12 Best Affordable Stocks Under $30
In this article, we discuss 12 best affordable stocks under $30. If you want to skip our detailed discussion about the stock market performance in 2023, head directly to 5 Best Affordable Stocks Under $30.
According to BlackRock, the stock market has performed better than the initial estimates for the year. Previously, investors had expressed concerns about the market performance in 2023. However, so far, the equity market has fought off banking pressures, a risk for recession, and the Federal Reserve’s restrictive monetary policy and outperformed estimations. Recently, the tech industry has been the star of the show. With AI-based innovation leading the tech industry, the market has exhibited strong returns. This was further aided by the Federal Reserve’s efforts to normalize inflation during the year. Altogether, experts see the market moving towards a ‘soft-landing’, whereby growth stabilizes and inflation is maintained close to the targeted rate. Similar to the time between 2015 and 2019, this calls for a preference for growth, with technology and consumer discretionary stocks being the star performers. All this has led to an increase in the S&P 500 index gaining close to 16% and the NASDAQ Composite to increase by nearly 30% year-to-date as of August 18. However, despite the performance so far, the economy gives off mixed signals for the future.
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While the initial estimates for the probability of a recession this year have certainly improved, according to the Federal Reserve, their model still calculates a 71% chance for a recession by May 2024, which is the highest since 1982. Despite this, consumer spending and the performance of the labor market continues to be promising. The government’s efforts to counter the inflationary pressure is one of the leading factors for a better performance in the equity market. In 2022, the consumer price index had surged to 9.1%. Although the Federal Reserve hopes to achieve a long-term target of 2%, it was successful in bringing it as low as 3% by June this year.
In 2022, Michael Gapen, the chief U.S. economist at Bank of America, expected unemployment and inflation rates to induce a mild recession by 2023. However, as the unemployment rate was reported at just 3.5% in July this year, Mr. Gapen had this to say about the new incoming data about the United States economy:
"We revise our outlook in favor of a 'soft landing' where growth falls below trend in 2024, but remains positive throughout."
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Another major contributor for the market performance has been consumer spending. Given the increased cost of borrowing and the rates of unemployment that were expected initially, consumer spending was forecasted to tighten. During unemployment, households tend to save more. However, with the labor market performing better than estimates, consumer spending is on the rise. In fact, the consumer discretionary sector has reported the highest earnings growth in the second quarter, with the earnings per share rising by about 36% from the previous year.
Although the market has exhibited resilience against the recessionary pressure, many investors still appear to have taken a rather cynical approach to the future. Brian Moynihan, the CEO for Bank of America, believes that a recession might be inevitable during the next year. Similarly, Vanguard economists reported that the market performance this year has, in essence, delayed the inevitable recession to the next year. In line with this, JPMorgan Chase expects a global slow-down by 2024. In contrast, investor sentiment seems to remain strong. Seemingly, the risk appetite appears to be rising as well, as the Russell 2000 Index, which focuses on small cap stocks, is up by roughly 7% this year.
While the current market performance can be a motivator for beginner investors to consider investing in stocks, the recessionary pressures are forecasted to only strengthen. Ergo, investors looking to minimize risk by investing in affordable stocks can check our list of picks, which includes Warner Bros. Discovery, Inc. (NASDAQ:WBD), Pinterest, Inc. (NYSE:PINS), and AT&T Inc. (NYSE:T).
Our Methodology
We used a stock screener and filtered out stocks that were under $30 as of August 18. We sorted the resultant stocks in the descending order of their market cap to filter out small companies which have volatile performance and are not an appropriate indicator of the market performance overall. Then, we sorted these stocks based on hedge fund sentiment for the second quarter of 2023. The following stocks are arranged in the ascending order of their hedge fund sentiment.
Photo by lucas Favre on Unsplash
Best Affordable Stocks Under $30
12. The AES Corporation (NYSE:AES)
Number of Hedge Fund Holders: 36
Share Price as of August 18: $18.01
The AES Corporation (NYSE:AES) is a power generation company in the United States. It operates power plants and provides electricity to residential, industrial, and commercial consumers. On August 3, The AES Corporation (NYSE:AES) announced a non-GAAP EPS of $0.21 and a revenue of $3.03 billion. Along with this, the company also distributed a quarterly dividend per share of $0.1659 on August 15.
