You don’t need to invest a boatload of cash to get started investing, especially regarding the market’s lowest-cost stocks. Undoubtedly, there are plenty of stocks out there with low share prices. And though they may be growthier than the blue-chip names atop the market, remember that the share price itself does not indicate the value to be cheap.
A stock going for less than $10 per share could be markedly more expensive than a stock going for over $1,000! Of course, a lower share price makes a given stock more accessible to smaller, new retail investors. But don’t confuse share price for valuation as we look to track down the best under-$40 stocks to consider for the second half of the year and beyond.
Without further ado, let’s get into the “growthy” value plays that are currently trading at south of $40 per share.
Badger Infrastructure Solutions
Badger Infrastructure Solutions (TSX: BDGI) is a promising mid-cap stock that’s fresh off a serious 27% plunge off recent all-time highs. I think the dip is a huge buying opportunity for beginner investors seeking growth. At 22.8 times trailing price-to-earnings (P/E) ratio, you’re getting a unique business with a massive expansion runway. With insiders recently scooping up the stock on weakness, perhaps it’s time for Canadians to follow suit, even if shares appear like a falling knife. At writing, the stock goes for $36.83 per share.
The company provides mobile soil excavation services with its non-destructive hydrovac solution. It’s a safe and environmentally friendly way to dig up underground assets. The company saw impressive demand earlier this year. And though the hype has since faded, I continue to view the long-term profile as worth backing.
Should demand for its services start to take off due to rising infrastructure investment, Badger can easily scale up efficiently. All considered, BDGI stock is a great buy on the dip, but do fasten your seatbelt.
Aritzia
I’m not a huge fan of the fashion business. However, when it comes to Aritzia (TSX: ATZ), I’m willing to make an exception. The brand seems to have staying power. Additionally, the firm is starting to see growth come back online, even as inflation remains on consumers’ shoulders. That’s a good setup for when the economy really starts to take off, whether it be due to lower rates or higher employment. After the latest 10% surge in the past week, ATZ goes for $41.27 per share.
With new fashions, strong exclusive brands (TNA, Sunday Best, and Wilfred), margin upside, and a sound balance sheet to ride out the waves, ATZ stock looks like a steal right now at 23.4 times forward P/E. Like Badger, be ready for a rough ride in the stock, as shares are far choppier than your average stock with the 1.8 beta.
With things starting to look up for the upscale fashion retailer again, I’d look for the firm to really double down on hot new styles while bolstering its in-store and online experiences. Once consumers are ready to loosen the purse strings, Aritzia will be ready. Until then, shares stand out as a top growth play in the mid-cap scene.
