This article provides research and analysis on affordable stocks that offer growth potential for investors on a budget of $100. Stocks covered include Ford, Kinross Gold, United Microelectronics, NIO, Destination XL, SoundHound AI, and ReWalk Robotics.
Investing in the stock market can seem intimidating, especially if you only have $100 to spare. However, with the right research and a little bit of risk, even $100 can be turned into a bigger return if invested wisely.
This article will explore 7 cheap stocks currently trading under $20 per share that have significant upside potential in both the short and long term. These affordable stocks allow investors to get exposure and diversity in their portfolios without breaking the bank.
While cheap stocks come with higher volatility and risk, they can provide tremendous growth opportunities during market upswings. With proper due diligence and analysis, cheap stocks can be a gateway to building wealth over time.
Table of Contents
- Ford Stock (F)
- Kinross Gold Stock (KGC)
- United Microelectronics Stock (UMC)
- NIO Stock (NIO)
- Destination XL Stock (DXLG)
- SoundHound AI Stock (SOUN)
- ReWalk Robotics Stock (RWLK)
Introduction
The stock market over the last few years has been intensely volatile, experiencing both record highs and crushing lows. However, amidst the uncertainty lies possibility – the possibility to invest smartly and maximize returns.
As legendary investor Warren Buffet put it, “Be fearful when others are greedy and greedy when others are fearful.” When the markets dip, smart investors see discounts and opportunities.
One of the best places to look for deals during periods of market volatility are cheap stocks trading under $20 per share. While risker than blue chip stocks, cheap stocks allow investors to snap up more shares and capitalize on upside potential.
This article highlights 7 affordable stocks costing less than $20 per share that have strong fundamentals and analyst upside projections. These cheap stocks to buy now present excellent opportunities for investors, even those just starting with $100.
While some industries like tech and EV stocks have garnered much attention, there are lesser known gems trading at steal valuations across market sectors worth exploring.
Now let’s dive into the intelligent investments waiting to be uncovered.
Ford Stock (F)
- Ford stock divident yield 7.21%
- Stock price $13.31 as of November 18
- Market capitalization: $53.4 billion
- P/E ratio: 6.06
The American automotive icon Ford (NYSE: F) has made trucks, SUVs, and muscle cars for over 100 years. While Ford may not seem like an obvious choice among growth stocks, at under $20 per share, Ford offers compelling value and dividend income.
Trading at just 0.25 forward price-to-sales and a market cap of $53 billion, Ford is significantly underpriced relative to competitor GM at $58 billion. Ford has a strong track record of performance, producing ~4 million vehicles in 2021 and on pace to deliver over 2 million EV models annually by 2026.
Here are 3 reasons why value investors should consider buying the stock dip:
1. Excellent Dividend History
With a dividend yield of 7.21%, Ford stock offers reliable dividend income potential during volatile markets. Ford recently upped its dividend payout to reward loyal shareholders.
The automaker has consistently paid dividends since 2012, even during industry struggles, demonstrating its stability and commitment to returns.
2. Investments in Growth Areas
As consumer preferences evolve, Ford is strategically positioned to benefit from increased EV and connected vehicle demand. The company recently announced huge investments towards boosting annual EV production to over 2 million vehicles by 2026.
Ford’s new F-150 Lightning pickup sped to market as the #2 best-selling truck in America, showcasing its innovation and performance chops. Investment in EV and connectivity technology will help drive growth.
3. Undervalued from Potential
Trading below historical average valuations, analysts see over +100% upside in the next 12 months if execution remains stable. The company expects $11.5 billion in adjusted EBIT in 2023, representing impressive growth potential.
Ford’s price-to-earnings ratio of just 6x also points to possible value gaps relative to 10x industry median. Once macro conditions improve, investors buying at today’s discount could profit enormously.
While risks remain around production delays and market volatility, long term investors could generate substantial returns from future growth and dividends.
