moment, shares trade at $11.40. So far, so good.
Unfortunately, shares fell almost 30% since the beginning of this year. That’s probably going to lose most investors reading this. However, if you still want to give it a chance as one of the affordable stocks with high growth potential, it’s fair to point out its operational strengths. Its three-year revenue growth rate pings at 20.2%. And its EBITDA growth rate is 20.5%. Both stats are well above the underlying sector median. Even with these numbers considered, the market prices MGIC at a trailing multiple of 13.9. As a discount to earnings, Magic ranks better than 75% of the competition.
On a final note, a Barclays analyst pegs MGIC a buy. The expert forecasts a $23 price target, implying nearly 102% upside potential.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.