Wall Street Favorites: 7 Under-$20 Stocks With Strong Buy Ratings for March 2024
Finding strong buy stocks under-$20 takes a little effort, but it’s well worth it. Many of the stocks at this price level are small-cap stocks. But you’ll also find mid-cap and large-cap stocks.
One of the key benefits for finding stocks under $20 is that they are affordable to a wider range of investors. But this is where you have to remember that there’s a difference between price and value. Sometimes stocks are priced below $20 because they’re tapped out on growth.
But when you can find strong buy stocks under-$20, you get stocks that offer the opportunity for stock price growth and, in many cases, an appealing dividend.
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Another benefit of buying strong buy stocks under $20 is, at this price level, these stocks generally have more price stability than penny stocks, but more growth opportunity than what you may get from higher-priced stocks.
Infosys (INFY)
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Infosys (NYSE:INFY) is a way to invest in the popularity of India as an emerging market opportunity. Reuters reported that India-focused exchange-traded funds (ETFs) with an India focus saw a record inflow of $8.6 billion in 2023. And Infosys is one of the top holdings in many of the India-focused ETFs.
Infosys provides consulting, technology, outsourcing, and next-gen digital servics. The company generates a significant amount of revenue from U.S. companies looking to outsource their information technology work. This work leads to sticky revenue as evidenced by the company’s low attrition rate of just 15%.
However, steady revenue and earnings is not the same as a revenue and earnings growth. And the rise of AI is a potential threat. But a top Infosys executive recently said that cost considerations may force companies to delay the implementation of AI in 2024.
Analysts have a consensus price target of $20.16 which is only about 2% above the INFY stock closing price on March 14. Nevertheless, 23 out of 46 analysts have a Strong Buy rating on the stock.
Carnival (CCL)
Carnival (NYSE:CCL) has been on a comeback tour with CCL stock up 78% in the last 12 months. However, it hasn’t been smooth sailing for Carnival in 2024 with the stock down 12%. Concerns abound about how long the U.S. consumer can hold up.
Concerns about holding up also weighing on Carnival, which is in the midst of paying down the substantial debt it added in 2020. Fortunately, as of December 2023, the cruise line was reporting record high occupancy rates. That’s a key reason that revenue in 2023 was back to 2019 levels. However, earnings are still negative and even though Carnival expects that to change in 2024, it will take time for profits to get back to 2019 levels.
Analysts have a 20.88 consensus price target on CCL stock. And 24 out of 36 analysts give the stock a Strong Buy rating. It’s one of those strong buy stocks under-$20.
Permian Resources (PR)
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Energy stocks in general are undervalued. And with Permian Resources (NYSE:PR), you’re getting an undervalued stock that also fits into the class of strong buys under $20. Analysts have a consensus price target of $18.14 on PR stock and 15 out of 21 analysts give the stock a Strong Buy rating.
Right in the company’s name is one of the biggest benefits to PR stock. The company is the largest pure-play exploration and production company in the coveted Permian Basin area. Permian Resources has over 400,000 net acres and approximately 70,000 net royalty areas. That includes the 14,000 net acres and 5,300 net royalty acres the company acquired in series of transactions in 2023.
Permian Resources is also an incredibly shareholder friendly company that is committed to returning 50% of its remaining free cash flow to shareholders in the form of dividends and share buybacks.
NexGen Energy (NXE)
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Sticking in the energy sector, NexGen Energy (NYSE:NXE) is an exploration and development stage company that is on the cusp of being one of Canada’s leading uranium miners. Uranium has been one of the best performing asset classes over the past two years, and investors are looking intently at this space for opportunities.
The case for NexGen Energy lies in its 100%-owned Rook 1 project in the renowned Athabasca Basin in Saskatchewan. The prize here is the Arrow Deposit that the company discovered nearly 10 years ago. Once production starts NexGen expects to mine 30 million pounds annually. That amount is enough to cover 50% of the West’s supply needs.
Analysts give NXE stock a $10 price target and 12 out of 14 analysts give the stock a Strong Buy rating.
Chewy (CHWY)
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In an inflationary environment, people food isn’t the only increased expense for families. Pet food and pet supplies have also seen an increase in price. That’s not affecting the top line for Chewy (NYSE:CHWY), but it’s taking its toll on earnings. The slump in earnings is a key reason why CHWY stock is down 53% in the last 12 months.
It’s not the only reason though. With Freshpet (NASDAQ:FRPT) as a notable exception, pet stocks in general are out of favor with investors. That’s hard to explain as spending on pets across all categories continues to increase.
However, with Chewy expected to return to profitability in 2024, it may be time for investors to take a closer look at Chewy as one of the strong buy stocks under $20. Analysts have a consensus price target of $25.42 for CHWY, a 47.4% increase from its closing price on March 14, 2024. And 13 out of 30 analysts give the stock a Strong buy rating.
Barrick Gold (GOLD)
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Bitcoin (BTC-USD) has been on fire in 2024, but so has gold. It’s amusing to see how the two camps constanly bicker at each other. But the takeaway is that they’re both fighting the same battle. They’re just different tools.
If you prefer gold, but don’t want the storage and insurance issues associated with physical gold, mining stocks like Barrick Gold (NYSE:GOLD) are a good option. At the end of 2023, Barrick had 77 million ounces of proven and probable gold reserves.
In late January, Barrick was trading at a forward P/E ratio of 19.8x which was well above its median P/E of around 13.9. It’s still trading at a premium to its median P/E at 17.5x forward earnings. But the difference is that GOLD stock is up 12% in the last month.
Analysts give GOLD stock a consensus price target of $20.57 which is 30% higher than its closing price on March 14, 2024. Additionally, 13 of 22 analysts give the stock a Strong Buy rating.
Vale (VALE)
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Vale (NYSE:VALE) is the last stock on this list, but it may be the best choice for strong buy stocks under $20. The stock is down more than 23% in the last 12 months and now trades at a forward P/E rating of 4.67x. At the same time Vale offers a dividend with a yield of 8.17%.
The mining company has been weighed down by high interest rates as well as a weak commodity market for iron ore and copper. Having said that, gold has started to rally so that may be something that can start Vale’s comeback. In the last two quarters, revenue has been growing year-over-year and the company has maintained positive earnings although they are down on a year-over-year basis. All in all, it’s one of those strong buy stocks under-$20.
Vale could use an interest rate cut or two and the recent news on inflation puts a damper on that idea. Still, analysts give VALE stock a consensus price target of $17.46 which is 44% higher than the price as of this writing. And 14 out of 23 analysts give the stock a Strong Buy rating.
On the date of publication, Chris Markoch 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.
Chris Markoch is a freelance financial copywriter who has been covering the market for over five years. He has been writing for InvestorPlace since 2019.
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