According to Insider Monkey’s second quarter database, a total of 36 hedge funds were bullish on The AES Corporation (NYSE:AES), as opposed to 44 in the previous quarter. William B. Gray’s Orbis Investment Management held the largest position in The AES Corporation (NYSE:AES), with 18 million shares worth $373.2 million.
Similar to Warner Bros. Discovery, Inc. (NASDAQ:WBD), Pinterest, Inc. (NYSE:PINS), and AT&T Inc. (NYSE:T), The AES Corporation (NYSE:AES) is one of the best affordable stocks under $30.
Massif Capital had this to say about The AES Corporation (NYSE:AES) in its second quarter 2023 investor letter:
“Currently, the portfolio has roughly 11% allocated across two utilities, The AES Corporation (NYSE:AES) and Polaris Renewable Energy. In the case of both equities, we have experienced disappointing 2023 market results, and in the case of AES, it is the long-book’s worst performer YTD, dragging down the overall portfolio by -2.09%. Polaris contributed a positive return of 0.21%. These two positions represent investments in similar assets but very different businesses, which explains much of the divergence in this year’s results.
In the case of AES, we have a heavily US-focused utility with significant exposure to regulated and unregulated markets and a significant commitment to building out renewable energy. The firm also has some exposure to electricity markets in South America and exposure to electricity storage markets in the form of its ownership stake in Fluence (FLNC). Despite being one of the larger US utilities, the firm has trailed the sector (as measured by the IXUTR Index) dramatically this year…” (Click here to read the full text)
11. Antero Resources Corporation (NYSE:AR)
Number of Hedge Fund Holders: 38
Share Price as of August 18: $27.09
Antero Resources Corporation (NYSE:AR) is an oil and natural gas exploration company in the United States. It focuses on the discovery, acquisition, operation, and distribution of natural gas and other related products. On July 26, Antero Resources Corporation (NYSE:AR) reported a Q2 revenue of $953.3 million, which outperformed expectations by $16.3 million. The $0.28 GAAP loss per share came in line with market estimates.
According to Insider Monkey’s second quarter database, 38 hedge funds were bullish on Antero Resources Corporation (NYSE:AR). During the past quarter, 42 hedge funds had invested in the company. Phill Gross and Robert Atchinson’s Adage Capital Management is the biggest shareholder in the company, with 4.15 million shares worth $95.6 million.
Carillon Eagle Mid Cap Growth Fund made the following comment about Antero Resources Corporation (NYSE:AR) in its Q1 2023 investor letter:
“Antero Resources Corporation (NYSE:AR) is a natural gas exploration and production company with operations in the Appalachian Basin. Overall natural gas storage inventories recently have reached slightly elevated levels, due largely to the milder than average winter experienced across the globe. This dynamic has weighed on benchmark natural gas prices, and in turn has pressured Antero’s stock. Despite these current headwinds, we believe the company’s relatively low-cost operations, strong balance sheet, positive recent productivity trends, and ability to price its production at a premium to benchmark prices should position it well to weather the current choppy environment until the country’s liquified natural gas export capacity increases over the next several years.”
10. Clarivate Plc (NYSE:CLVT)
Number of Hedge Fund Holders: 39
Share Price as of August 18: $7.09
Clarivate Plc (NYSE:CLVT) operates as a data analytics company that offers solutions in scientific research and innovation. This includes providing subscription services to three major segments – Academia and Government, Life Sciences and Healthcare, and Intellectual Property. On August 3, Clarivate Plc (NYSE:CLVT) reported a Q2 revenue of $668.8 million and a non-GAAP EPS of $0.21. While the revenue fell short of estimates by $5.3 million, the EPS outperformed by $0.01. Clarivate Plc (NYSE:CLVT) is one of the best affordable stocks to buy.
According to Insider Monkey’s second quarter database, a total of 39 hedge funds were bullish on Clarivate Plc (NYSE:CLVT). In comparison, 45 hedge funds had invested in the company during the last quarter. Leonard Green’s Leonard Green & Partners held the highest stake in Clarivate Plc (NYSE:CLVT), with 116.6 million shares worth $1.11 billion.
Baron Small Cap Fund said this about Clarivate Plc (NYSE:CLVT) in its first quarter 2023 investor letter:
“We added to our position in Clarivate Plc (NYSE:CLVT), a leading global information services provider that serves customers across academia and government, life sciences & health care, and intellectual property. Clarivate goes to market with a collection of well-known brands, including Web of Science, ProQuest One, Alma, Cortellis, Derwent, and CompuMark.
