While it’s a general rule of thumb that you get what you pay for, in the market, you can sneak in some overlooked compelling discounts, which might be the case with the below best affordable stocks to invest in. With a price tag under $50, these enterprises facilitate approachability while also delivering on the quality or relevance components.
Of course, investors don’t want to just jump into cheap stocks with potential for growth simply because of their price tag. Instead, you want to target enterprises that offer a reasonable chance for upside and that they simply got overlooked for whatever reason. Or, in other cases, you might find that the top undervalued stocks under $50 encountered a rough patch because most investors don’t believe they can overcome certain challenges. For contrarians, this setup may offer you the chance for surprisingly robust gains.
Simulations Plus (SLP)
A science-focused software specialist, Simulations Plus (NASDAQ:SLP) develops absorption, distribution, metabolism, excretion, and toxicity modeling and simulation software for the pharmaceutical and biotechnology. As well, it provides solutions for the industrial chemicals, cosmetics, food ingredients and herbicide sectors. So far this year, it’s one of the top-performing entities among the best affordable stocks to invest in.
Since the Jan. opener, SLP gained 21% of equity value. However, it does offer a relative discount in that during the past 365 days, it slipped nearly 8%. Another major reason to consider SLP as one of the cheap stocks with potential for growth is analyst sentiment. Currently, SLP carries a unanimous strong buy view. Also, the experts’ average price target lands at $61.50, implying almost 37% upside potential. Financially, Simulations Plus carries the potential to being one of the securities with high return on investment (ROI). In particular, it commands excellent strengths in the balance sheet. As well, its Altman Z-Score pings at 63.64, implying extremely low risk of bankruptcy.
Headquartered in Luxembourg, Ternium (NYSE:TX) is a manufacturer of flat and long steel products. Its production centers are located in Argentina, Brazil, Mexico, Guatemala, Colombia, and the U.S. Per its public profile, Ternium is also the leading steel company in Latin America, which could be intriguing given the region’s potential for long-term growth.
To be sure, in the trailing one-year period, TX dropped 14% of equity value. However, it’s on a recovery path this year, gaining nearly 29%. Though steel-related enterprises carry viability risks due to economic uncertainties, Ternium somewhat soothes nerves with a strong financial profile. For example, its cash-to-debt ratio pings at 3.36, ranked above 82.6% of its peers. Also, the company’s three-year revenue growth rate clocks in at 17.2%. In contrast, the sector median sits at 9.05%.
Lastly, analysts peg TX as a consensus strong buy. Their average price target is $50.70, implying nearly 32% upside potential. Therefore, it’s a solid idea for best affordable stocks to invest in.
Tencent Music Entertainment (TME)
One of the trickier propositions for best affordable stocks to invest in, Tencent Music Entertainment (NYSE:TME) certainly offers a low price point. Trading hands at only $7.40 at last count, it’s psychologically attractive. However, it’s not cheap in the fundamental sense, especially with a market capitalization nearing $13 billion. Also, in the past 365 days, TME skyrocketed to the tune of almost 81%. Now, with a year-to-date loss of 14%, TME sits at a relative discount. And it’s objectively one of the top undervalued stocks under $50 as well. Per Gurufocus, the market prices TME at a trailing multiple of 5.52. As a discount to earnings, Tencent ranks better than 72% of companies listed in the steel industry.
If you’re also swayed by analyst opinion, TME carries a consensus view of moderate buy. On average, their price target lands at $9.80, implying over 32% upside potential. Moreover, the most recent assessment – by Bank of America Securities’ Lei Zhang – sees a price of $11, implying nearly 49% growth. Fundamentally, the China consumer market may prove viable for Tencent Music. Thus, it could be a candidate for stocks with high ROI under $50.
Based in Israel, InMode (NASDAQ:INMD) provides innovative treatments for the face, body, skin and women’s wellness. What’s particularly attractive about InMode is its non-invasive and minimally-invasive options. According to Grand View Research, the global minimally invasive surgical instruments industry may expand at compound annual growth rate (CAGR) of 9.8% from 2022 to 2030. At the culmination of the forecast period, the sector may hit revenue of $60.65 billion.