Kinross Gold Stock (KGC)
- Stock price $4.04 as of November 18
- Market capitalization: $5.01 billion
- Forward P/E ratio: 13.3
- Annual dividend yield 2.26%
Whereas stocks like Ford represent value, Kinross Gold Corporation (NYSE: KGC) shows growth and inflation hedge potential, especially if gold prices rebound. This makes KGC one of the best cheap stocks under $5.
Kinross Gold operates mines that extract precious metals like gold and silver. With inflation rampant globally, gold has historically been an effective hedge. If the Fed hikes rates further, gold could explode higher benefitting KGC stock.
Here’s why Kinross presents strong upside:
1. Low-Cost Gold Production
Unlike speculative miners, Kinross Gold has been efficiently operating assets since 1993. With all-in sustaining costs of just $1,051 per ounce, Kinross generates strong cash flow, even if gold pulls back slightly.
The company produces ~2.1 million gold equivalent ounces annually from a diversified portfolio of mines in the Americas, West Africa and Russia. Low-cost structure helps weather downturns.
2. Future Growth Potential
Despite asset sales to exit Russia, Kinross reaffirmed 2022 guidance and expects to grow production by 20% to 2.9 million Au eq. oz. by 2025. The company has no debt maturities until 2029, providing financial flexibility.
As macro uncertainty persists, Kinross offers investors leveraged exposure to potentially surging precious metal values. This growth runway makes it a top stock to buy.
3. Attractively Priced Upside
With a forward P/E ratio of just 13x compared to industry at 19x, Kinross appears undervalued given forecast production jumps. The stock also pays a quarterly dividend of $0.03 per share for additional income.
If gold rallies back to 2012 highs above $1,800/ounce, analysts see Kinross gaining over 90% upside. Buying before the next bull cycle could generate enormous returns.
Despite some asset concentration concerns, Kinross’ mix of growth, value and inflation protection remain compelling reasons to add exposure.
United Microelectronics Stock (UMC)
- Stock price $7.04 as of November 18
- Market capitalization: $17.39 billion
- Forward P/E ratio: 9.8
- Annual dividend yield: 7.95%
Semiconductor manufacturers like United Microelectronics Corp (NYSE: UMC) play a pivotal role in supplying key technology components globally. Despite strong long term demand trends, the industry remains cyclical leading to discounted equity valuations.
As one of the top 3 semiconductor foundries by market share, United Microelectronics represents a relatively stable business. However, with shares pulling back over 40% in 2022, UMC stock now offers investors value.
Here are some of the reasons why analysts see over 50% upside potential for UMC stock:
1. Resilient Margins Through Cycles
Despite demand fluctuations, UMC has maintained gross margins above 30% since 2018 thanks to disciplined cost management and operating efficiency. The company’s trailing 5-year EBITDA and net income growth also outpace leading peers.
United Microelectronics’ flexible business model produces solid returns across both upcycles and downturns. This resiliency makes it a smart semiconductor pick.
2. Strategic Customer Base
With cutting-edge 28nm and 40nm manufacturing technology, UMC caters to a niche market not directly competing with titans like TSMC and Samsung. Long-term supply agreements also provide cash flow visibility.
United Microelectronics’ customers include leading analog chip and microcontroller suppliers serving the automotive, industrial and consumer electronics end-markets. These mission-critical applications support stable revenues.
3. Healthy Balance Sheet
Despite investing over $3 billion in new facilities since 2020, UMC maintains a strong financial position with cash and short-term investments of $6.1 billion against only $500 million in debt.
The company also rewards investors through stock buybacks and an extremely generous annual dividend around 8%. Financially sound firms tend to recover strongly during market rebounds.
As underlying semi demand powers innovation across sectors, UMC stock offers investors rare value under 10x forward earnings in this expanding space.
NIO Stock (NIO)
- Stock price $10.59 as of November 18
- Market capitalization: $17.8 billion
- 2022 EV sales: 90,245 vehicles
- Price/Sales ratio: 2.8x
As electric vehicles disrupt the automotive sector, manufacturers like NIO Inc (NYSE: NIO) remain well-positioned to ride the industry tailwinds. Chinese EV firms also benefit from favorable government policies and access to the world’s largest car market.
