The price of a stock and the value of that stock are frequently different. And many investors have learned the hard lesson that there's no direct correlation. For example, Nvidia Corporation (NASDAQ: NVDA) seemed expensive at the beginning of 2024. But after a blowout earnings report, NVDA stock continues to move higher.
However, many of the other "Magnificent 7" stocks haven't performed nearly as well in 2024. Investors who chased those stocks higher may be trying to unwind some losses.
On the other hand, you can look at a stock like Palantir Technologies Inc. (NYSE: PLTR). It was trading below $10 per share in March 2023. At the time of this writing, it's over $24 a share, and despite a P/E ratio of over 70x, it may be undervalued.
That's why it's a good time to look at stocks trading under $20. These stocks can frequently be overlooked as speculative plays. You may hear the phrase, "It must be cheap for a reason."
But we'll say it again: the price and the value of a stock are different. In this special presentation, we highlight seven stocks under $20 that are worth a closer look.
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- Chewy
- Barrick Gold
- Vale
- Uranium Energy
- Riot Platforms
- SoundHound
- Hims & Hers Health
#1 - Chewy (NYSE:CHWY)
Chewy Inc. (NYSE: CHWY) is an online pet food and supplies retailer. The company has a loyal following of consumers who receive their product as part of a monthly auto-ship subscription program. Chewy is also making inroads into the pet wellness sector, which allows pet owners to order some common medicines.
Chewy stock is down 33% in the first quarter of 2024 and 13% in the last six months, reflecting two consecutive quarters of negative earnings per share. However, ongoing margin expansion, lower debt, and higher free cash flow are all encouraging signs that Chewy is well-positioned for growth when the economy improves.
As of March 28, 2024, CHWY stock has a price-to-earnings (P/E) ratio of 195.77, which screams overvalued. However, analysts are bullish on the stock. Even after cutting their price targets, the Chewy analyst ratings on MarketBeat give the stock a consensus price target of $27.64, which gives the stock a 76% upside.
About Chewy
Chewy, Inc, together with its subsidiaries, engages in the pure play e-commerce business in the United States. It provides pet food and treats, pet supplies and pet medications, and other pet-health products, as well as pet services for dogs, cats, fish, birds, small pets, horses, and reptiles through its retail websites and mobile applications.
Read More - Current Price
- $34.60
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 14 Buy Ratings, 8 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $31.25 (9.7% Downside)
#2 - Barrick Gold (NYSE:GOLD)
Barrick Gold Corp. (NYSE: GOLD) is one of the largest gold miners in the world. The company operates the Cortez Gold Mine in Nevada, one of the world's largest gold mines.
Barrick Gold's revenue and earnings have been remarkably consistent in the last five years despite fluctuations in the spot price of gold. And if you held on to GOLD stocks through some wild fluctuations, you would be sitting on a 19% gain over the last five years.
The case for owning GOLD stock under $20 is a bet on the future price of gold. On March 28, 2024, gold was trading at $2,223 per ounce, a gain of approximately 21% since October 2023. And central banks are buying up gold even as mining output has remained constant. That's setting up a supply shortfall that will be bullish for miners like Barrick Gold.
Barrick Gold's earnings are expected to increase 22% in the next 12 months, and the analysts give GOLD stock a consensus price target of $22, a 34% upside.
About Barrick Gold
Barrick Gold Corporation is a sector-leading gold and copper producer. Its shares trade on the New York Stock Exchange under the symbol GOLD and on the Toronto Stock Exchange under the symbol ABX.
In January 2019 Barrick merged with Randgold Resources and in July that year it combined its gold mines in Nevada, USA, with those of Newmont Corporation in a joint venture, Nevada Gold Mines, which is majority-owned and operated by Barrick.
Read More - Current Price
- $17.90
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 7 Buy Ratings, 3 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $23.90 (33.5% Upside)
#3 - Vale (NYSE:VALE)
Vale S.A. (NYSE: VALE) is another commodity-based stock that makes this list of stocks under $20 worth considering. The company produces and extracts iron ore and iron ore pellets. According to Future Market Insights, demand for global iron ore pellets will increase at a compound annual growth rate (CAGR) of 7.9% in the next 10 years. The catalyst for that growth is iron ore's essential role in steel production.
