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 9% and 33% in 2022, 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.
If the events of the past year taught us anything, it’s that we shouldn’t chase narratives without further investigation. Each of the names below has several objectively strong qualities. For some, it’s undervalued shares. Others benefit from rock-solid balance sheets.
While 2023 is likely to be another year marked by short-term volatility, long-term investors should consider these stocks under $50 to buy and hold.
Stocks Under $50 to Buy and Hold: Werner Enterprises (WERN)
Headquartered in Omaha, Nebraska, Werner Enterprises (NASDAQ:WERN) is a leader in the transportation and logistics industry that serves the U.S., Mexico and Canada. Macroeconomic headwinds have weighed on shares, with WERN losing around 15% in 2022. But it’s off to a strong start in the new year, with shares rising 4.2% so far in 2023. Moreover, in the trailing six months, the stock has gained nearly 9%.
Werner has a solid overall financial profile. On the top line, the company features a three-year revenue growth rate of 5.7%, exceeding 64% of industry peers. On the bottom line, Werner enjoys at least 10 years of consecutive profitability.
Wall Street analysts consider the stock a “moderate buy,” according to TipRanks, with an average price target of $47.75, implying upside of nearly 14% from the current level. The smart money has been showing interest in WERN, as well, with a steady increase in hedge fund buying since the first quarter of 2022.
Marcus & Millichap (MMI)
Based in Calabasas, California, Marcus & Millichap (NYSE:MMI) is an investment brokerage firm specializing in sales, financing, research and advisory services for commercial real estate. Softness in the commercial real estate market due to a weakening economy and the work-from-home trend hit MMI in 2022, with shares losing nearly a third of their value. But the stock has stabilized recently, gaining 5.6% in the past two and a half weeks and 15% from its late-September low.
Some are predicting that more remote workers are likely to return to the office this year, especially as the economy and labor market weaken. According to a recent study by the Society for Human Resource Management, nearly 70% of supervisors say remote workers are “more easily replaceable than onsite workers.” And more than 6 in 10 said that working remotely full-time is “detrimental to employees’ career objectives.” This, along with data indicating more workers are returning to offices in major metro areas, shows that in the battle to get workers back into the office, it’s the bosses who are winning, writes Forbes contributor Jack Kelly.
Marcus & Millichap should benefit from a return to pre-pandemic norms in the short term and an eventual economic recovery in the longer term.
Currently, shares are considered ” significantly undervalued” based on GuruFocus’ proprietary calculation. MMI is also undervalued compared to its sector based on its price-to-sales ratio of just below 1 compared with an industry median of 2.5.
Finally, hedge funds have been collectively increasing their position in MMI since Q1 of 2022, signaling the smart money is moving in.
Stocks Under $50 to Buy and Hold: National Research (NRC)
Lincoln, Nebraska-based National Research (NASDAQ:NRC) collects large volumes of healthcare consumer data to provide analytics and insights aimed at improving patient and employee experiences. The stock held up much better than the broader market in 2022, falling just 8% compared with a 19% decline for the S&P 500.
This outperformance is likely due in part to the company’s strong profitability metrics. Its gross margin of 62.3% is better than more than 70% of its peers and affords the firm pricing flexibility for its products and services. Further, its net margin stands at 22.9%, beating out 93% of industry players. Notably, NRC’s return on equity pings at 45%, better than 95% of its peers and signaling a superior capacity to convert equity financing into profits.
National Research has a three-year revenue growth rate of 10.6%, which is slightly better than the industry median. However, its three-year book growth rate of 63.6% beats out nearly 91% of its rivals.
Lastly, hedge funds have been increasing their positions in NRC since early 2022.
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 26% loss in 2022 – near-term momentum has been bullish. Shares are up 23% since hitting a low in mid-October.
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 these sectors will suffer a substantial loss of demand, Kulicke and Soffa Industries’ business should continue to grow.
The firm displays all-around excellent performance metrics. Undergirded by a strong balance sheet, Kulicke and Soffa delivers sector-leading revenue growth and profit margins. For instance, its three-year revenue growth rate of 44.2% is better than nearly 95% of the industry while its net margin of 28.8% is better than 92% of its peers.
KLIC looks undervalued, trading at 6.4 times trailing 12-month earnings. In contrast, the industry’s median price-earnings ratio is 16.2.
Finally, analysts rate KLIC a “moderate buy” with an average price of $60, implying upside of 33% from current levels.
Stocks Under $50 to Buy and Hold: MarineMax (HZO)
Based in Clearwater, Florida, MarineMax (NYSE:HZO) is a boat dealer specializing in both new and used boats. In 2022, HZO fell 47%. However, shares appear to be stabilizing, rising 16% 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 “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.
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 lost 25% in 2022. However, a 31% 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 15.9 times trailing earnings, comparing favorably to the sector median of 25.5.
Finally, hedge funds collectively increased their position in CCRD in the most recent quarter.
Stocks Under $50 to Buy and Hold: The New York Times (NYT)
Controversial because of the nation’s divisive political paradigm, The New York Times (NYSE:NYT) won’t appeal to everyone. Nevertheless, it represents one of the most well-known mass media companies in the world. While shares lost 32% in 2022, they are up 21% from their late-September low and 3.5% in the first days of 2023.
Shares’ recent strength may be due in part to the recent chaos among House Republicans and their inability to elect a speaker, pointing to internal GOP divisions. For Democrats and liberal readers of The New York Times, the turmoil symbolizes content gold.
According to GuruFocus, the company enjoys a strong balance sheet and is unburdened with debt. Further, its Altman Z-Score of 5.6 reflects a low bankruptcy risk. As well, The New York Times features better-than-average operating and net margins.
Analysts rate NYT a “moderate buy” with an average price target of $37.67. This implies 12.5% upside potential from the current price point. And hedge funds have been collectively upping their position since Q1 2022.
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.