7 Stocks Under $50 to Buy and Hold Forever
Whether it’s at the gas pump or the grocery store, 50 bucks won’t get you nearly as far these days as it did a year ago. However, with the major indices down between 5% and 30% over the past year, traders may find their investment dollars going further than they used to. With this in mind, I’ve compiled a list of the best stocks under $50 to buy and hold.
The names below are discounted not just on nominal pricing terms but also based on their underlying fundamentals. Therefore, they strike a nice balance between risk and reward.
So, consider these undervalued and often overlooked stocks under $50 to buy and hold for your long-term portfolio.
Stocks Under $50 to Buy and Hold: Kulicke and Soffa Industries (KLIC)
Based in Singapore, Kulicke and Soffa Industries (NASDAQ:KLIC) hasn’t gotten the attention it arguably deserves from stateside investors… at least not yet. While KLIC represents one of the hard-hit technology plays – suffering a 22.5% loss on a year-to-date basis – near-term momentum has been bullish. Shares are up more than 10% in the past month.
Fundamentally, the semiconductor equipment maker should prove resilient. Per its public profile, the company is “a leading provider of semiconductor, LED and electronic assembly solutions serving the global automotive, consumer, communications, computing and industrial markets.” Unless you anticipate that these sectors will suffer a substantial loss of demand, KLIC should continue to grow.
Kulicke and Soffa displays all-around excellent performance metrics. Undergirded by a strong balance sheet, Kulicke & Soffa delivers sector-leading revenue growth and profit margins. For instance, its three-year revenue growth rate of 44.2% is better than 95% of the industry while its net margin of 28.8% is better than 91% of its peers.
Finally, KLIC looks undervalued, trading at 6.7 times trailing 12-month earnings. In contrast, the industry’s median price-earnings ratio is 17.9.
MarineMax (HZO)
Based in Clearwater, Florida, MarineMax (NYSE:HZO) is a boat dealer specializing in both new and used boats. Since the start of the year, HZO has fallen 46%. However, shares appear to be stabilizing, rising more than 15% from their 52-week low, made in mid-October.
MarineMax may seem like an odd choice in the current economic environment with rising inflation and waning consumer sentiment causing people to rein in discretionary purchases. Yet, by the nature of its products, the company caters to a wealthier clientele — i.e., those who can afford to buy a recreational boat or yacht.
Spending among the wealthy tends to be more resilient than among people with lower income levels, which should help the company continue to deliver impressive growth. MarineMax’s three-year revenue growth rate stands at 24%, while its three-year book growth rate is 27.8%. Both metrics rank better than 85% of the competition.
GuruFocus rates HZO as “significantly undervalued” based on its proprietary calculation. Moreover, the stock’s forward price-earnings ratio of 3.7% is better than 99% of its peers.
Stocks Under $50 to Buy and Hold: Gravity (GRVY)
South Korean video and mobile game company Gravity (NASDAQ:GRVY) is another name that is being overlooked by U.S. investors. The company is best known for its multiplayer role-playing game “Ragnarok Online.”
Prospective investors will need to be careful. With a market capitalization of just $288 million, the stock is technically a microcap. Further, GRVY is down 40% year to date and has yet to find a bottom. Shares hit a fresh 52-week low this week. Still, for patient investors, Gravity represents an intriguing play on growth in the video game sector.
The company has no debt. While this is not always a positive attribute, it can provide flexibility during rocky economic periods. In addition, the company enjoys solid growth and profit margins.
Finally, GRVY is undervalued, trading at 7.3 times trailing earnings compared with an industry median of 18.1. Therefore, anyone looking for a high-risk, high-reward play for their long-term portfolio should consider Gravity.
Semtech (SMTC)
Headquartered in California, Semtech (NASDAQ:SMTC) is a supplier of analog and mixed-signal semiconductors and advanced algorithms for consumer, enterprise computing, communications and industrial end markets. Global economic weakness and the resulting demand concerns have hit semiconductor stocks hard, and SMTC is no exception. The stock is down a whopping 68% in 2022. However, since hitting a 52-week low in mid-October, shares have rallied more than 13%.
On Nov. 30, the company reported better-than-expected third-quarter results, earning 65 cents per share, on an adjusted basis, on $177.6 million in revenue. Yet, shares sold off following the announcement, likely due to management forecasting lower revenue and earnings for the current quarter.
Still, shares offer great value for longer-term investors who are willing to wait out the cyclical downtrend in the chip sector. Among the company’s positive financial attributes are margin expansion and low bankruptcy risk. And GuruFocus rates shares as “significantly undervalued.”
Stocks Under $50 to Buy and Hold: TrueBlue (TBI)
Headquartered in Tacoma, Washington, TrueBlue (NYSE:TBI) is a workforce solutions firm that offers staffing, outsourcing and recruiting services. Shares are down 28% year to date, but they have gained about 4% in the past month.
While the economy is struggling and there have been plenty of rumblings about hiring freezes and layoffs, the job market remains tight. In fact, the November jobs report was so strong it has people wondering whether the Federal Reserve’s rate hikes are actually having the desired effect. A strong labor market bodes well for TrueBlue, a hidden gem that could truly shine during the next period of economic expansion.
The company’s balance sheet is solid. TrueBlue has an Altman Z-Score of 4.4, reflecting low bankruptcy risk. In addition, its debt-to-equity ratio of 0.13 compares favorably with the sector’s median ratio of 0.4.
Shares look undervalued based on traditional metrics. For instance, TBI’s forward P/E of 10.5 is well below the industry median of 14.1. The same goes for its price-sales ratio of 0.3 versus the sector median of 1.1.
CoreCard (CCRD)
Based in Georgia, CoreCard (NYSE:CCRD) “delivers a powerful and integrated solution for any type of card issuing program including complex credit,” according to its website. Shares are down 28% year to date. However, a 14% pop over the past three months could signal the tide is turning.
Headlines about weakening consumer sentiment have pressured the broader credit industry. On the flip side, credit card usage is on the rise, which means greater demand for CoreCard’s services. Furthermore, as the economy normalizes and with the trend toward digital payments and away from cash clear, CoreCard should be a long-term winner.
According to GuruFocus, the underlying business features five green flags and no red flags — a rarity for the investment resource. Among the positive attributes GuruFocus identifies are financial strength and low bankruptcy risk. Plus, the stock is trading at 15.4 times trailing earnings, comparing favorably to the sector median of 25.5.
Stocks Under $50 to Buy and Hold: Schneider National (SNDR)
Headquartered in Green Bay, Wisconsin, Schneider National (NYSE:SNDR) is a provider of truckload, intermodal and logistics services. Per its public profile, Schneider’s services “include regional, long-haul, expedited, dedicated, bulk, intermodal, brokerage, cross-dock logistics, pool point distribution, supply chain management and port logistics.” SNDR has outperformed the broader market this year, down just 8%. Over the past month, shares have rallied 11.6%.
While global recession fears persist due to central bank rate hikes, the surprisingly robust November jobs report also translates into more dollars chasing after fewer goods. As broader circumstances normalize, demand for shipping specialists’ services should increase, boding well for Schneider.
The company features a stable balance sheet. Its cash-to-debt ratio of 1.9 times is better than 78% of its peers. Further, its Altman Z-Score pings at 4.3, representing low bankruptcy risk.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
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