The company also mines copper, which is also expected to see strong demand growth over the next decade. To that end, Vale reported 50% production growth in the fourth quarter, which is its highest level since 2018.
VALE stock is down 20% in the last year and the company is projecting a 13% decline in earnings in 2024. However, analysts are looking at the company's strong fundamentals and ultra-low 4.6x forward P/E ratio in assigning the stock a $16.98 price target, which is a 40.5% increase from the company's price on March 28, 2024.
About Vale
Vale SA, together with its subsidiaries, produces and sells iron ore and iron ore pellets for use as raw materials in steelmaking in Brazil and internationally. The company operates through Iron Solutions and Energy Transition Materials segments. The Iron Solutions segment produces and extracts iron ore and pellets, manganese, and other ferrous products; and provides related logistic services.
Read More - Current Price
- $10.03
- Consensus Rating
- Hold
- Ratings Breakdown
- 4 Buy Ratings, 5 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $15.13 (50.9% Upside)
#4 - Uranium Energy (NYSEAMERICAN:UEC)
One more commodity stock to consider when looking at stocks under $20 is Uranium Energy Corp. (NYSEAMERICAN: UEC). The uranium market has been on fire as interest in nuclear energy is rising. As the world seeks to transition away from fossil fuels, there are few sources of truly clean energy. Nuclear energy solves that, and uranium is an essential component.
UEC stock is up 137% in the last year, which can make some investors concerned about chasing the stock higher. However, the growth in this stock is being led by institutional investors who have piled approximately $350 million into the stock in the last two quarters. And with the Federal Reserve likely to lower interest rates at some point, those institutions will look for ways to hedge against a weaker dollar.
Analysts remain bullish on Uranium Energy, assigning the stock a consensus price target of $8.80, which is 28.8% higher than its price at the end of March. That would also put UEC stock at a new all-time high.
About Uranium Energy
Uranium Energy Corp., together with its subsidiaries, engages in exploration, pre-extraction, extraction, and processing uranium and titanium concentrates in the United States, Canada, and Paraguay. It owns interests in the Palangana mine, Goliad, Burke Hollow, Longhorn, and Salvo projects located in Texas; Anderson, Workman Creek, and Los Cuatros projects situated in Arizona; Dalton Pass and C de Baca project located in New Mexico; Roughrider, Shea Creek, Christie Lake, Horseshoe-Raven, Hidden Bay, Diabase, West Bear, JCU, and other project located in Canada; and Yuty, Oviedo, and Alto Paraná titanium projects in Paraguay.
Read More - Current Price
- $8.16
- Consensus Rating
- Buy
- Ratings Breakdown
- 4 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $10.50 (28.8% Upside)
#5 - Riot Platforms (NASDAQ:RIOT)
Do you believe in Bitcoin? With the approval of Bitcoin ETFs, the answer to that question may not matter. The reality is that it's an asset class, albeit a volatile one, that's here to stay. But if Bitcoin is not right for your portfolio, you can still get indirect exposure to the cryptocurrency through Riot Platforms Inc. (NASDAQ: RIOT).
Riot Platforms is a blockchain technology company that is aiming to become North America's leading provider of Bitcoin mining services. RIOT stock is down 27% in the month ending March 28, 2024, which is likely due to the upcoming Bitcoin halving event, which will take place in mid-April.
But this price movement has occurred around the other Bitcoin halving cycles. However, it's more due to investor psychology than the fundamentals surrounding Bitcoin mining.
Riot Platforms is not profitable, and it's not expected to become profitable in the next 12 months. Still, investors give the stock a $17.83 price target, which would result in a 39% gain for RIOT stock.
