Three mid-cap superstars (between small- and large-cap companies) trading at less than $10 per share are must-buy stocks right now. Furthermore, they could deliver powerful returns, like in the past, if economic conditions improve or return to normal in 2023.
Baytex Energy (TSX:BTE) is down 7.2% year to date ($5.64 per share), but market analysts are bullish and see a return potential between 38.3% ($7.80) and 81.7% ($10.25) in one year. The energy stock is also among the TSX’s top 30 growth stocks in 2022 (rank 26).
The $3.1 billion energy company produces crude oil and natural gas liquids (NGLs), representing about 84% of its total production. Baytex operates in the Western Canadian Sedimentary Basin and Eagle Ford in the United States. Last year, cash flow from operating activities jumped 64.6% to $1.2 billion versus 2021.
Eric T. Greager, Baytex’s President and CEO, said, “2022 was an exciting year for Baytex as we delivered strong operating results, generated record free cash flow, further strengthened our balance sheet, and initiated direct shareholder returns.” The company’s free cash flow (FCF) increased 47.5% year-over-year to $621.5 million.
For 2023, management will advance the development of Baytex’s high-quality oil-weighted portfolio and commits to allocating capital efficiently to generate meaningful free cash flow. Likewise, it plans to increase direct shareholder returns to 50% of FCF.
Turning the corner
BlackBerry Limited (TSX:BB) is turning the corner in 2023. At $5.62 per share, the tech stock is up 27.4%, outperforming the broader market (+6.17%) year to date. BB was battered last year and lost nearly 63% overall. Market analysts have a high price target of $9.51 (+69.2%) in 12 months.
The $3.3 billion erstwhile smartphone maker is now a leader in cybersecurity. BlackBerry’s intelligent security solutions help businesses, government agencies, and safety-critical institutions secure the Internet of Things (IoT). Its software also powers devices and cars securely.
In Q3 fiscal 2022 (three months ended November 30, 2022), net loss improved to US$4 million (92.6%) compared to US$54 million in Q3 fiscal 2022. Executive Chairman and CEO, John Chen, said, “Our IoT business has strong momentum and delivered a record quarter for design-phase revenue.”
He expects the continued rebuilding of the cybersecurity business to gain momentum. Chen sees BlackBerry returning to annual recurring revenue (ARR) growth in the next fiscal year.
Low-cost gold producer
B2Gold (TSX:BTO) has three operating mines in Mali (Fekola), Namibia (Otjikoto), and the Philippines (Masbate). In Q4 2022, the $5.2 billion low-cost international senior gold producer reported total gold production of 367,870 ounces. Because of the new quarterly record, management also achieved its full-year 2022 total gold production guidance.
With a $64 million capital budget, management expects 2023 to be another year of extensive exploration. B2Gold plans to pursue new opportunities in prospective gold regions, although the significant focus will be those near its three operating mines.
Market analysts recommend a buy rating, and they forecast the price to appreciate by 42.7% to 75.1% in 12 months. B2Gold is also a dividend payer. At $4.85 per share (+0.83% year-to-date), the dividend yield you can partake in is 4.65% dividend.
In sum, Baytex, BlackBerry, and B2Gold are the cheapest potential multi-bagger you can purchase in March 2023.