Traders and investors are interested in the fact that the majority of companies are trading at a considerably lower price than they were at the beginning. This is because they know that if market conditions worsen and stock values fall evenly, there will be opportunities for successful trading. However, to find great long-term investment opportunities, it is not enough to only focus on stocks that have fallen in price. Rather, investors should pay attention to companies that have significant growth and momentum, market domination, and favorable headwinds. Choosing the best cheap or decent stocks to invest in can be tough, but the information in this article will help you get a leg up on the competition. We also have a list of current small-cap and penny stocks that you can buy.
Overview
The volatility the stock market is experiencing in 2022 is causing a significant decline in stock prices. This has led to a large number of high-quality firms opening up a few windows of opportunity for long-term investors to purchase and invest in cheap stocks. Investors who are on the lookout for the best cheap stocks to invest in may now find themselves sifting through a large number of poor choices. Although a low stock price is frequently an indication that a firm is struggling, making a stock a dangerous gamble, there are some hidden penny stocks with great potential that you can buy now even with the drop.
Cheap Stocks to Invest in, in 2023
Investors who are seeking a safe haven in the face of growing inflation, rate hikes from the Federal Reserve, the possibility of stagflation, and a prolonged war sometimes look to invest in cheap stocks with a consistent payout. This is a way to secure a stable income that might bring peace of mind during times of market volatility and the possibility of a recession.
When there is a lot of uncertainty, investors always want to diversify their holdings and invest in the best available cheap stocks. But investors with less capital on hand may have difficulty diversifying their portfolios with stocks due to the high cost of yielding aristocrats, which may be upwards of $500 per share.
However, there are some top cheap stocks you can invest in. They cover a wide range of industries, from gold to semiconductors to beverage and packaging companies. This allows investors to select and invest in cheap stocks that best suit their investment approach while still generating stable yields.
#1. Microsoft Corp. (MSFT)
Trailing 3-Year Annualized EPS: +28.6%
Trailing 3-Year Annualized Revenue: +15.1%
Forward 5-Year Annualized EPS Estimate: +16.2%
Anyone who is familiar with the stock market or a personal computer does not require an introduction to learn about Microsoft. Although some of the other stocks on this list that you can invest in are not so popular, Microsoft could be an attractive option for investors seeking a blue-chip “buy the dip” company.
The corporation, with a market cap of $2 trillion, has shown little sign of slowing down, despite its mega-cap size and dominant position in the technology industry. The annual increase in MSFT’s EPS was basically driven by the company’s average revenue growth of 16.3% per year. This has resulted in an increase over the past three years of an average of 29%.
The value of a share in Microsoft Corporation has also more than 300% increased over the past five years. However, the current drop in MSFT’s price of 22% from its high in November is an opportunity to invest in the stock at a cheap price. This is the most significant loss in MSFT’s stock price since 2010, surpassing even the drop of the early phases of the COVID-19 epidemic in early 2020. Basically, the dividend yield as of right now is at 0.9%.
#2. Ubiquiti Inc. (UI)
Trailing 3-Year Annualized EPS: +16.8%
Trailing 3-Year Annualized Revenue: +23.1%
Forward 5-Year Annualized EPS Estimate: +23.9%
Internet service providers, in general, rely on Ubiquiti’s wireless and network technology to run their businesses. Since 2018, the communication equipment company has been experiencing an increase in both its annual earnings and its overall revenue.
The share price has increased by 470% over the past five years. UI is currently trading at a price roughly 30% lower than in March 2021. At that time, it had reached its all-time high. The magnitude of the most recent drop is consistent with favorable entry locations depending on previous data.
If you plan to invest in Ubiquiti stocks, anticipate these coming years; growth in earnings per share of 35%. You can also anticipate an average annual growth rate of 24% for the next five years. In the event that this scenario plays out according to your plan, the firm with a market capitalization of $15 billion will exhibit growth. One that is even more amazing than what it has demonstrated in the most recent few years.
Since 2014, Ubiquity has been increasing the number of dividends it pays out to people that invest in its stocks on an annual basis. The dividend yield as of right now is at 0.9%.
