Many investors have never heard of these companies because they all have stock prices lingering near or under $10 a share despite compelling potential for growth. But stock-picking expert Hilary Kramer thinks this makes them among the best bargains now in a pricey stock market that hit record highs in 2020. Here are 10 of Kramer’s favorite low-priced stocks for 2021…
Fallen Angels: These formerly high-flying companies suffered serious setbacks that caused their share prices to plummet. Many investors have given up on them even though they have solid balance sheets and strong catalysts for growth…
ACCO Brands (ACCO). This company’s iconic office-and-school-supply brands include Swingline staplers, At-A-Glance planners and Mead notebooks. ACCO’s stock has sunk 36% in the past three years as high-tech products reduced the need for paper supplies and as the pandemic forced schools and offices to shut down. What investors are missing: ACCO Brands could be a big post-pandemic winner as schools and offices restock supplies. Recent share price: $8.09.
Amneal Pharmaceuticals (AMRX) manufactures more than 250 generic drugs that treat everything from headaches to osteoporosis. The stock has lost 80% of its value since 2018 due to the opioid crisis. Amneal is expected to pay out $1.2 billion in settlements. What investors are missing: Amneal has focused its attention away from opioids and now is focused on other generic drugs, the sales of which are booming. Net revenue in the third quarter of 2020 increased 37% year over year. Recent share price: $4.81.
Annaly Capital Management (NLY) occupies an unusual and profitable niche in the real estate industry. It borrows cash to invest in federally guaranteed mortgage-backed securities. The company profits from the spread between the interest it pays on loans and the yield it derives from its investments. In 2020, investors panicked that the value of Annaly’s holdings would fall so much that it would be forced to liquidate assets on the cheap to repay its loans. Annaly’s stock plunged 62% by April. What investors are missing: The Federal Reserve has stepped in to buy mortgage-backed securities to support the market and has indicated it will do so as long as necessary. The value of Annaly’s investments has rebounded. Recent yield: 10.84%. Recent share price: $8.12.
Banco Bilbao Vizcaya Argentaria (BBVA). Although it’s based in Spain, this financial-services company generates most of its revenues from emerging markets, operating the largest bank in Mexico, as well as banks throughout Turkey, Romania and South America. BBVA was hurt by falling interest rates and the deep 2020 recession. What investors are missing: BBVA recently sold its commercial lending business in the US for $11.6 billion, an enormous windfall. Recent share price: $4.58.
Blue Apron Holdings (APRN) was one of the first nationwide meal-kit delivery services to go public back in 2017. Meal kits were a cheaper alternative to pricey take-out food and more convenient than planning a meal and shopping for the ingredients. But the concept was ahead of its time. Sales slumped, and by 2020, the company was on life support. What investors are missing: Now that millions of potential customers have been enjoying cooking at home as well as more home deliveries because of the pandemic, Blue Apron is poised for a turnaround. Its stock is much more attractively priced than other home-delivery services such as restaurant-delivery provider Door Dash. Recent share price: $10.10.
Party City Holdco (PRTY). The pandemic cut off most in-person social functions last year. Few companies suffered as much as North America’s leading party-goods retailer. With about 830 retail party-supply stores throughout North America, it has typically been a steady, cash-generating machine. However, as earnings shrank in 2020, the stock plunged 90% to a low of 45 cents a share. What investors are missing: Party City expects sales to increase as vaccine distribution ramps up. This past December, the company positioned itself for greater expansion in the US by raising nearly $60 million from the sale of its international operations. Recent share price: $7.19.
OrganiGram (OGI). The Canadian grower of high-grade recreational and medical marijuana went public in 2019 soon after Canada formally legalized the cultivation and consumption of cannabis. Unfortunately, legalization led to a glut in supply that drove down prices. OrganiGram’s stock plunged 88% from its peak to just $1 a share. What investors are missing:The company has remained profitable and survived a massive shakeout in the marijuana industry that saw many suppliers go out of business. OrganiGram also operates five healing centers using medical cannabis. Recent share price: $1.83.
YPF (YPF). This South American oil-and-gas exploration company is one of the largest shale-oil producers in the world outside the US. The stock fell 59% in 2020 as the global recession disrupted supply chains and sapped demand for energy, leaving dozens of oil companies in or near bankruptcy. What investors are missing: YPF’s solid balance sheet and partial ownership by the Argentinian government makes it a relatively safe energy bet. Cheaper than comparable US oil giants, it is my favorite way to play an energy-sector rebound as oil prices continue to recover in 2021. Recent share price: $3.65.
Underappreciated Growth: These fast-growing companies draw limited attention from investors because they are relatively small and overshadowed by larger competitors…
Glu Mobile (GLUU) makes free-to-play games for smartphones, such as Disney Sorcerer’s Arena and Kim Kardashian: Hollywood. The firm generates revenue through in-app purchases and advertising. What investors are missing: While it seems mobile gaming is ubiquitous, it still is in its infancy, and the $1.6 billion Glu Mobile has already locked up lucrative deals with the Walt Disney Company and Warner Bros. During the last two months of 2020, the stock finally began to get some recognition and exploded 40%, but it still has plenty of room to rise. Recent share price: $8.81.
Kinross Gold (KGC). The $9 billion Canadian gold miner is dwarfed by giant rivals such as Newmont Goldcorp and Barrick Gold. Its stock has dwindled over the past decade with gold often out of favor. What investors are missing: Kinross Gold, which owns widely diversified mining properties, saw earnings in the third quarter of 2020 nearly quadruple year-over-year. Investors are likely to continue to seek out gold and gold miners for inflation protection as governments pump stimulus money into their economies. Recent share price: $6.98.