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7 Post-Inauguration Stocks to Buy For Under $20 in 2021

Posted on Friday, January 22nd, 2021 by MarketBeat Staff
7 Post-Inauguration Stocks to Buy For Under $20There’s a new occupant (officially) at 1600 Pennsylvania Avenue and the stock market is doing its part to promote unity. The Dow shot to a record high on Inauguration Day. We don’t imagine the honeymoon will last long. However it serves as a reminder that investors are more interested in the “what” more than “what party” when it comes to the way it moves.

With that said, many investors are attempting to read the tea leaves of the nascent Biden administration. One of the challenges will be that many of the usual suspects such as the FAANG stocks remain popular, yet frighteningly expensive (in terms of share price).

Valuation is in the eye of the beholder. But some investors may be looking for low-priced stocks that can get them more bang for their buck. The good news is that there are many stocks that you can buy for under $20 that not only show impressive growth, but are leaning in to the macroeconomic issues that will be present during at least the early part of the Biden administration.

In this special presentation, we’re giving you seven of our picks for low-priced stocks you can buy for under $20 today. But take note, these stocks may easily be over $20 in the next few months.

#1 - Rocket Companies (NYSE:RKT)

Rocket Companies logo

In what could be described as a tale of two economies, the housing market remains strong. There are many reasons why individuals may be moving. But with mortgage rates likely to remain at, or near, historic lows for the foreseeable future it makes sense to scoop up shares of Rocket Companies (NYSE:RKT). Rocket is the parent company of Quicken Loans and Rocket Mortgage.

Rocket has transformed the way consumers shop for and obtain a mortgage. And it is leaning into two significant trends. First, the company puts the entire mortgage approval process online. This is right in the wheelhouse of the millennial audience that is likely to be buying homes in the near future. Second, the company has lower costs because it’s entirely digital format reduces the need for loan officers.

Technically, RKT stock is just above the $20 threshold. At the time of this writing it’s at $20.03. But since the stock began trading publicly in 2020, it has remained steady at right around $20. It’s fair to say that Rocket won’t be alone in this space for long. However this is a rare opportunity to pay a start-up price for a company that is a market leader.

About Rocket Companies
Rocket Companies is a Detroit-based holding company consisting of personal finance and consumer service brands including Rocket Mortgage, Rocket Homes, Rocket Loans, Rocket Auto, Rock Central, Amrock, Core Digital Media, Rock Connections, Lendesk and Edison Financial. Since 1985, Rocket Companies has been obsessed with helping its clients achieve the American dream of home ownership and financial freedom. Read More 

Current Price: $24.71
Consensus Rating: Hold
Ratings Breakdown: 4 Buy Ratings, 10 Hold Ratings, 2 Sell Ratings.
Consensus Price Target: $25.46 (3.1% Upside)



#2 - Canoo (NYSE:GOEV)

Canoo logo

Many electric vehicle (EV) companies came to market by way of a special purpose acquisition company (SPAC). Among those was Canoo (NYSE:GOEV). Let’s keep things real. Many of these companies have interesting ideas that may never reach scale. As it relates to EV stocks, one thing you should look for is differentiation. Canoo delivers that in two important ways.

First, the company is going to be introducing what is known as a multipurpose delivery vehicle (MPDV). Canoo will use a “by wire” design that is part of its “skateboard” platform. The skateboard design is a chassis that essentially provides a template that the company can use to manufacture EVs much faster. And the “by wire” design allows the vehicle to be configured for maximum space and will eventually allow for autonomous driving capability.

 And once Canoo’s vehicles hit the market in 2022, they will be offering consumers a “transportation-as-a-service” model that gives it an SaaS component. Consumers can lease a vehicle for a specified period of time (minimum of 30 days). Once that time period ends, they can extend their “lease” or they can return the vehicle with no long-term contract.

About Canoo
Canoo Inc, a mobility technology company, designs, engineers, develops, and manufactures electric vehicles for commercial and consumer markets in the United States. The company offers business-to-business (B2B) delivery vehicles, lifestyle vehicles, and sport vehicles using skateboard architecture technology. Read More 

Current Price: $11.13
Consensus Rating: N/A
Ratings Breakdown: 0 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: N/A



#3 - Brightcove (NASDAQ:BCOV)

Brightcove logo

The cloud remains another red-hot sector for investors. Brightcove (NASDAQ:BCOV) is a great example of the money that’s being invested in cloud stocks. In January, 2020 BCOV stock was trading for under $10. At the time of this writing, it’s trading around $18 and has the momentum that should push it above that mark shortly.

