The Dow, the S&P 500, and Nasdaq all jumped again Tuesday, after posting 7% gains on Monday. The positivity comes as Wall Street appears pleased with signs that social distancing is working in the U.S. and elsewhere to help flatten the coronavirus curve.
The recent climb is part of a larger two week run that has seen the S&P 500 jump roughly 20% from its March 23 lows, with the Dow making a similar move. This helps show that pulling out of the market completely during downturns and volatility likely prevents you from grabbing some big bounces.
That said, volatility could remain because no one really knows when the economy will start to return anywhere close to normal even though health officials and the White House have said that models suggest that the number of coronavirus cases is likely to reach a peak sometime soon.
Nonetheless, investors interested in “cheap stocks” might want to be on the hunt now for stocks to buy, or at least add to their watchlists because the market is a forward-looking entity and the last two Weeks help demonstrate that Wall Street is starting to look to better days.
Today, we dive into three cheap stocks trading under $10 a share. We also tried to focus on stocks from more recession-resilient industries…
Amcor plc AMCR
Prior Close: $8.22 USD
Amcor completed its purchase of Bemis in June 2019 to create a massive global packaging powerhouse that services a variety of industries, from food and beverage to pharmaceuticals and personal care. The company’s offerings include flexible and rigid packaging, specialty cartons, and more. Amcor has also started to focus on making what it calls “increasingly light-weighted, recyclable and reusable” products that are made “using a rising amount of recycled content.”
Amcor’s push toward greater sustainability could prove key amid growing backlash to plastic and waste. Yet, plastic and paper packaging of all types remain vital around the globe and likely will for years to come. Looking ahead, our Zacks estimates call for Amcor’s fiscal 2020 revenue to jump over 34% to reach $12.71 billion, driven by its Bemis deal. Meanwhile, its positive earnings revisions activity helps it earn a Zacks Rank #2 (Buy) right now, alongside its “B” grades for Growth and Momentum in our Style Scores system.
Amcor also grabs a “B” grade for Value, and it is trading at a discount against its industry, the S&P 500, and its own three-year median at 12.8X forward 12-month Zacks earnings estimates. Perhaps most importantly, AMCR’s dividend yield rests at 5.63% right now, which crushes its industry’s average of 3.25% and the S&P’s 2.13%. Amcor shares have also soared over 40% since March 16 and they still have room to run before they reach their 52-week highs.
Sandstorm Gold Ltd SAND
Prior Close: $5.72 USD
Sandstorm is a gold royalty company that provides upfront financing to gold mining companies. The firm then receives the right to a percentage of the gold produced for the lifetime of that mine. SAND posted record fiscal year revenue in February, with sales up over 22% to $89.4 million. This top-line expansion was driven by record attributable gold equivalent ounces sold of 63,829 ounces, up from 57,646 ounces in 2018.
Sandstorm’s fiscal 2020 revenue is projected to jump another 27%, with its adjusted earnings expected to climb 44%. SAND sports an “A” grade for Growth in our Style Scores system and its longer-term earnings revisions activity remains elevated to help it hold a Zacks Rank #2 (Buy). Investors should also note that Sandstorm is part of our Mining – Gold industry that rests in the top 8% of our more than 250 Zacks industries.
Shares of Sandstorm have jumped along with the broader market over the last two weeks, up roughly 18%. Yet, SAND stock still has nearly 30% more room to run before it touches its 52-week highs. Sandstorm did withdraw its 2020 production guidance for the year in March due to possible coronavirus impacts. But the Vancouver-based firm said that it “has not received any direct notification of closures at any partner mine sites.”
Tesco PLC TSCDY
Prior Close: $8.38 USD
Tesco is a UK multinational grocery powerhouse that seems ready to withstand the coronavirus social distancing push that has hurt non-essential retailers. Britain’s market-leading supermarket chain has announced that it will ramp up hiring to help deal with increased coronavirus-based demand, alongside Amazon AMZN, Walmart WMT, and others. In March, Tesco said that it reached a deal worth more than $10 billion to sell its Asian businesses to Thai billionaire Dhanin Chearavanont.
The company also plans to return roughly $6.6 billion to shareholders after agreeing to the massive deal. Shares of Tesco have jumped over 13% in the last two weeks and have climbed 18% in the last three years, which slightly outpaces its industry’s average. Meanwhile, TSCDY’s 2.38% dividend yield tops Kroger’s KR 1.96% and the S&P 500’s average.
TSCDY is currently a Zacks Rank #3 (Hold) within an industry that sits in the top 35% of our more than 250 Zacks industries. The stock also sports “B” grades for both Growth and Momentum and an “A” for Value in our Style Scores system. Tesco’s adjusted fiscal year earnings are projected to climb nearly 22% on the back of roughly 13% stronger sales. Peeking further ahead, its bottom-line is expected to jump another 12% next year.
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