#3. Chipotle Mexican Grill, Inc. (CMG)
Trailing 3-Year Annualized EPS: +48.7%
Trailing 3-Year Annualized Revenue: +15.8%
Forward 5-Year Annualized EPS Estimate: +27.2%
Chipotle is a fast-food chain and one of the most popular restaurants in the United States. Over the previous five years, the company’s burritos and bowls have powered a stock gain of 189%. Plus, that doesn’t even take into account the 30% drop from the all-time high in September 2021.
Meanwhile, you should be aware that the $39 billion corporations have had a wild ride during the last decade. In 2012, the stock plummeted by 47%, sank by 66% between 2015 and early 2018, and declined by 55% in early 2020.
Investing in CMG at this point could be advantageous for long-term investors. However, a further 10% to 20% decrease will not be out of the ordinary. In other words, stock prices, earnings, and sales are all rising over the long run.
Furthermore, during the last three years, Chipotle’s earnings and revenue have grown at a tremendous rate of 49% and 16%, respectively. According to analysts, investors planning to invest in Chipotle’s stocks should expect a 27% annual EPS growth rate over the next five years.
Hence, it is important to note that CMG does not distribute any dividends to its shareholders.
#4. Monolithic Power Systems, Inc. (MPWR)
Trailing 3-Year Annualized EPS: +28.86
Trailing 3-Year Annualized Revenue: +27.5%
Forward 5-Year Annualized EPS Estimate: +25%
Monolithic Power Systems are manufacturers of integrated circuits. These circuits are utilized to manage power in a variety of electronic systems. Manufacturers make use of monolithic chips by installing them in products so as to minimize the amount of electricity those products use.
MPWR is currently trading around 20% behind its all-time high of $580 in November of last year, despite a 373% gain in the past five years. As the stock’s most recent loss is the largest in the stock’s 10-year history, this could be a good time to invest in the dip.
Since 2015, MPWR’s earnings and revenue have grown each year. In the last three years, annual EPS growth averaged 33% and annual sales growth averaged 31%.
Over the same time period, the S&P 500’s median EPS growth was 12%. This indicates that this $22 billion firm is expanding its earnings at a rate that is two times higher than the market average.
Over the next five years, experts also project Monolithic’s earnings to expand at a rate of 25% each year (but only 18.3% EPS growth in 2023). Stock prices tend to rise over time when future earnings growth is predicted to be this high.
An annual dividend yield of 0.7% is offered by MPWR. Since 2017, the company has grown its dividend payout annually, and this trend is expected to continue through 2022.
#5. ASML Holding NV (ASML)
Trailing 3-Year Annualized EPS: +31.5%
Trailing 3-Year Annualized Revenue: +19.4%
Forward 5-Year Annualized EPS Estimate: +29.8%
ASML is a Dutch company that designs and manufactures microchip manufacturing technology. Samsung Electronics, Intel, and Taiwan Semiconductor are just a few of its main customers.
Over the previous five years, ASML’s shares have risen by a total of 338%. However, the current price is 37% lower than its all-time high of $895.93 per share in September 2021.
Most of ASML’s stock drops have been less than 45%, with the exception of a 60% drop in 2008. Historically, buying ASML on a 30% or higher decline is always a solid long-term gateway for investors.
For at least the past five years, the $231 billion semiconductor equipment manufacturer has seen growth in its average yearly earnings and revenue. Analysts predict annual rises in the 30% range for the next five years, so growth should continue to be strong.
ASML distributes a dividend, which has steadily grown over the past ten years. The current yield on dividends is 1.1.
#6. Deckers Outdoor Corp. (DECK)
Trailing 3-Year Annualized EPS: +22.5%
Trailing 3-Year Annualized Revenue: +15.9%
Forward 5-Year Annualized EPS Estimate: +16.3%
Deckers manufactures and sells apparel and footwear. Generally, customers can buy Deckers products directly from the company as well as through wholesale channels. Deckers is basically a United States-based company, although it also has operations all around the world.
During the past five years, DECK stock has gained a total of 281% despite an almost 40% drop from its September 2021 all-time high.
As a result of a 40% to 50% decline from earlier highs, investors now have historically solid long-term entry positions to invest in the decline, even if the stock has lost up to 75% in the past (2008 and 2012).
Since 2016, Deckers has seen year-over-year revenue and earnings per share (EPS) growth rates of above 15%. Likewise, over the next five years, analysts estimate an average annual EPS growth rate of 16%.
