5 Bargain-Basement Stocks to Buy Right Now

No one likes it when markets are down. But the good news is these times represent great times to put your money to work. That’s because many solid companies with long-term track records trade at a discount.

They may have felt the pressures of higher inflation. Or investors might have just fled the particular stock or industry. But, down the road, these companies have what it takes to grow — from an earnings and share performance perspective.

And that means, if you buy them now, you’re likely to win big over the long haul. Let’s check out five bargain-basement buys to get in on today.

1. Amazon

Rising inflation has weighed heavily on Amazon (AMZN 1.75%).

That’s because the e-commerce giant gets hit in two ways. It faces higher costs — and its customers have less to spend. But these troubles are temporary, and Amazon has the strength to make it through and win over time.

Amazon is improving its cost structure, which includes cutting jobs and spending in certain areas. At the same time, Amazon last year increased its investment in the high-growth area of technology infrastructure. That supports its cloud computing services business, Amazon Web Services (AWS).

This is key because AWS has driven Amazon’s profit in recent years. Why can Amazon shine over time? The company is a leader in two markets growing in the double digits: e-commerce and cloud computing.

So, it should be among the first to benefit from this growth. Today, Amazon shares trade around their lowest in relation to sales since 2015. This is a steal considering Amazon’s long track record of revenue growth and its work today to prepare itself for the future.

2.

Tesla

Tesla (TSLA 0.72%) reported record results in the fourth quarter — from revenue to operating income to net income. The electric vehicle (EV) giant also said generally accepted accounting principles (GAAP) net income doubled to more than £12 billion for the full year. The company achieved this even while facing headwinds like supply chain issues and negative currency impact.

So, there’s reason to be confident about Tesla in an improving economy. The EV giant credits its cost control and cost innovation for its success during tough times. Though Tesla’s average selling price for its vehicles is on the decline, the company’s margins are strengthening.

This should be a winning combination over time. Lower prices will attract EV buyers. And higher margins mean Tesla’s earnings continue to benefit.

Tesla’s EV deliveries and production figures have climbed in the double digits. And, over time, Tesla aims for average annual delivery increases of 50%. Today, Tesla shares trade for 48 times forward earnings estimates — looking very cheap compared to last year’s level of more than 80.

3.

Disney

Disney (DIS 1.27%) disappointed investors last year as operating losses at its streaming services deepened. The company had grown membership, but at a cost. As a result, Disney shares slid 43%.

But the entertainment giant surely is heading for better times. It called back longtime chief executive officer Bob Iger to pave the path to growth. Iger returned from retirement in late November and has announced several moves so far.

These include spending cuts to reach cost savings of £5.5 billion. At the same time, Disney’s parks, experiences, and products business — traditionally the biggest revenue driver — continues to grow. The unit reported double-digit gains in revenue and operating income in the most recent quarter.

Iger’s plan includes moves that could boost this unit’s revenue, too. For example, Disney is launching efforts to improve the guest experience, like making more lower-priced tickets available. So Disney is on the way to getting its magic back.

And that’s why it looks like a buy today at 23 times forward earnings estimates — compared to more than 35 last year.

4. Intuitive Surgical

Intuitive Surgical (ISRG 0.21%) is the world’s biggest robotic surgery company — and by far. The company holds nearly 80% of the market.

And what’s great is Intuitive isn’t likely to give up much market share any time soon. Here’s why. Surgical robots are million-dollar investments, so hospitals don’t switch in and out of them regularly.

If a hospital is satisfied with a robot, it probably will stick with it. Also, most surgeons are trained on Intuitive’s flagship da Vinci platform, which is another reason hospitals may favor Intuitive products. All of this has helped Intuitive grow earnings over time.

Of course, there have been headwinds like coronavirus disruptions and higher raw materials prices. But these are temporary challenges. Meanwhile, Intuitive has shown confidence in its own business by buying back shares.

In fact, the company repurchased £1 billion of common stock in the most recent quarter. Today, Intuitive is trading for 47 times forward earnings estimates, down from more than 60 a year ago. Considering Intuitive’s moat and growth track record, we’re looking at a very reasonable entry point today.

5.

