- (1:00) – Is it a good time for small cap investments?
- (9:45) – Tracey’s Top Stock Picks
- (26:30) – Episode recap: RAIL, FNKO, HRTG, KVHI, TWI
- [email protected]
Welcome to episode #277 of the Value Investor podcast.
Each week, Zacks Value Investor Portfolio Editor Tracey Ryniec shares some of her top investing tips and stock picks.
What investor doesn’t like to buy a “cheap” stock? One that costs less than $20?
Stocks under $20 just seem more fun and if you can get one that actually has low valuations based on a P/E or P/S ratio, even better.
Adding the Zacks ranks of #1 (Strong Buy) and #2 (Buy) should also get you higher earnings estimates, which is hard to come by in 2022.
Tracey screened stocks under $20 with a P/S ratio below 1 and a top Zacks ranking along with positive earnings.
He produced 31 titles.
4 Stocks Worth Under $20 With Top Zacks Rankings
BBQ Holdings operates 316 restaurants, including 23 shadow kitchens, across the United States. His brands include Famous Dave’s of America, Bakers Square and he just bought the Barrio Queen, a Phoenix-based chain with 7 restaurants.
In the fourth quarter, BBQ Holdings saw same-store sales increase 15.5% over 2019 for company-owned Famous Dave’s locations and 18.8% for franchisees. The strong activity continued in March 2022, after a slowdown due to Omicron in January and February 2022.
Stocks are down 3.9% year-to-date and are cheap, with a forward P/E of 12.7. Still, profits are expected to rise 66% this year.
Should BBQ Holdings be on your watch list?
2. ET energy transfer
Energy Transfer is an energy company that transports and stores natural gas, natural gas liquids, crude and refined products. It is a master limited partnership that currently pays a dividend of 6.2%.
Energy Transfer is a Zacks Rank #1 (Strong Buy).
Stocks are up 38.5% year-to-date but remain cheap with a P/S ratio of just 0.5.
Is energy transfer a boon?
3. Hewlett Packard Enterprises HPE
Hewlett Packard Enterprises is a technology company that offers cloud services, high performance computing and AI, software and storage.
In March 2022, Hewlett Packard Enterprises released its fiscal first quarter 2022 results and saw strong customer demand that led to 20% year-over-year order growth.
It reaffirmed its full-year revenue guidance, but raised its EPS guidance.
Hewlett Packard Enterprises expects free cash flow for fiscal 2022 to be between $1.8 billion and $2 billion.
It pays a dividend, earns 3.1% and buys back shares. Hewlett Packard Enterprises is cheap, with a forward P/E of just 7.3.
But don’t confuse it with HP Inc. HPQ. HP Inc. is the hardware company, which manufactures computers and printers.
Warren Buffett’s Berkshire Hathaway recently took a $4 billion position in HP Inc. It also pays a dividend, yielding 2.6%. But HP Inc is not less than $20 while Hewlett Packard Enterprises is.
Did Buffet buy the wrong company? Should Berkshire have bought Hewlett Packard Enterprises, and it’s cheap free cash flow instead?
4. Bassett Furniture BSET
Bassett Furniture is a furniture manufacturer that operates 96 stores and also sells wholesale. Furniture has been hot during the pandemic and Bassett continued to strengthen in the first quarter of 2022.
Revenue increased 16% in the first quarter as Bassett Furniture continued to process its backlog.
However, inflationary pressures present a challenge. Bassett said all raw materials involved in furniture production continued to rise in the quarter. As a result, it implemented its sixth wholesale price increase in the past 15 months.
Over the past year, shares have fallen 33.7% on fears that 2021 will be a “peak” in profits.
Bassett is cheap, with a forward P/E of 8.9. It also pays a dividend, which now yields 3.3%.
Is Bassett Furniture oversold in 2022?
What else should you know about stocks valued below $20?
Tune into this week’s podcast to find out.
Just Released: Zacks Top 10 Stocks for 2022
In addition to the investment ideas discussed above, would you like to know our top 10 picks for all of 2022?
From its creation in 2012 to 2021, the Zacks Top 10 Stocks portfolios gained an impressive +1,001.2% vs. +348.7% for the S&P 500. Now our research director has combed through 4,000 companies covered by the Zacks Ranking and selected the top 10 tickers to buy and keep. Don’t miss your chance to enter…because the sooner you do, the better your chances of winning.
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HP Inc. (HPQ): Free Inventory Analysis Report
Energy Transfer LP (ET): Free Stock Analysis Report
Hewlett Packard Enterprise Company (HPE): Free Inventory Analysis Report
Bassett Furniture Industries, Incorporated (BSET): Free Inventory Analysis Report
BBQ Holdings, Inc. (BBQ): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.