A greater price-to-earnings ratio (P/E ratio) indicates that investors are willing to pay a higher price for the expectation that a company’s earnings will expand significantly in the future. P/E ratios for the $7 billion currently stand at 16.6 and 14.06, respectively.
Deckers does not distribute any dividends.
#7. EPAM Systems, Inc. (EPAM)
Trailing 3-Year Annualized EPS: +23.4%
Trailing 3-Year Annualized Revenue: +26.8%
Forward 5-Year Annualized EPS Estimate: +18.7%
With offices in more than 45 countries, EPAM Systems is a leading provider of software engineering and design services.
One of the worst-hit stocks in the recent market sell-off is EPAM’s stock. EPM was down as much as 76% from its November 2021 peak in March of this year. After a brief resurgence, it’s now more than half the distance down from its November apex.
Despite the recent collapse, the $19 billion IT company has gained 311% in the last five years.
After going public in 2012, this is the first time the stock has fallen this much. Even though the scale of the decline is fairly severe, from a historical viewpoint, it could still present a favorable entry point for investors looking for stocks to invest in. This is a result of the company’s compelling growth story.
Over the last five years, the company has consistently increased its annual revenue and profit. Both the EPS and sales growth over the past three years have averaged over 23%. Over the next five years, experts expect annual revenue growth to be close to 19%.
When it comes to paying out dividends, EPAM does not deliver.
#8. Medifast, Inc. (MED)
Trailing 3-Year Annualized EPS: +38.2%
Trailing 3-Year Annualized Revenue: +45%
Forward 5-Year Annualized EPS Estimate: +20%
Medifast is based on manufacturing products for weight loss and healthy living. Individuals eager to lose weight have fostered the $2 billion company’s boom.
However, MED’s stock can fluctuate a lot, but the profits have been substantial. In the last five years, the stock has gained 346%, even after the firm’s 50% May 2021 all-time high declines.
Since 2018, the company’s total revenue has tripled, with an annual growth rate of more than 38% over the past three years. Growth is expected to remain at a healthy 20% annual rate for the next five years, according to analysts.
Medifast has a P/E ratio of 13.1 and a projected P/E ratio of 9.9, which is unusual for growth firms. It’s a better investment than DECK at this time.
At the time of this writing, Medifast has the highest dividend in this list, with a yield of 3.6%. Since 2015, dividend payments have grown each year.
#9. Intuit Inc. (INTU)
Trailing 3-Year Annualized EPS: +17.5%
Trailing 3-Year Annualized Revenue: +17.3%
Forward 5-Year Annualized EPS Estimate: +17.5%
Intuit is a software business that specializes in accounting and tax software, such as QuickBooks and TurboTax.
Its shares have returned 195% over the past five years. However, INTU has lately plummeted more than 50% from its November 2021 all-time high, which is the largest decrease since 2001 for the stock.
The $116 billion software giant’s earnings and sales have risen steadily since 2015. Analysts estimate EPS growth of 17.5% each year for the next five years based on three-year average sales and EPS growth of 25 % and 17.5 %.
While experiencing an annual dividend increase for the past decade, Intuit’s current dividend yield is 0.7%
Penny Stocks to Buy Now
Trying to take advantage of a falling market is not a straightforward trading strategy, and even when you do, you will need to be very careful. But if you play your cards right, you might be able to buy penny stocks now and get a big discount on them. Here, we are talking about stocks that will give you strong basics and good prospects for the future. Imagine that you can buy shares of good companies at a discount.
Even though it is an indisputable fact that a large number of strong businesses suffer losses due to temporary declines in market conditions, they usually do quite well in the long run. When selecting, you can choose among the frontrunners that enjoy the market’s rewards with higher prices after a drop. However, you will have to know the quality measures to track in order to find good penny stocks to buy now. This will increase your chances of discovering penny stocks to buy now.
Over the past few months, the S&P 500 and other major stock indices have all experienced a downward trend. As a result, there are now a number of penny stocks available to buy at attractive prices.
While the prices of some penny stocks you can buy now may not have moved yet, others trade in the single digits because their operational histories are either problematic or ambiguous. The truth is, most of the listed companies below are yet to make their mark and establish a strong reputation. Hence, you should try to consult with your financial advisor before you decide to invest in any of them.