Brightcove is engaged in cloud delivery of video. When you consider the staggering amount of video content being produced these days, you can understand that there is a desire for companies to monetize video. And that’s where Brightcove comes in. In fact, the company already has a very respectable client list that includes Adobe (NASDAQ:ADBE) and Ford (NYSE:F).

Brightcove has a two-tier pricing system: non-premium and premium. Obviously the goal is to get more of its customers on the premium track. Information in the company’s most recent earnings report suggests it is doing just that. Annualized subscription revenue per premium customer was $89,000 in the prior quarter. That was up from the $84,500 the company recorded in the prior year’s quarter.

About Brightcove
Brightcove Inc provides cloud-based services for video. Its flagship product include Video Cloud, an online video platform that enables its customers to publish and distribute video to Internet-connected devices. The company also offers Video Marketing Suite, a suite of video technologies to drive awareness, engagement, and conversion; Enterprise Video Suite, an enterprise-class platform for internal communications, employee training, live streaming, marketing, and e-commerce videos; and OTT Flow, a service for media companies and content owners to deploy direct-to-consumer, live and on-demand video services across platforms. Read More 

Current Price: $19.93
Consensus Rating: Buy
Ratings Breakdown: 4 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $21.25 (6.6% Upside)



#4 - LG Display (NYSE:LPL)

LG Display logo

Prior to the Covid-19 pandemic, finding a quality tech stock at a price tag below $20 was not easy to do. Today, investors have a lot more option. In the initial months after the pandemic began, investors fled to quality and that left some lower-priced stocks dangling.

But in the last few months, as many tech stocks look overvalued, investors are trying to find some underpriced gems. One for you to consider is LG Display (NYSE:LPL). If you’re looking at this article on an iPhone, then you are probably looking at a touch-screen made by LG Display. And as the company’s name suggests it is the screen-maker for the Korean electronics company LG.

The remote work and remote learning environments brought on by the pandemic was a major catalyst for the stock which climbed over 20% last year. The company is projecting demand to stick around for several years. For example, Apple (NASDAQ:AAPL) is supposed to announce higher-than-expected sales for the iPhone 12). And to account for that growth, the company recently opened a new facility in China.

About LG Display
LG Display Co, Ltd. manufactures and sells thin-film transistor liquid crystal display (TFT-LCD) and organic light emitting diode (OLED) technology-based display panels in South Korea, China, rest of Asia, Poland, other European countries, and the United States. The company's TFT-LCD and OLED technology-based display panels are primarily used in televisions, notebook computers, desktop monitors, tablet computers, and mobile devices. Read More 

Current Price: $9.53
Consensus Rating: Buy
Ratings Breakdown: 2 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: N/A



#5 - Ares Capital (NASDAQ:ARCC)

Ares Capital logo

Having access to capital has been a key for small- and medium-sized businesses to survive the global pandemic. Ares Capital (NASDAQ:ARCC) helps fill that need. The firm is a direct lender to private, mid-market companies who need financing.

For those who are unfamiliar with the company, Ares Capital is a business development company (BDC). BDCs are a corporate structure that was established in the 1980s as a way for public investors to invest in privately held U.S. businesses.

Since the company’s initial public offering (IPO) in 2004, Ares Capital has averaged an 11% return for its shareholders every year. As of September 30,2020, the company had a fair value of over $14 billion ($14.4 billion) and had a diversified portfolio of 347 companies.

And another thing, BDCs operate similar to real estate investment trusts (REITs) in that they are required to distribute at least 90% of its taxable income as dividends.

About Ares Capital
Ares Capital Corporation is a business development company specializing in acquisition, recapitalization, mezzanine debt, restructurings, rescue financing, and leveraged buyout transactions of middle market companies. It also makes growth capital and general refinancing. It prefers to make investments in companies engaged in the basic and growth manufacturing, business services, consumer products, health care products and services, and information technology service sectors. Read More 

Current Price: $18.96
Consensus Rating: Buy
Ratings Breakdown: 8 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $16.75 (11.7% Downside)



#6 - Zynga (NASDAQ:ZNGA)

Zynga logo

Mobile gaming was already popular before the pandemic (think Candy Crush). Zynga (NASDAQ:ZNGA) is known as the brand behind such popular games as FarmVille, Words with Friends and, more recently Harry Potter: Puzzles and Spells.

Like any company in a field such as this, user engagement is critical. And on that score, Zynga is doing very well. In its most recent quarter, the company reported 31 million daily active users and 83 million monthly active users. Both numbers were numbers the company had not seen in about six years.

Zynga turned that user engagement into a 46% year-over-year revenue increase to $503 million. More impressively, the company set another record by generating  a positive cash flow of $113 million.

It could be fair to say that this growth was a one-off due to the pandemic. However Zynga continues to develop more games and increase its development talent to ensure it can keep those engagement numbers high.