Despite turbulence in 2022 around supply chain issues, the pullback in NIO shares provides a buying opportunity for investors before accelerated growth resumes.
Here’s what makes analysts bullish on Nio with over 140% upside seen:
1. Innovative Brand with Loyal Following
Founded in 2014, Nio was one of the first automakers to exclusively focus on smart and premium electric SUVs, crossover and sedans. The company has built an innovative brand image focused on performance and technology.
This resonates strongly with younger environment-conscious Chinese consumers willing to pay premium prices. NIO also enjoys industryleading brand loyalty and customer satisfaction rates.
2. Market Share Expansion Underway
While still behind rivals BYD and Tesla in monthly sales, Nio is aggressively expanding model availability across different price points to target mass market buyers.
The new ET5 mid-size sedan could prove very popular with younger first-time EV buyers. Capacity investments support over 600k annual deliveries by 2025, representing huge growth ahead.
3. Innovative Battery Swap Model
Nio stands out through its industry leading battery swap technology which exchanges depleted packs for fully charged ones in under 5 minutes. This breakthrough addresses range anxiety and recharging headaches for customers.
By separating batteries from vehicles, Nio also reduces manufacturing costs and working capital needs. The company aims to deploy 700 swap stations globally by 2025 showcasing execution.
As the EV wave accelerates, Nio’s technology focus makes it a leading Chinese auto innovator poised to ride surging adoption trends starting in 2023.
Destination XL Stock (DXLG)
- Stock price: $6.73 as of November 18
- Market capitalization: $414.97 million
- Price/earnings ratio: 8.75
- Projected 3–5 year EPS growth: 15%
A niche player flying under Wall Street’s radar is Destination XL (NASDAQ: DXLG). This specialty retailer provides high-quality clothing to overlooked big & tall male consumers in sizes up to 6XL.
Despite a $23 billion addressable market, the big & tall men’s segment only garners ~3% of the overall menswear category today according to NPD Group. However, as店 the average American male’s waistline expands, DXLG is uniquely positioned to seize share.
Here are 3 reasons DXLG belongs on growth investors radar:
1. Differentiated Omnichannel Model
Destination XL operates one of the largest omni-channel platforms serving big & tall customers through 300+ stores and a branded ecommerce site at DXL.com. This deep distribution network drives loyalty and repeat purchases.
The typical DXL shopper also has higher income and spends more per transaction highlighting profitability upside. Focusing exclusively on underserved big & tall buyers gives DXLG pole position as preference shifts.
2. Significant White Space for Market Share Gains
Despite legacy department stores like Macy’s, Kohl’s and Nordstrom closing locations, DXL is actively opening new stores to blanket the country. These physical and digital capabilities help attract new customers and drive higher spend.
Destination XL estimates it current controls less than 4% market share in big & tall clothing, showcasing enormous white space for category leadership down the road. Early mover advantage leads to long term gains.
3. Strong Financial Condition to Fund Growth
Under the leadership of CEO Harvey Kanter since 2019, Destination XL has achieved consistent sales growth and margin expansion. The company holds an impeccable balance sheet with $92 million in cash against only $3.5 million in long-term debt.
Profitability milestones hit and high liquidity allow management to self-fund store openings and inventory growth. Investment today should drive higher earnings over time.
For investors seeking niche exposure to an underserved retail category, DXLG checks the boxes through differentiated capabilities and untapped market potential.
SoundHound AI Stock (SOUN)
- Stock price $1.54 as of November 18
- Market capitalization: $302 million
- 2022 revenues: $13.3 million
- Projected 2026 total addressable market: $160 billion
Another speculative yet intriguing tech play is artificial intelligence platform developer SoundHound AI Inc. (NASDAQ: SOUN). Despite volatility since its SPAC merger, SoundHound’s voice AI technology shows promise.
The global voice assistant market is forecast to grow 20 fold to reach $50 billion by 2028. With big name partners and next-gen innovations, SoundHound aims to challenge titans Amazon, Apple, Microsoft and Google who dominate currently.