Best Penny Stocks to Buy Now in 2023
Here is the list of the penny stocks you can buy now with the potential to grow;
| Company Name & Symbol | Stock YTD % Change | Sector | Price |
| Ares Capital (ARCC) | -15.02% | Asset Management | $17.95 |
| Alliance Resource Partners (ARLP) | +43.75% | Thermal Coal | $18.17 |
| American Vanguard Corp. (AVD) | +37.77% | Agricultural Inputs | $22.58 |
| BlackRock TCP Capital Corp. (TCPC) | -8.86% | Asset Management | $12.30 |
| Beazer Homes USA Inc. (BZH) | -44.79% | Residential Construction | $12.82 |
| Catalyst Pharmaceuticals Inc. (CPRX) | -3.84% | Biotechnology | $6.51 |
| Costamare Inc. (CMRE) | +1.69% | Marine Shipping | $12.46 |
| The Duckhorn Portfolio Inc. (NAPA) | -15.64% | Beverages Wineries and Distilleries | $19.69 |
| Energy Transfer (ET) | +30.26% | Oil and Gas Midstream | $10.72 |
| Ebix Inc. (EBIX) | -23.03% | Software Application | $23.40 |
| The Hackett Group (HCKT) | -7.70% | Information Technology Services | $18.57 |
| Karat Packaging Inc. (KRT) | -4.75% | Packaging and Containers | $19.47 |
| Mattel Inc. (MAT) | +2.92% | Leisure | $21.38 |
| Meridian BIosciences Inc. (VIVO) | +32.89% | Diagnostics and Research | $27.11 |
| Natural Grocers by Vitamin Cottage Inc. (NGVC) | +20.07% | Grocery Stores | $17.11 |
| NexPoint Real Estate Finance Inc. (NREF) | +4.94% | REIT Diversified | $20.20 |
| Radiant Logistics Inc. (RLGT) | -5.76% | Integrated Freight and Logistics | $6.87 |
| Ramaco Resources Inc. (METC) | +21.03% | Coking Coal | $16.46 |
| SSR Mining Inc. (SSRM) | +4.35% | Gold | $18.47 |
| Univar Solutions Inc. (UNVR) | +5.26% | Chemicals | $29.84 |
| Vector Group (VGR) | -5.49% | Tobacco | $10.85 |
Small Investment Stocks
The volatility the US stock market is experiencing can be attributed to several factors, including political upheaval in Europe, rising crude oil costs, and concerns about inflation.
Having said that, this can occasionally result in firms being undervalued. This might present opportunities for investors looking for small investment stocks to invest in or buy at a penny
Nevertheless, below are some of the small investment stocks you can invest in at a cheap price but comes with a high potential to grow;
- Tenable Holdings (TENB)
- Altice USA (ATUS)
- Millicom International Cellular (TIGO)
- Rocket Companies (RKT)
- Hanesbrands (HBI)
- Chart Industries (GTLS)
- Boston Beer (SAM)
- Asbury Automotive (ABG)
- Coursera (COUR
- Nordstrom (JWN)
- Malibu Boats (MBUU)
- Health Catalyst (HCAT)
- Equitrans Midstream (ETRN)
- Adient (ADNT)
Conclusion
The volatile market is causing a significant decline in stock prices and has led to a large number of high-quality firms opening up a few windows of opportunity for long-term investors to purchase and invest in cheap stocks. A low stock price is frequently an indication that a firm is struggling, making a stock a dangerous gamble.
Therefore, it is not always sufficient to simply concentrate on stocks experiencing price falls in an attempt to discover amazing or discount deals for long-term investing. Rather, one needs to focus on businesses with strong growth and momentum, dominance in the market, and advantageous headwinds.
Cheap Stocks To Invest In FAQs
Is it a good tme to buy equities with a long-term investment horizon?
Generally, when you look at the stock market from a long-term perspective and appropriately diversify your investment portfolio, there is almost never a bad time to put money into the market.
Is it a good idea to put money into stocks with a smaller market cap?
Basically, if you are willing to retain an investment for several years and are comfortable with the stock price moving considerably, small-cap stocks may be a good fit for your portfolio. In addition, if you stick to a buy-and-hold investment approach, small-cap stocks can enhance your portfolio’s total growth rate.
How do new investors invest in stocks with small money?
Investing through online investing accounts, which can be used to purchase individual stocks or mutual funds, is a great method for new investors to get their feet wet in the stock market.
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