When the stock market is suffering this badly, it’s pretty easy to find cheap stocks that are trading at a discount. But finding those that have the best potential to return to their winning ways requires some expertise and a little finesse.
True, the major indices are down big these days, anywhere from 13% for the Dow Jones Industrial Average to 25% for the tech-heavy Nasdaq composite. Fears of runaway inflation, rising interest rates, the lingering Covid-19 pandemic, the war in Ukraine and the possibility of a recession are doing a number on returns.
Those are just a few reasons why it’s good to have some tools to help you evaluate the market — particularly when stocks are bleeding red pretty much anywhere you look.
My Portfolio Grader evaluates on a variety of metrics, so that’s what we’ll use to look for some low-cost stocks that are seriously undervalued these days. All of these names are trading for less than $10 (and many are in penny stock territory), but that may not last forever.
Don’t be surprised when these names start moving higher — and then you would have wished you grabbed some or all of these cheap stocks that are trading at a discount.
miniature oil barrel and oil well figures on top of stack of money
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Crescent Point Energy (NYSE:CPG) is a Canada-based oil company that is in the exploration and production sectors. Unlike oil companies on the other side of the globe, Crescent Point has exposure to the Bakken Shale, which lies across Montana, North Dakota and Canada.
For the first quarter, CPG stock showed revenue of $838 million, meeting analyst expectations. Earnings per share was 32 cents, which was right in line with what the Street expected.
Crescent Point stock is up 36% so far this year, and has an “A” rating in my Portfolio Grader.
Destination XL Group (DXLG)
A hand reaches for an article of clothing on a hanger from a rack labeled XL.
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Retailer Destination XL Group (NASDAQ:DXLG) is a clothing retailer that caters to men that wear extra-large clothing sizes and larger. And that’s an important market, as the obesity rate in the U.S. continues to surge higher.
Guys who are bigger than average sometimes have a hard time finding clothes that fit well — and shorts and a T-shirt aren’t going to cut it at a business meeting. So Destination XL Group is the place to go for bigger guys to get quality clothes with a tailored, professional fit.
Earnings for fiscal Q1 2023 were $127.66 million, beating analysts’ estimates for $114.23 million. Earnings per share were also a pleasant surprise, with analysts expecting 9 cents per share but the company posting 20 cents EPS.
DXLG stock is a bargain right now, as it’s down roughly 24% for the year. But the stock looks to be a long-term winner, and it’s sporting an “A” grade in my Portfolio Grader.
Gran Tierra Energy (GTE)
Illustration of oil pump jacks on sunset sky background to represent oil and gas stocks
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Next up is another energy company, Gran Tierra Energy (NYSEAMERICAN:GTE). Unlike Crescent Point, which operates in the northern U.S. and Canada, Gran Tierra focuses its efforts on exploration and production projects in Latin America.
GTE stock is down big right now — part of that is surely because Colombia elected its first leftist leader, Gustavo Petro, who is seen as an opponent of oil exploration. The stock has fallen by 35% since early June. But even so, it still is showing a 59% gain so far in 2022.
So, this may be the time to jump into GTE stock and enjoy the bounce higher. Revenue for the first quarter came in at $174.57 million, which was 83% better than a year ago.
GTE stock has an “A” grade in my Portfolio Grader.
Landsea Homes (LSEA)
Single family homes. Real estate
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With rent prices skyrocketing across the country and interest rates also on the move, it’s an interesting time for homebuilding stocks. Landsea Homes (NASDAQ:LSEA) operates in a few competitive markets, including Arizona, Texas and Florida.
On top of that, it has entered the mortgage business with the launch of Landsea Mortgage, which COO Mike Forsum says will give customers a “streamlined and full-service loan process.”
With a rollercoaster 2022, LSEA stock is down 6% so far this year — better than the overall market, but still plenty of room to recover and move higher. Earnings for the first quarter included revenue of $316.23 million, which was much better than analysts’ forecasts of $241.32 million. Earnings per share nearly tripled the estimates, coming in at 71 cents versus the 24 cents EPS that experts predicted.
There’s a lot to like about LSEA stock, which is why it has a “B” rating in my Portfolio Grader.
Pangaea Logistics (PANL)
Plenty of shipping containers stacked at the Port of Hamburg and blue sky
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While I admit it’s fun to invest in flashy, cutting-edge products like 5G, semiconductors and electric vehicles, sometimes you can find great investment opportunities in some not-so-flashy places. That brings us to Pangea Logistics (NASDAQ:PANL), which is a dry bulk shipper in the U.S. Dry bulk includes things like grain, iron ore, coal, copper, corn and other dry commodities.
PANL stock is up 22% so far this year, but that’s after a big drop of 34% over the last few weeks. There are indications, however, that Pangaea is bouncing off its bottoms.
Earnings for the first quarter of 2022 included revenue of $191.76 million, which was slightly below analysts’ estimates of $192.85 million. Earnings per share was a winner, though, at 35 cents per share versus the Street’s expectations for 20 cents per share.
PANL stock has a “B” rating in my Portfolio Grader.
Urban One (UONEK)
A woman listens to music on headphones while standing against a wall in an outdoor environment.
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Urban One (NASDAQ:UONEK) is a media stock that targets a Black audience with its Radio One media properties, which includes radio stations on many U.S. urban markets. It also has TV One, which reaches 43 million households, and an online presence called iOne Digital that reaches another 20 million unique monthly visitors.
Urban One has some other interests as well, including its own credit card. It tried unsuccessfully last year to build a casino in Virginia.
But while other broadcast media companies are in the red this year, UONEK stock is up 11%. Earnings for the first quarter included $112.35 million in revenue, which was an increase of 23% from a year ago.
Urban One stock has a “B” rating in my Portfolio Grader.
TransGlobe Energy (TGA)
Image of an oil wells with an orange-red sky at dusk
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The third oil exploration and production company on the list is TransGlobe Energy (NASDAQ:TGA), which has business in Egypt as well as Canada. While the stock is seeing gains in 2022 thanks to rising oil prices, the company is also boosting the value of TGA stock. It announced plans to return at least 75% of its annual free cash flow back to shareholders via dividends and share buybacks.
TransGlobe stock is up 12% so far this year, despite a pullback over the last month that hints that the possibility of a solid late summer bounce.
Earnings in the first quarter included revenue of $48.8 million, a vast improvement from the loss of $11 million recorded in the same quarter a year ago.
TransGlobe stock has an “A” rating in my Portfolio Grader.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
