The allure of high-potential dirt-cheap stocks often tempts those looking for the next big win. This year has seen some market sectors skyrocket while others remain in the shadows, with untapped potential. These stocks continue to elude the glaring spotlight of market hype, ensuring savvy investors a chance at undiscovered treasures.
Whether it’s a major industry slump, management’s ambitious debt adventures, or a growing struggle to secure profits, there’s typically a reason why these stocks are priced low. However, as we embark on this quest for the best cheap stocks to buy, we must tread carefully. Not every bargain is golden. So, as you peruse the list of bargain stocks to buy, the goal isn’t just to find a cheap stock but one that offers genuine value.
High-Potential Dirt-Cheap Stocks: Teladoc (TDOC)
For risk-tolerant investors, Teladoc (NYSE:TDOC) could be an intriguing pivot in your portfolio. The telemedicine trailblazer basked in the limelight during the pandemic, guiding the healthcare sector into the digital age. However, post-pandemic challenges and dwindling patient visits have cast a shadow, prompting many to question the stock’s long-term vigor and underlying business.
Transitioning to its financials, there’s been a buzz regarding the firm’s earnings conundrum. Yet, recent indicators suggest a turn in the tide. Its recently released second-quarter results paint a promising picture, with revenues surging by a solid 10% year-over-year, reaching an impressive $652.4 million. This aligns perfectly with Wall Street’s predictions. Furthermore, a closer examination reveals that the firm’s net loss shrank significantly, down to $65.2 million from a whopping $3.1 billion in the previous year’s quarter. The numbers speak volumes about Teladoc’s resilience, with the stock still down 79% from its 52-week high price.
Perdoceo Education (PRDO)
Perdoceo Education (NASDAQ:PRDO) stands tall, effectively navigating academia’s intricate realms, nurturing Colorado Technical University and the American InterContinental University System under its massive academic canopy. Moreover, it offers various programs ranging from associate degrees to doctoral pursuits and professional development courses for those eager to scale their careers.
Additionally, Perdoceo added another layer to its growth story, effectively integrating Coding Dojo into its portfolio through a colossal $52.8 million acquisition. Furthermore, Perdoceo’s robust momentum is underscored by its second-quarter results surpassing estimates for an impressive sixth consecutive quarter. Its second-quarter sales showed a remarkable 11.3% year-over-year bump to $186.6 million and a substantial $578.1 million cushion in its financial reserves. Also, it’s stock, trading at a mere seven times its trailing-twelve-month cash flows, signals promising potential.
High-Potential Dirt-Cheap Stocks: Pfizer (PFE)
Following its coronavirus vaccine-propelled surge, Pfizer’s (NYSE:PFE) trajectory has been leveling off. Moreover, factors such as drugs nearing their patent expiration have nudged PFE stock into recalibration mode.
Nevertheless, the pharmaceutical titan isn’t resting on its laurels. With a promising pipeline flaunting potential blockbuster drugs on the horizon, Pfizer’s growth trajectory remains remarkably strong. The company isn’t shying away from strategic acquisitions bolstered by its sturdy balance sheet, resulting in a remarkably diversified portfolio. Additionally, recent FDA nods for its NGENLA drug, catering to children above three with insufficient endogenous growth hormone production, and LITULFO, addressing severe alopecia areata in adolescents, is mighty encouraging. On top of that, the FDA green-lit Fidanacogene Elaparvovec, another drug aimed at Hemophilia B treatment.
As Pfizer doubles down on R&D, projections are remarkably optimistic, with the pipeline potentially driving north of $20 billion in additional sales from unique molecular entities by the decade’s end.
Rio Tinto (RIO)
Diversification is the name of the game for Rio Tinto (NYSE:RIO), as it efficiently casts a wide net across industrial commodities. With an insightful emphasis on metals tailored for global energy evolution, its portfolio is buzzing with incredible promise. Steering the ship towards the copper frontier, Rio’s partnership with Codelco in probing different Agua de la Falda prospects speaks volumes of its strategic foresight. However, its accolades don’t stop there, as its stakes in premium assets, including the Kennecott mine in Utah and Escondida in Chile, point to a fruitful long-term future.
Moreover, with anticipated hikes in production and favorable price realizations on the horizon, the firm is poised to deliver for its shareholders. Additionally, the stock is down more than 55% from its 52-week high price, with its flourishing iron ore segment serving as a backbone for further investments in metals such as copper and lithium.
High-Potential Dirt-Cheap Stocks: AT&T (T)
Communications giant AT&T (NYSE:T), has been experiencing subdued revenue growth due to multiple headwinds. Nonetheless, it still expects to deliver a spectacular $16 billion free cash flow this year. This hearty FCF is poised to aid the company in slashing its debt by a notable $4 billion by year’s end, yielding an amazing 7.93%.
Diving into the details of its second-quarter report, AT&T reaffirmed its yearly free cash flow prediction, with an added commitment to achieve $2 billion or more in savings. Also, the telecom titan reported adjusted earnings of 63 cents per share, as its revenue nudged up by 0.9% year-over-year, hitting $29.9 billion.
Over the past three years, a staggering $65 billion was channeled into capital investments, with a further $35 billion on the spectrum. The future beams brightly as 5G waves envelop over 300 million individuals. With the consistent surge in post-paid phone and fiber subscribers and the burgeoning 5G embrace, it’s safe to assume a spirited comeback from T stock.
Ford Motor (F)
In an earnings roller-coaster for Ford Motor (NYSE:F), its second-quarter earnings report surpassed expectations but was clouded by a massive recall and an EV rollout delay. It delivered an earnings-per-share of 72 cents, handily beating the anticipated 55 cents. Moreover, its sales stood at a staggering $42.43 billion, outpacing the forecasted $40.38 billion. Adding to the good tidings, Ford raised its full-year earnings outlook from $11 billion to $12 billion, from $9 billion to $11 billion.
Despite the resounding performance, these bumps sent Ford’s stock down by over 3% post-announcement. With the shares down 14.2% in the past year and trading at a modest 0.31 times future sales, coupled with a generous 4.6% dividend yield, savvy investors might see this as an opportune moment to buy the dip.
Vipshop (NYSE:VIPS) is a juggernaut in China’s online discount retail sector, effectively capitalizing on its powerful eCommerce platform to offer sought-after brands at irresistible discounts. As China’s consumer spending posts a robust post-pandemic recovery, Vipshop is looking to harness this momentum.
Recent financials paint a rosy picture. The firm’s first-quarter net revenues leaped by 9.1% year-over-year, reaching the $4 billion mark. More impressively, the net income earmarked for its shareholders surged by a whopping 70% year-over-year, touching a commendable $270.7 million. This robust financial uptick, intertwined with China’s ever-evolving consumer landscape, points to Vipshop’s promising trajectory for forward-thinking investors ahead. The stock trades at just 0.6 times forward sales estimates and almost 13% lower than its 52-week high prices.
On the date of publication, Muslim Farooque 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