Early investors could profit immensely if SoundHound gains traction. Here is the bull case:
1. Breakthrough Independent Voice AI
Unlike rivals dependent on first-party devices, SoundHound offers an interoperable voice AI that works seamlessly across third-party products. This platform play opens larger partnership opportunities.
The company’s speech recognition accuracy also scores 93%+ even with complex conversational queries outperforming Alexa, Siri and others. Patented architecture and over 300 million trained voices drive differentiation.
2. Deep Ecosystem Integration
Through strategic collaborations with leading businesses such as Mercedes, Deutsche Telekom, Mastercard and Tencent, SoundHound is embedding its technology into diverse scenarios from smart homes and vehicles to payment systems.
These high profile wins showcase product capabilities bringing next-gen voice interactivity to key industries. Large embedded partners should help drive usage and monetization.
3. Numerous Monetization Pathways
Unlike pure service models, SoundHound utilizes licencing, usage-based pricing and subscription plans to generate revenues from partners. Tactically exposing its tech across verticals opens revenue streams as volume scales.
Management expects strong growth in big data, connected vehicles, advertising and business services like call monitoring and analytics. SoundHound’s software centric approach enhances efficiency.
For investors comfortable with risk, buying shares early before mainstream adoption could generate exponential returns over 5-10 years. However, execution challenges remain around developing the ecosystem.
ReWalk Robotics Stock (RWLK)
- Stock price: $0.91 as of November 18
- Market capitalization: $57.5 million
- Cash on hand: $32.6 million
- 2022 revenue growth: 394.4%
Rounding out our cheap stocks is Israel-based pioneer in robotic exoskeleton technology ReWalk Robotics Ltd (NASDAQ: RWLK). The company’s FDA approved wearable system allows wheelchair users with spinal cord injuries to stand and walk.
Trading under $1 per share with high volatility, ReWalk certainly carries risks. However between surging industry tailwinds and strengthened financial positioning, the next couple years could witness a breakthrough.
Here are the positives according to analysts:
1. Unique Proposition Resonates
Unlike traditional wheelchairs, ReWalk delivers revolutionary mobility, health and psychological benefits to users helping them regain function and independence.
The technology allows individuals with paraplegia to walk again using ambient sensors and on-board computers to initiate movement. This differentiation makes ReWalk a leader in exoskeleton rehabilitation equipment globally.
2. Market Potential Opening Up
Advances in robotics, AI and cloud technology now make widespread exoskeleton adoption viable across medical, workplace and military applications. With aging populations and spinal injury rates rising, demand outlook looks strong.
Key catalysts include expansion into stroke rehabilitation systems and securing regulatory approval for personal device sales at homes. As awareness and access increase, ReWalk’s first mover position offers platform potential.
3. foundations Strengthening
After years of financial losses, ReWalk made tremendous progress towards profitability in 2022 growing revenue almost 400% year-over-year. New management helped drive improved sales execution and reduced operating expenses.
With the most robust balance sheet ever now at over $30 million cash, ReWalk can strategically invest in launching new products and expanding training infrastructure to drive commercial adoption in 2023 & beyond. Turnaround signs visible.
Given the immense addressable market coming into focus, ReWalk offers investors exposure into an intriguing healthcare technology niche touching lives via mobility empowerment. If key catalysts hit, substantial share price appreciation could follow at this small cap stage.
Conclusion
Finding intelligent investments with reasonably priced shares can unlock significant upside potential for investors, especially during uncertain markets. The 7 cheap stocks covered in this article represented affordable opportunities across market sectors primed for tomorrow.
While volatility will persist broadly, sound research into company fundamentals helps uncover gems ready to provide outsized returns once conditions improve. Portfolio diversification by industry can further help balance risk profiles as economic cycles evolve.
For investors new to stock analysis, focusing on overlooked players in fertile industries can generate huge gains long term without necessarily needing to scout the latest flashy disruptors. Sometimes slow and steady still wins the race through compounding.
Even $100 first investments, when carefully directed towards future looking growth companies at value prices, have the ability to blossom into so much more over time through consistent contributions.