On paper, INMD easily ranks as one of the best affordable stocks to invest in. First, the underlying company commands a strong balance sheet. In particular, its cash-to-debt ratio stands at 162.78. As well, it Altman Z-Score pings at 27.02, implying high stability and extremely low bankruptcy risk.
Operationally, InMode posts an impressive three-year revenue growth rate of 37.3%. Also, its EBITDA during the same period is 43.5%, better than 86.12% of the competition. Even better, INMD prices at a forward multiple of 12.33. As a discount to projected earnings, InMode favorably slips under 94.9% of its peers. Combined with analysts pegging shares a unanimous buy, INMD ranks among the bargain stocks for long-term investors.
Epsilon Energy (EPSN)
Hailing from resource-rich Houston, Texas, Epsilon Energy (NASDAQ:EPSN) is a North American on-shore focused independent oil and natural gas company. Per its website, Epsilon engages in the acquisition, development, gathering and production of oil and gas reserves. Though a pertinent component of the broader economy, Epsilon hasn’t had the best start to the year. Since the beginning of Jan., EPSN dipped over 22% of equity value.
Admittedly, the hydrocarbon energy market has been deflated, even with the geopolitical crisis that seemingly threatened to spiral energy costs out of control. However, it’s quite possible that this counterintuitive framework might not last indefinitely. Already, we’ve seen international powers challenge U.S. hegemony (for lack of a better word). Eventually, we could see higher energy prices.
What makes Epsilon attractive as one of the best affordable stocks to invest in centers on operational resilience. For instance, its three-year revenue growth rate clocks in at 44.8%, which outflanks 91.92% of sector players. On the bottom line, the company’s trailing-year net margin is 50.33%, above nearly 93% of its peers. Priced at a trailing multiple of 3.56, EPSN also ranks as one of the top undervalued stocks under $50.
Gulf Resources (GURE)
A lesser-known enterprise among the best affordable stocks to invest in, Gulf Resources (NASDAQ:GURE) is a China-based chemical company. According to its website, Gulf’s major business centers on the production of bromine and crude salt. Further, the company states that four of its factories are currently in operation while another three await government approval. Since the beginning of this year, GURE slipped more than 8%.
Moreover, in the trailing one-year period, GURE gave up over 29% of equity value. Still, that could tempt folks seeking the top undervalued stocks under $50. Notably, GURE trades at a trailing multiple of 3.09. Also, the market prices shares at 0.12-times tangible book value.
Operationally, Gulf carries a three-year revenue growth rate of 80.5%, ranking above 98.43% of the competition. In full disclosure, such a growth rate likely won’t be sustained. However, because bromine production is relevant to many industries – particularly electric vehicles – GURE might be worth a look.
NuScale Power (SMR)
Given that we’re talking about best affordable stocks to invest in, I couldn’t help but pound the table again for NuScale Power (NYSE:SMR). Specializing in small modular reactors or SMRs, NuScale may forever change how society views nuclear power facilities. Unlike traditional powerplants, SMRs feature a smaller physical footprint, allowing for more flexible integration. In addition, these groundbreaking facilities feature advanced safety protocols, aiding in the public evangelism arena.
Perhaps most importantly, NuScale empowers the decentralization of energy. Rather than having one giant nuclear power plant serve multiple needs, SMRs enable a wider footprint of several power-generating facilities. This way, NuScale can potentially make previous economically unviable endeavors – such as desalination – practical and profitable.
In full disclosure, SMR represents an awfully risky enterprise. Since the Jan. opener, shares slipped 24%. Since making its public market debut, NuScale gave up about 23% of market value. However, it’s not totally speculative. For instance, the company carries zero debt, affording it incredible flexibility. Therefore, it could be one of the stocks with high ROI under $50.
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.