Clarivate has an attractive business model. The company’s foundation is its highly valuable proprietary data assets (#1 or #2 player in most markets) that are combined with analytical tools and insights to help users apply the underlying data to everyday business problems. As an important part of the end users’ daily workflow, Clarivate’s indispensable, mission-critical solutions create a sticky and predictable business model with high levels of recurring revenue (about 80% recurring revenue and over 90% renewal rates). Clarivate has strong operating leverage (“build it once, sell it many times”) and should be able to sustain adjusted EBITDA margins in the low to mid-40% range…” (Click here to read the full text)
9. ZoomInfo Technologies Inc. (NASDAQ:ZI)
Number of Hedge Fund Holders: 42
Share Price as of August 18: $17.43
ZoomInfo Technologies Inc. (NASDAQ:ZI) is a software and data company that provides market intelligence platforms for businesses. On July 31, ZoomInfo Technologies Inc. (NASDAQ:ZI) announced a Q2 revenue of $308.6 million, falling short of estimates by $2.49 million. In contrast, the non-GAAP EPS of $0.26 surpassed estimates by $0.03. It is one of the best affordable stocks to monitor.
According to Insider Monkey’s second quarter database, 42 hedge funds were bullish on ZoomInfo Technologies Inc. (NASDAQ:ZI), compared to 40 hedge funds in the preceding quarter. Mick Hellman’s HMI Capital held the largest position in the company, with 10.7 million shares worth $274.01 million.
Artisan Mid Cap Fund had this to say about ZoomInfo Technologies Inc. (NASDAQ:ZI) in its first quarter 2023 investor letter:
“We ended our investment campaigns in BILL Holdings, ZoomInfo Technologies Inc. (NASDAQ:ZI) and First Republic Bank during the quarter. ZoomInfo is a leading provider of contact databases and associated marketing automation tools for business-to-business sellers. Our thesis was that the company’s combination of data, insights and digital tools was being well received by companies looking to increase sales force productivity and enhance the returns on their substantial customer relationship management (CRM) software investments. However, we have grown increasingly skeptical about the durability of its top-line growth in a challenging economic environment as customers potentially look to cut costs and the company is unproven in a downturn. Given these concerns, we decided to harvest the position.”
8. Marathon Oil Corporation (NYSE:MRO)
Number of Hedge Fund Holders: 43
Share Price as of August 18: $26.39
Marathon Oil Corporation (NYSE:MRO) is an oil exploration company that operates in the United States. The company works on the exploration, operation, supply, and commercialization of oil and natural gas. On August 2, Marathon Oil Corporation (NYSE:MRO) announced a Q2 revenue of $1.51 billion, along with a non-GAAP EPS of $0.48. While the EPS was consistent with estimates, the revenue fell short by $20 million. Additionally, the company also declared a dividend per share of $0.10 on July 10, which is payable September 11 to shareholders of record as of August 16. Marathon Oil Corporation (NYSE:MRO) is one of the best affordable stocks to monitor.
According to Insider Monkey’s second quarter database, 43 hedge funds were long Marathon Oil Corporation (NYSE:MRO), compared to 45 funds during the previous quarter. Steve Cohen’s Point72 Asset Management holds the largest stake in the company, with 5.9 million shares worth $136.7 million.
This is what Carillon Clarivest Capital Appreciation Fund has to say about Marathon Oil Corporation (NYSE:MRO) in its Q1 2022 investor letter:
“Stock selection contributed the most while sector allocation was also positive. An underweight to communication services and an overweight to energy helped performance, while an underweight to consumer staples and an overweight to materials detracted. Stock selection was strong within healthcare and materials but was weak within information technology and industrials. Marathon Oil (NYSE:MRO) increased its quarterly dividend and executed an impressive share buyback that blew by the target it originally announced.”
7. The Liberty SiriusXM Group (NASDAQ:LSXMK)
Number of Hedge Fund Holders: 46
Share Price as of August 18: $23.80
Next on our list of the best affordable stocks is The Liberty SiriusXM Group (NASDAQ:LSXMK), which is an entertainment company that operates podcasts, music, sports, weather, traffic, and infotainment channels. On August 5, Liberty SiriusXM Group reported a Q2 revenue of $2.25 billion, falling short of market estimates by $10 million.