About Riot Platforms
Riot Platforms, Inc, together with its subsidiaries, operates as a bitcoin mining company in North America. The company operates through three segments: Bitcoin Mining, Data Center Hosting, and Engineering. It also provides co-location services for institutional-scale bitcoin mining companies; critical infrastructure and workforce for institutional-scale miners to deploy and operate their miners; operation of data centers; and maintenance/management of computing capacity.
Read More - Current Price
- $12.15
- Consensus Rating
- Buy
- Ratings Breakdown
- 11 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $16.35 (34.6% Upside)
#6 - SoundHound (NASDAQ:SOUN)
No list of stocks under $20 to buy would seem complete without one artificial intelligence (AI) stock. And it's a good time for investors who are looking for the "next Nvidia." It's unlikely that any stock can live up to that hype, but SoundHound AI (NASDAQ: SOUN) is one to watch.
SoundHound uses generative AI (GenAI) in products that can understand human speech and respond with a computer-generated voice. The company is seeing strong growth in the restaurant and automotive sectors.
The company is reporting strong revenue growth but is not yet profitable. For that to change, SoundHound must show that it can expand into other sectors before competitors enter the arena.
That being said, institutional investors seem to believe SOUN stock is a safe bet. Ownership remains relatively low at just 19%. However, much of that buying took place last year, also when short interest climbed sharply.
About SoundHound AI
SoundHound AI, Inc develops independent voice artificial intelligence (AI) solutions that enables businesses across automotive, TV, and IoT, and to customer service industries to deliver high-quality conversational experiences to their customers. Its products include Houndify platform that offers a suite of Houndify tools to help brands build conversational voice assistants, such as Application Programming Interfaces (API) for text and voice queries, support for custom commands, extensive library of content domains, inclusive software development kit platforms, collaboration capabilities, diagnostic tools, and built-in analytics; SoundHound Chat AI that integrates with knowledge domains, pulling real-time data like weather, sports, stocks, flight status, and restaurants; and SoundHound Smart Answering is built to offer customer establishments custom AI-powered voice assistant.
Read More - Current Price
- $6.44
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 4 Buy Ratings, 3 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $7.64 (18.7% Upside)
#7 - Hims & Hers Health (NYSE:HIMS)
Hims & Hers Health (NYSE: HIMS) is one of the leading telehealth companies in the world. The company is expanding its portfolio to include a broader range of services, and investors are taking note. HIMS stock is up 64% in the last 12 months.
Revenue is growing strongly supported by the company's subscriber base, which increased 48% in 2023 to over 1.5 million members. The company is also forecasting strong revenue growth in 2024 in a range of $1.17 and $1.20 billion.
Perhaps more importantly, the company reported positive earnings in its most recent quarter. The company is projecting earnings growth to continue in the next 12 months, but analysts are bringing down their price targets. That sentiment appears to be changing. In late February, several analysts began raising their price targets for HIMS stock.
About Hims & Hers Health
Hims & Hers Health, Inc operates a telehealth platform that connects consumers to licensed healthcare professionals in the United States, the United Kingdom, and internationally. The company offers a range of curated prescription and non-prescription health and wellness products and services available to purchase on its websites and mobile application directly by customers.
Read More - Current Price
- $21.80
- Consensus Rating
- Hold
- Ratings Breakdown
- 7 Buy Ratings, 8 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $20.71 (5.0% Downside)
Stocks under $20 are appropriate for both traders and investors. In fact, many investors have stocks under $20 as part of a diversified portfolio. These stocks are frequently perceived as being more volatile than higher-priced blue-chip stocks.
However, frequently, the risk profile of these stocks has a tighter correlation to stocks with a higher price tag. And investors also speculate that these stocks could have market-beating upside while putting much less capital at risk.
However, as is the case with all stocks, you have to know where to look. To help you in your research, MarketBeat provides a free tool for investors. Under the Market Data tab, you'll find a section titled Low Priced Stocks. You can look at a list of stocks in specific categories (i.e., Stocks Under $5, Stocks Under $10, etc.) that is updated to include the stocks that receive Strong Buy or Buy ratings from Wall Street's top analysts.
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