3 crazy, cheap stocks you can buy today
Investors must be prepared to pay a premium for quality stocks. That’s not to say, however, that quality stock will always have a higher price tag. Every now and then the market makes a temporary mistake.
With that as a backdrop, here’s a look at three extremely undervalued stocks that are worth investing in while still insanely cheap. In no specific order …
P / E over 12 rolling months: 9.95
Prospective P / E: 13.2
In theory, the size of a business shouldn’t matter. Investment opportunities are meant to be relative. A small business may not be able to produce the kind of profit that a large business can, but small businesses issue fewer shares held by fewer investors.
In reality, however, there is an advantage in being tall. A bigger business has more financial strength to adapt, whether that means more marketing, better lobbyists, or the opportunity to acquire smaller competitors who expand their revenue generation potential.
JPMorgan Chase (NYSE: JPM) is the country’s largest bank, with $ 3.2 trillion in assets at the end of the third quarter. The second largest bank is Bank of America, but it’s a distant second. Bank of America is sitting on a much smaller asset base of $ 2.4 trillion. Ergo, JPMorgan has many more profits to work with in its efforts to maintain its size-based advantage – roughly 50% more profits in the first nine months of 2021. This leaves JPMorgan with more options than any other mega-bank. of the sector.
The kicker: While this rate of growth is likely to slow in the near future, Chase has quadrupled his quarterly dividend payout over the past decade, sending a clear message that he is serious about sharing his success here, and at right now. The recent 2.5% dividend yield itself is also quite healthy.
P / E over 12 rolling months: 7.6
Prospective P / E: 8.9
General Motors (NYSE: GM) is not a business that needs a lot of introduction. It is one of the oldest automakers in Detroit, although very few cars are currently made in Detroit. Its brands include Chevrolet, Cadillac, Buick and GMC. Simply put, GM is a household name.
Being a household name didn’t help much during the Great Recession, when the company filed for bankruptcy and reorganized itself. The company returned to public markets in late 2010, and its new stock moved mostly sideways until early 2020, when the sell-off caused by the market pandemic torpedoed it.
In many ways, however, this massive sell-off may also have served as a capitulation as the auto industry went through a major shift. It is the standardization of electric vehicles (EVs), which finally enjoy sufficient social, political and infrastructural support to make it a viable business. General Motors has been moving in that direction for years anyway, but plans unveiled in 2020 to manufacture 30 different models of electric vehicles by 2025 could not have been announced at a more opportune time. The stock is now up more than 200% from its March 2020 low, riding a wave of euphoria for electric vehicles.
Even so, valued at less than 9 times its rolling and projected earnings per share, the market has yet to fully assess its potential as an EV name. The US Energy Information Administration predicts that the roughly 10 million electric vehicles on the world’s roads will now reach 685 million electric vehicles by 2050. Not all of them will be Tesla.
P / E over 12 rolling months: 6.5
Prospective P / E: 7.9
Finally add Synchrony Financial (NYSE: SYF) to your list of cheap crazy stocks you can buy today.
Unlike GM, Synchrony is not a household name. There is a good chance, however, that you or a member of your household will benefit from the services of the company. You see, Synchrony Financial is the backstage lender for hundreds of retailers who issue their own credit cards or offer installment loans on larger purchases. It also offers savings accounts and certificates of deposit, although credit is at the heart of its business.
And business is good, as usual. Purchasing volume grew 16% year-over-year in the third quarter, reaching $ 41.9 billion. And its loan portfolio grew 2% to $ 79.8 billion in the same three-month period. Operating income per share was $ 1.67 for the third quarter, well up from the COVID-related net income of $ 0.52 per share reported for the comparable quarter a year earlier. These numbers further reignite the mostly stable growth trend that was in place before the pandemic rocked the world in 2020.
There is no reason to believe that the future will be much different from the recent past either. In fact, it may look even better. With interest rates set to rise as consumers earn more because the global economy is buzzing again, Synchrony is entering a proverbial perfect storm. The Federal Reserve reports that U.S. consumers have accumulated more net debt each quarter of this year so far, ending October with record bonds of $ 4.38 trillion. Connect the dots.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.