According to Insider Monkey’s second quarter database, 46 hedge funds were bullish on The Liberty SiriusXM Group (NASDAQ:LSXMK), compared to 47 in the previous quarter. Warren Buffett’s Berkshire Hathaway is the largest position holder in the company, with 43.2 million shares worth $1.41 billion.
Weitz Partners III Opportunity Fund made the following comment about The Liberty SiriusXM Group (NASDAQ:LSXMA) in its second quarter 2023 investor letter:
“The Fund’s year-to-date detractor list includes both our S&P 500 ETF short and Perimeter Solutions, but the list is otherwise populated by first-quarter poor performers. Fidelity National Information Services (FIS) delivered a modestly positive return in the second quarter, while The Liberty SiriusXM Group (NASDAQ:LSXMA) rebounded sharply, likely due to its upcoming recapitalization. In August, Liberty SiriusXM will move its 30% stake in concert promotion and ticketing firm Live Nation Entertainment, Inc. (LYV) to a new tracking stock (Liberty Live Group), leaving Liberty SiriusXM shares as a “pure play” tracker of its 82% ownership of satellite radio provider SiriusXM Holdings, Inc. (SIRI). We intend to own both trackers upon receipt, and we believe the clearer structure may lead investors to reduce the current, large mark-to-market discount between Liberty SiriusXM and its underlying SiriusXM shares.”
6. Ally Financial Inc. (NYSE:ALLY)
Number of Hedge Fund Holders: 46
Share Price as of August 18: $27.23
Ally Financial Inc. (NYSE:ALLY) is a digital financial company that offers financing solutions for commercial, consumer, and corporate customers. This includes services such as insurance and auto-financing. On July 17, Ally Financial Inc. (NYSE:ALLY) announced a Q2 revenue of $2.08 billion and a non-GAAP EPS of $0.96. While the EPS surpassed the market consensus by $0.02, the reported revenue fell short by $10 million.
According to Insider Monkey’s second quarter database, 46 hedge funds were bullish on Ally Financial Inc. (NYSE:ALLY), in contrast to 48 hedge funds in the past quarter. Warren Buffett’s Berkshire Hathaway held the highest stake in the company, with 29 million shares worth $783.3 million.
Similar to Warner Bros. Discovery, Inc. (NASDAQ:WBD), Pinterest, Inc. (NYSE:PINS), and AT&T Inc. (NYSE:T), Ally Financial Inc. (NYSE:ALLY) is one of the best affordable stocks under $30.
Silver Beech Capital had this to say about Ally Financial Inc. (NYSE:ALLY) in its Q1 2023 investor letter:
“Ally Financial Inc. (NYSE:ALLY) is the largest all-digital bank in the United States, the 22nd largest bank by total assets ($192 billion), the nation’s leading prime auto lender (with 6.5 million consumer customers), and leading auto floor plan lender (with over 23,000 dealer relationships). Most of Ally’s assets are auto loans and finance receivables, but Ally also offers consumer protection insurance through its dealer channels and operates small corporate and mortgage lending businesses. Notably, Ally also offers some of the industry’s most competitive deposit products: Ally was awarded “Best Checking Account”, “Best Saving Account”, and overall “Best Online Bank” by third party reviews and was the first large bank to eliminate overdraft fees. We believe Ally’s intrinsic value is more than 40% greater than its March 31 share price.
Ally evolved from the auto finance unit of GMAC, emerged from GMAC’s restructuring as a bank holding company and rebranded, before going public in 2014. Since then, Ally has transformed itself from a wholesale-funded, captive finance company into a full-service retail-funded automotive finance and insurance provider by steadily gaining retail deposit market share. Today, Ally’s balance sheet is 85% funded (versus 43% funded in 2014) by $152 billion of deposits (versus $58 billion in 2014) across 4.4 million depositors (versus 900k depositors in 2014). Over 90% of Ally’s deposits are FDIC insured, more than any other $100+ billion asset bank in the United States. Ally’s massive insured deposit base is stickier and more resilient to depositor fear of a bank run than other regional banks…”(Click here to read the full text)
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Disclosure: None. 12 Best Affordable Stocks Under $30 is originally published on Insider Monkey.
