Investing in stocks priced under $50 can be attractive for several reasons. Firstly, these stocks are more affordable, allowing investors to purchase more shares with less money. This can provide diversification and the potential for greater returns if the stock price rises. Secondly, lower-priced stocks can generate higher percentage returns as even small price movements translate into significant gains. Thirdly, these stocks often exhibit more volatility, presenting opportunities for substantial gains if the company performs well. Additionally, many emerging companies and startups have stock prices under $50, allowing investors to participate in potential future blue chips from the early stages. However, choosing the right stocks that are sub-$50 is very hard because, more often than not, companies will not turn into the blue chips you hope for.
But I have made your life easier; these three stocks are the top three sub-$50 stocks in May 2024. If you buy in now, you will score a discount as they will skyrocket. CWCO, PATH and PLTR are all innovating technologies that increase their growth and profit opportunities.
Consolidated Water (CWCO)
Consolidated Water (NASDAQ:CWCO) designs, constructs, manages and operates water production and treatment plants primarily in North America. The company operates through four segments: retail, bulk, services and manufacturing. It produces potable water via reverse osmosis technology and supplies water to end-users, including residential, commercial and government customers. It is currently valued at $26.81.
CWCO has seen rapid growth last year, with year-on-year (YOY) quarterly growth of 87.30%. It has a profit margin of 16.42%, with an operating margin of 24.99%. This culminates in an operating cash flow of $7.97 million. Additionally, two analysts have suggested a price target of $39.50, representing a growth of 47.33%.
The utility sector is expected to grow at a CAGR of 9.51%, reaching $6.37 billion by 2027. This growth trajectory looks promising. However, CWCO stock will benefit from another vertical — desalination — the company’s government contracts in the Caribbean lead to stability in demand. Additionally, growing water demand is likely to increase demand for CWCO products.
With investors setting high price targets for CWCO and high institutional confidence, I don’t see why this stock shouldn’t be one of the undervalued stocks you choose to buy.
UiPath (PATH)
UiPath (NYSE:PATH) is a global software company specializing in robotic processing automation software. PATH is valued at $19.48, an increase of 53.87% yearly.
PATH’s market cap is $12.88 billion, an increase of 2.51% from $12.56 billion in 2023. It reported a revenue of $1308.1 billion with YOY revenue growth of 23.57%, 569.34% more than the sector median of 3.52%. The gross profit margin was outstanding at 85.09%, 74.76% more than the sector median of 48.69%. These metrics display PATH’s long and short-term growth prospects and immense profitability, making it an ideal buyer stock.
The worldwide software market is valued at $698.80 billion as of 2024 and is projected to grow at a CAGR of 5.27% from 2024 to 2028. This means the market is projected to be valued at $858.10 billion by 2028, with critical prospects for this growth involving digitization, urbanization and advancements in machine learning.
PATH announced a new family of LLM’s at the AI summit on March 19, 2024. These devices aid in generative AI and allow enterprises to channel their full capabilities. This assortment of LLMs will enable customers to mix and match based on business needs and is considered a significant innovation in the field. Its announcement at the AI summit means the company has confidence in and refined the product, meaning product quality is expected. Due to these factors, UiPath is a “buy” stock, and investors should get in early as its low price won’t last much longer.
Palantir Technologies (PLTR)
Palantir (NYSE:PLTR) is a data analytics company that creates software based on data integration. The stock is priced at $23.52 and has experienced a 214.84% growth over the past year.
The company’s financials indicate robust growth, with constant positive YOY quarterly revenue growth in 2023. Additionally, its EBIT went from negative to positive from 2022 to 2023. However, these metrics do not compare to Palantir’s FCF growth. From 2023 Q3 to Q4, the FCF more than doubled from $131.88 million to $296.31 million.
Palantir constantly announces partnerships and innovations, most recently its partnership with Oracle (NYSE:ORCL). Last month, Palantir and Oracle announced they would work together to improve businesses and governments with AI and cloud-based solutions. Oracle’s immense footprint will enlarge the Palantir customer base and allow the company to achieve maximum security. Overall, this partnership will enhance systems and enlarge Palantir’s customer base.
Palantir has solid financials and has a recent partnership with Oracle, making it a “buy.”
On the date of publication, Michael Que 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.
The researchers contributing to this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.