The US stock market has consistently hit new highs since the start of 2021, so are there any cheap stocks left to buy this month?
Where Can I Buy Cheap Stocks in June 2021?
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Which Cheap Stocks to Buy in June 2021?
Here is our top 10 list of cheap stocks to buy this month.
1. Facebook (NASDAQ: FB)
American social networking technology company Facebook gained 19% over the past six months, mainly because of its stellar first-quarter earnings. The company’s revenue for the quarter jumped by 48% to $26.17 billion from the same quarter last year. Net Income also grew to $9.5 billion, up 94% from $4.9 billion in the same quarter last year.
Facebook’s P/E, forward P/E, and PEG ratios are 29, 22, and 1.22 respectively. These are considerably better than the industry average 32, 27, and 1.55, which shows FB stock is trading at a discount compared to its industry peers.
2. General Motors (NYSE: GM)
Over the past five months, American automaker General Motors’ share price rose by 56%, comprehensively beating the returns of the S&P 500 index which increased only 14% during the period. The company beat Wall Street’s expectations as it reported stellar first-quarter results, and it registered revenue of $32.5 billion and net income of $3 billion during the period.
General Motors appears cheap compared with its industry peers on P/E (10 vs. 30.98), forward P/E (9.5 vs. 27.91), and PEG (0.8 vs. 1.09) measures.
3. Advanced Micro Devices Inc. (NASDAQ: AMD)
American chipmaker Advanced Micro Devices gained about 100% in 2020 as it climbed from $45.86 to $91.71 per share during the year. However, over the past five months, the stock shed around 12% and is currently trading around $81 per share. The company registered revenue of $3.35 billion, a staggering year-over-year increase of 93%. Earnings per share (EPS) also climbed from $0.14 to $0.45 during the period. Amid the global GPU shortage, the company expects demand to be strong for the rest of the year, which will likely benefit the chipmaker.
AMD stock is currently undergoing a correction after it hit record highs in 2020, which makes it a lot cheaper now that the P/E ratio has declined to the industry average of 32.
4. DraftKings (NASDAQ: DKNG)
Sports betting company DraftKings is up 19% year-to-date and is currently trading at $53 per share. Despite this gain, the stock is still down from the highs it achieved in March. However, analysts expect that the stock will regain its highs by the end of this year as sports activities resume. DraftKings achieved $231.5 million in revenue, which translates into 175% growth year-over-year. Analysts have set a target price of $105 for the stock. The fact that the stock is available at discount and has positive prospects means you should think about including it in your portfolio.
5. Visa Inc. (NYSE: V)
Visa is an American financial services corporation that provides electronic funds transfer facilities to financial institutions through credit and debit cards. The company’s stock is up 6% year-to-date, trading at $231 per share.
Although the company’s revenue declined by 5% during 2020 and 4% in the first quarter, Wall Street analysts expect the company to rebound once brick and mortar stores reopen. Visa’s recent acquisitions have started contributing to its top line, and — according to analysts — will push revenues higher during the coming quarters. The company’s trailing-twelve-months (TTM) P/E ratio is 48, which is lower than Mastercard’s 56 and PayPal’s 59.
6. Simon Property Group, Inc. (NYSE: SPG)
Simon Property Group is a real estate investment trust (REIT) that owns and invests in commercial real estate such as shopping malls and retail outlets in the United States.
This company’s stock has gained a hefty 62% over the past five months and analysts expect it to once again hit the $150 price level it achieved in 2019. The company’s TTM P/E ratio stands at 38 against the industry average of 59, which shows that the stock is still cheap or reasonably priced relative to its peers.
7. Alibaba (NYSE: BABA)
Chinese e-commerce giant Alibaba posted revenue of $187.39 billion for the quarter to 30 March 2021, up 64% year-over-year. However, the company booked a net loss of 5.47 billion because of a $2.8 billion fine imposed by the Chinese anti-monopoly regulatory body.
Alibaba is a growth stock with five-year annualized earnings and sales growth of 29% and 46% respectively. The stock is available at a huge discount to its American counterparts, Amazon and Shopify.
8. STORE Capital Corporation (NYSE: STOR)
STORE Capital Corporation is the only real estate investment trust (REIT) to feature in Warren Buffet’s Berkshire Hathaway portfolio. The company follows a unique business model by renting out properties on a net lease basis, which shifts the burden of property taxes, maintenance, and insurance onto tenants. STORE Capital has rented out the majority of its properties to service-based and manufacturing tenants, thus shielding it from retail sector headwinds.
The company has a dividend yield of 4.6% and a payout ratio of 73%. With a TTM P/E ratio of 45, the stock is reasonably priced for a REIT.
9. Intel Corporation (NASDAQ: INTC)
US semiconductor company Intel’s shares have gained around 15% over the past five months. Though the company reported a net income of $3.4 billion — a decline of 41% from the same quarter last year — it is planning to ramp up capital spending from $14.3 billion in 2020 to $20 billion during 2021. This positive development should help the stock in the long term.
Intel stock is available at a significant discount to its peers. Its P/E ratio is 12.8 compared to 34 for AMD and 83 for NVIDIA.
10. Target (NYSE: TGT)
Target is an American retail corporation with stores spread across the United States. Target stock has gained around 30% over the past five months. In Q1 this year, the company’s revenue grew by 23% year-over-year to $24.20 billion. Target reported an adjusted EPS of $3.69, up by 140% from the same quarter last year.
Target’s TTM P/E is 18.83, which is lower than Costco’s 35 and Walmart’s 33, signifying that Target’s stock is cheaper than its peers.
Why Buy Cheap Stocks in June 2021?
The S&P 500 index is near record highs, which means that most stocks have seen share price increases. While stocks may rise further, you could end up buying overvalued stocks that lose you money when share prices start to fall. It therefore makes sense to search for undervalued (or cheap) stocks to ensure positive returns.
The Bottom Line
The key to stock investing is to find and buy undervalued or cheap stocks. To determine which stocks are cheap, you can study various fundamental metrics such as the P/E ratio, PEG ratio, P/S ratio, P/B ratio. In short, you should base your stock purchases on fundamental analysis.