CRISPR Therapeutics

CRISPR Therapeutics (CRSP -2.26%) is heading for a big moment: the potential approval of its first product. CRISPR and partner Vertex Pharmaceuticals have submitted blood disorder candidate exa-cel to regulators in the U.S., Europe, and the U.K.  Exa-cel is designed as a one-time curative treatment — for disorders that today have limited treatment options.

So, if approved, it could be big. The companies developed exa-cel using CRISPR’s gene-editing technology. This technology — which helps fix faulty genes involved in disease — is set to bring CRISPR more and more revenue now and down the road.

Vertex just signed a licensing agreement for the use of it in Vertex’s type 1 diabetes program. Vertex will pay CRISPR £100 million up front. Then, CRISPR may earn as much as £230 million in milestone payments — and could also pocket potential product royalties.

CRISPR has other candidates in the pipeline, including an immuno-oncology one that could be next to the finish line. It’s in a phase 2 trial that may support a regulatory request. Today, CRISPR shares are trading at around their lowest in three years — a steal considering potential growth just ahead.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Adria Cimino has positions in couponmatrix.uk, Tesla, and Vertex Pharmaceuticals. The Motley Fool has positions in and recommends couponmatrix.uk, CRISPR Therapeutics, Intuitive Surgical, Tesla, Vertex Pharmaceuticals, and Walt Disney. The Motley Fool recommends the following options: long January 2024 £145 calls on Walt Disney and short January 2024 £155 calls on Walt Disney.

The Motley Fool has a disclosure policy.

Tags:

airbnb listed on couponmatrix.ukbanham-zoo listed on couponmatrix.ukgreggs listed on couponmatrix.ukhawes-and-curtis listed on couponmatrix.uknoom listed on couponmatrix.uknotino listed on couponmatrix.uk
airbnb listed on couponmatrix.ukEver wanted to stay in an authentic castle, luxury tree-house, or tipi under the stars? With Airbnb, all your accommodation dreams can come true. With millions of properties all over the world, you can enjoy remarkable experiences on your doorstep as well as across the globe. For a super saving, add an Airbnb discount code to your next booking and rest easy knowing you’ve bagged the best deal possible. From Paris to Peru, find your piece of paradise with Airbnb today.
banham-zoo listed on couponmatrix.ukThere are a myriad of fun and furry faces waiting to greet you at Banham Zoo, the charity-led attraction that makes for an ideal day out on the east coast. Complete with big cats, mammals, butterflies, snakes, birds and many more besides, a Banham Zoo ticket is all you need to gain access to a world of natural wonders. Whether you want to see something new, get up close with exotic creatures and learn something about your favourite resident, Banham Zoo has all you need to satisfy your curiosity.
greggs listed on couponmatrix.ukFrom tasty bakes and freshly-prepared sandwiches to temping doughnuts and healthy salads, Greggs has every breakfast, brunch and lunch under wraps. Whether you’re stopping by for a quick coffee or staying in for a light bite, be sure to add a Greggs promo code to your order and make your day a whole lot tastier for less. Baking delights for 75 years, Greggs’ tried-and-tested recipes are sure to please every palette.
hawes-and-curtis listed on couponmatrix.ukSince its inception, the Hawes and Curtis heritage brand has been adored by the British aristocracy and Hollywood elite. With notable customers including the Duke of Windsor, Cary Grant and Frank Sinatra, you’ll be keeping good company while shopping affordably for menswear with a Hawes and Curtis discount code. Bringing true British style and class to everyone, Hawes and Curtis also offer a generous women's wear section too.
noom listed on couponmatrix.ukNoom is a leading behavioural-based app that aims to address issues such as dieting and anxiety at its source – you. By gradually helping you implement daily changes to your routine, with the assistance of nutritious recipes and an active community, Noom helps you realise a better you without pushing you beyond your limits. Make the most of a Noom discount code and see how much you can slim with a reduced personalised plan that’s tailored to you and to you alone.
notino listed on couponmatrix.ukReady for a beauty update? Notino is your go to for the best big name brands in fragrance, hair care and cosmetics. You’ll find bestselling products from the likes of Shiseido, Chanel and MAC at great prices! Make the most of a Notino discount code to save even more on your next cosmetics shop - with prices like these, you can afford to treat yourself to some little luxuries!