11 Stocks to Buy Too Cheap to Pass Up in 2024 | Summary and Q&A

TL;DR

Cheap value stocks are outperforming growth stocks, driven by the rise in interest rates. This analysis highlights the best cheap stocks to buy in each sector, providing insights into their valuation and potential returns.

Key Insights

• 💄 Value stocks are making a comeback after a decade of underperformance compared to growth stocks.
• ☠️ Interest rate trends play a crucial role in the relative performance of value and growth stocks.
• 😫 Each sector has its own set of cheap stocks offering potential value and returns.
• ❓ Warren Buffett's investment in certain value stocks indicates their attractiveness.
• 🎁 Cheap stocks may present opportunities for rebound and potential acquisitions.
• 🏛️ Building a diversified portfolio of cheap stocks across sectors can mitigate risk and capture value.
• 🥳 Paying attention to valuation metrics like price-to-sales and price-to-earnings ratios is essential in identifying cheap stocks.

Transcript

cheap stocks are back after more than a decade of growth stocks beating value here we see the Vanguard Growth ETF ticker vug and purple absolutely obliterating the Vanguard value Fund ticker vtv and the overall Market in the five years to 2022 but now forces are in play that have brought value back for the win since 2022 cheaper value stocks have l... Read More

Questions & Answers

Q: Why are value stocks outperforming growth stocks?

Value stocks have gained momentum due to the rise in interest rates. As rates increase, the discounted value of future growth that benefits growth stocks declines, making value stocks more attractive.

Q: Why is DaVita Inc considered a cheap stock in the healthcare sector?

DaVita Inc (DVA) is trading at a significant discount to its long-term average valuation, with low price-to-sales and price-to-earnings ratios. Additionally, Warren Buffett's Berkshire Hathaway owns a substantial stake in the company, further highlighting its value.

Q: What are the potential risks of investing in Stitch Fix?

Stitch Fix (SFIX) is a high-risk investment due to its lack of profitability and ongoing cash burn. While the stock is trading at a cheap valuation, there is uncertainty surrounding its ability to achieve profitability and competition in the streaming market.

Q: Why is NRG Energy considered a cheap stock in the utilities sector?

NRG Energy (NRG) offers a favorable valuation with low price-to-sales and price-to-earnings ratios. The company has a strong track record of dividend growth and operates in the regulated utilities market, providing consistent cash flows.

Summary & Key Takeaways

• After a decade of growth stocks outperforming value stocks, the tide has turned, and value stocks are gaining momentum.

• Healthcare sector: DaVita Inc (DVA) is a cheap stock trading at a significant discount to its long-term average valuation.

• Real estate sector: Medical Properties Trust (MPW) offers a high dividend yield and trades at a lower valuation compared to its industry peers.

• Technology sector: Intel (INTC) appears to be a cheap stock but faces challenges in terms of earnings growth compared to competitors like AMD.

• Utilities sector: NRG Energy (NRG) is a cheap stock with a strong track record of dividend growth and favorable valuation ratios.

• Industrial sector: Jeld-Wen Holdings (JELD) is trading at a multi-year discount, offering a potential rebound opportunity.

• Consumer discretionary sector: Stitch Fix (SFIX) is a high-risk, high-reward play with a data-driven platform and potential for acquisition offers.

• Consumer staples sector: Cal-Main Foods (CALM) is a dominant player in the fresh egg market, with stable revenue and attractive dividend growth.