3 Cheap Stocks To Watch Right Now
Is the stock market open on Black Friday? The answer is yes, but the New York Stock Exchange and Nasdaq will close at 1 p.m. ET. While consumers are looking for value deals to add to their shopping cart, investors are looking for the best stocks to add to their portfolio. We all know stocks can be cheap for various reasons, but not all cheap stocks offer value, right? Therefore, investors need to do due diligence to find bargains in the stock market today which could bring good values to shareholders. But the real question here is, where do we start?
In recent weeks, the optimism among vaccine makers such as Pfizer (PFE Stock Report) and Moderna (MRNA Stock Report) are pushing the stock market to new highs. The Dow surpassed 30,000 points for the first time, an all-time high for the index. If you are looking for the best deals in the stock market today, where do we start? Personally, I would go straight to the epicenter stocks. I believe the most heavily battered industries from the coronavirus pandemic offer the best upside potential considering most of them are still trading less than their pre-pandemic levels.
Sure, the stock market has had an incredible run-up since the lows in mid-March. Thus, it may feel as if there are no longer any bargains left among stocks that you might want to own. That’s especially when you have a heavy focus on industries like electric vehicles or cloud computing. However, if you are patient enough with your investments, would you consider the following cheap stocks today?
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Cheap Stocks To Buy [Or Avoid] Now: American Airlines
When investors are looking for cheap stocks to buy, airline stocks like American Airlines Group Inc. (AAL Stock Report) usually come to mind. Of course, the COVID-19 pandemic has brought the company down to its knees. But as we’re on the brink of vaccine distribution, we’ve seen AAL stock move higher this week. AAL stock has gone up nearly 18% in the past 5 trading sessions.
The company reported its third-quarter earnings last month where the losses were narrower than analysts have estimated. The company reported revenues of $3.2 billion, a 73% drop year-over-year. American Airlines also reported a 59% decrease in total available seat miles, and a net loss of $2.4 billion for the third quarter.
So, is AAL stock really worth the risk? If you are looking for a quick flip and get a quick profit in the next few days or so, perhaps this isn’t your cup of tea (yet). That’s because airline revenue is unlikely to bounce back anytime soon even if a vaccine becomes widespread. Of course, we can say that airlines are out of the woods and that we could finally see light at the end of the tunnel. Chances are, American Airlines could gradually recover both in its revenue and stock price. But the truth is, it will take quite some time to rebuild the company’s balance sheet before American hits cruising altitude again. Admittedly, AAL stock looks cheap, but that doesn’t mean it comes without risk. Would you be betting on AAL stock for a recovery in the airline business?
Cheap Stocks To Buy [Or Avoid] Now: Carnival Corporation
Next up, another cheap stock to consider is Carnival Corporation (CCL Stock Report). The company is the world’s largest travel leisure company, with a combined fleet of over 100 vessels across 10 cruise line brands. It is based in Florida with operations in the UK and in Panama. Since the beginning of November, Carnival has seen a remarkable 50% rise in its share prices. This shouldn’t come as a surprise with positive vaccine news and the coronavirus drug from Regeneron Pharmaceuticals (REGN Stock Report).
Like other cruise-line stocks, Carnival did not have a good third quarter too. Carnival saw an adjusted net loss of $1.7 billion in the last quarter. However, the company reported ending the quarter with $8.2 billion in cash and cash equivalents. News of possible vaccines could provide the Carnival with a key opportunity to further enhance future liquidity as well. The company also reported that its cruise lines Costa and AIDA would be resuming. Likewise, its cumulative advanced bookings for the second half of 2021 have increased despite minimal advertising or marketing.
In addition, Carnival also received good news prior to this from the Centers for Disease Control and Prevention (CDC). The CDC has agreed to allow cruises to operate conditionally. Despite being limited to seven-day cruises, this is a good sign for the cruise industry as a whole. Upon obtaining a conditional sailing permit, the company should be able to organize shorter cruise experiences for the general public. With all in mind, would it be wise for investors to buy CCL stock today?
Cheap Stocks To Buy [Or Avoid] Now: Goldman Sachs
To say Goldman Sachs (GS Stock Report) blew past analyst’s expectations during its third-quarter announcement was a major understatement. This is because net income jumped 94% year over year to $3.5 billion as revenue climbed 30% to $10.8 billion year-over-year. According to analysts, GS stock is trading at a value right now that is too low to ignore. While many may know Goldman Sachs as a top investment bank, the company is also going into consumer banking to diversify its income. It is doing so via its digital bank Marcus.
Revenue in investment banking was $1.97 billion for the third quarter, an increase of 7% year over year. A 60% jump in underwriting revenue contributed to the increase. Global markets saw a 29% jump in revenue to $4.55 billion. Asset management also recorded gains of 71% to $2.77 billion. Even its smallest business, the consumer and wealth management segment, saw a 13% growth to $1.49 billion. Investors might want to take a closer look at GS’s long-term potential in the consumer banking business. That’s because its consumer banking revenue for the quarter rose 50% from a year ago to $326 million.
Despite its astonishing results from the investment banking segment and the compelling potential of its consumer banking business, Goldman last traded at $236.54 per share as of Wednesday’s closing. This is about 5% lower from its 52-weeks high. Since the company has rebounded strongly from its March lows, this also signals that it is more resilient than other banking stocks in the market. Considering this bank stock has lots of potential upsides, would it be a wise move to buy GS stock now?