Zynga is also a backdoor play on 5G technology. The company is making inroad into the Asia market and expects that market to continue to heat up as 5G technology and its accompanying speed will make mobile gaming more desirable. 

About Zynga
Zynga Inc develops, markets, and operates social games as live services in the United States and internationally. The company's games are played on mobile platforms, such as Apple iOS and Google's Android operating systems, as well as on social networking sites, such as Facebook and Snapchat. Read More 

Current Price: $9.85
Consensus Rating: Buy
Ratings Breakdown: 16 Buy Ratings, 2 Hold Ratings, 1 Sell Ratings.
Consensus Price Target: $11.62 (18.0% Upside)



#7 - Hanesbrands (NYSE:HBI)

Hanesbrands logo

When you think about making undergarments a sexy investment, there might be other stocks that come to mind. Hanesbrands (NYSE:HBI) may not be the brand consumers will choose for a romantic post-pandemic getaway, but the company’s products may have been practical, low-cost holiday gifts in a year when practical, low-cost gifts were on everybody’s mind. And Hanes brand products were available at retailers such as Target (NYSE:TGT) and Walmart (NYSE:WMT) which made them easy for consumers to find.

Also when you buy HBI stock you’re buying into the Champion brand. And while that may also not be a sexy brand, Esquire magazine does think that the Champion brand is pretty cool.

Investors seem to agree. After falling over 25% after a disappointing earnings report in November, HBI stock has made a strong recovery. The stock is positive year-to-date and in the last 12-month period. Although the consensus price target for the stock suggests it may be overvalued, recent price target suggest the stock has more room to grow.

About Hanesbrands
Hanesbrands Inc, a consumer goods company, designs, manufactures, sources, and sells a range of basic apparel for men, women, and children in the United States. The company operates through three segments: Innerwear, Activewear, and International. It sells men's underwear, women's panties, children's underwear, activewear, and socks, as well as intimate apparel, such as bras and shapewears; home goods; and T-shirts, fleece, sport shirts, performance T-shirts and shorts, sports bras, and thermals, as well as licensed logo apparel in collegiate bookstores, mass retailers, and other channels. Read More 

Current Price: $20.88
Consensus Rating: Buy
Ratings Breakdown: 5 Buy Ratings, 4 Hold Ratings, 1 Sell Ratings.
Consensus Price Target: $15.65 (25.0% Downside)

 

As mentioned in the introduction, now is not the time to throw in the towel on stocks. In fact, equities are going to be the place to be as the economy reopens. But that doesn’t mean you need to have your capital chasing stocks that may be overvalued.

With that said, low-priced stocks are not without risk. All of the stocks in this presentation are small-cap or mid-cap stocks. In times of market volatility, these stocks can have major price moves. Of course that can be good and bad. The point is that you should only be tapping into the speculative part of your portfolio to buy these stocks.

Investors with a lower risk tolerance may choose to come at these stocks from a different angle. There are numerous mutual funds and exchange-traded (ETF) funds that specialize in small- and mid-cap stocks. Three of the most popular mid-cap ETFs are the iShares S&P Mid-Cap 400 Growth ETF (NYSEARCA:IJK), the Vanguard S&P Mid-Cap 400 Growth ETF (NYSEARCA:IVOG), and the SPDR S&P 400 Mid Cap Growth ETF (NYSEARCA: MDYG).

20 "Past Their Prime" Stocks to Dump From Your Portfolio

Did you know the S&P 500 as we know it today does not look anything close to what it looked like 30 years ago? In 1987, IBM, Exxon, GE, Shell, AT&T, Merck, Du Pont, Philip Morris, Ford, and GM had the largest market caps on the S&P 500. ExxonMobil is the only company on that list to remain in the top 10 in 2017. Even 15 years ago, companies like Radio Shack, AOL, Yahoo, and Blockbuster were an important part of the S&P 500. Now, these companies no longer exist as public companies.

As the years go by, some companies lose their luster, and others rise to the top of the markets. We've already seen this in the last few decades, with tech companies surpassing industrial and energy companies that once dominated the S&P 500. It's hard to know what the next mega-trend will be that will knock Apple, Google, and Amazon off the top rankings of the S&P 500, but we know that companies won't stay on the S&P 500 forever.

We've identified 20 companies that are past their prime. They aren't at risk of a near-term delisting from the S&P 500, but they show negative earnings growth for the next several years. If you own any of these stocks, consider selling them now before they become the next Yahoo, Radio Shack, Blockbuster, AOL and are sold off for a fraction of their former value.

View the "20 "Past Their Prime" Stocks to Dump From Your Portfolio" Here.







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