It can be hard to find stocks that are both cheap and worthy of an investors’ attention. If a stock is too cheap, it can make you think maybe it isn’t worth your time at all. Too high, and you’ll be left wondering whether you should wait for a drop.
The $10 mark is a sweet spot, offering enough confidence to put your money down, with a low enough price to make you want to buy a bunch of shares.
Here are three stocks that are worthy of such attention.
Crescent Point Energy Corp. (TSX:CPG)(NYSE:CPG)
Now at first, this stock might fall more into the “not worth your time” category. After all, it’s trading at lows not seen since its initial public offering around $5 per share at the time of writing.
But this energy company has several assets with low-cost resources on hand that, while they don’t produce a crazy amount of oil, do produce enough to break-even at $45 per barrel of oil equivalent West Texas Intermediate. The company is also moving toward optimization techniques and waterflood technology to further its free cash flows.
It’s using that free cash for a number of acquisitions without deteriorating its balance sheet. And right now it’s in the process of building it up. With this low-price market, the company boosted its oil reserves by 10%, cut its debt, and cut its dividend as protection in 2018.
This year, the company anticipates generating $600 million in cash flow to put even more toward its debt, which should be fairly easy once oil rebounds. When that happens, its stock should shoot up to even $12.50 in the next 12 months.
Rogers Sugar Inc. (TSX:RSI)
While this stock has had its share of slight ups and downs, overall it has managed a relatively steady streak of increases in its share price of the past 16 years. The company has remained a simple investment, with long-term investors reaping the rewards of both increased profits and sweet dividends.
While that dividend hasn’t changed, at 5.97% as of writing, the company is starting to. In 2017 it purchased a number of maple sugar companies to become a larger-scale business that would increase its cash flow to support its dividend for years to come.
It’s managed that and then some. The company generated $47.8 million in free cash flow in 2018, which was $10 million more than was needed for the dividend.
Transat A.T. Inc. (TSX:TRZ)
It might be on the higher end of these three options, but it’s nothing compared to what Air Transat used to trade for. At around $8 per share, this company is far from its glory days in the $20 range. But that could be about to change. Analysts are predicting shares to reach $12 per share in the next 12 months, so what’s fuelling the takeoff?
The most recent jump is from news that the company is considering a sale of the business with “more than one party.” This shot the price soaring by 56% after poor results from the third-tier Canadian airliner, which should be music to the ears of long-term buyers.
In the meantime, the company has been cutting costs to combat rising jet fuel prices, and expanding into the hotel market to create a stable income stream.
When you buy heavily cyclical stocks at low prices… and then hold the shares until the cycle reaches its peak… you can make a very healthy profit.
Every investor knows that. But many struggle to identify the best opportunities.
Except The Motley Fool may have a plan to solve that problem! Our in-house analyst team has poured thousands of hours into their proprietary research – and this is the result.
Our top advisor Iain Butler has just identified his #1 stock to buy in 2019 (and beyond).
Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned.