After the worst year for the stock market since 2008, some businesses are suffering heavy losses while others face temporary headwinds as they turn business around.
This means you can find incredible businesses trading at bargain prices, and some are positioned to bounce back quickly for big profits.
Superinvestor Howard Marks says: “Superior investors know – and buy – when the price of something is lower than it should be.”[i]
Here are 3 stocks trading much lower than they should be today, each one could soar 200% or higher starting in 2023:
1. Roku (ROKU)
Roku (ROKU) rose to prominence as a streaming hardware maker, but this market has grown into a commodity in recent years. Amazon, Google, and Apple all make comparable streaming sticks.
Roku changed course by creating its own original content and the market reacted by punishing shares. Roku is down 55% over the past year.
As a result, management cut its workforce by 5% to curb expenses.
Roku hit a high of $473 in July 2021. At one point, it was up 1,940% from its IPO.
Today, it trades at just $62.
However, despite slowing numbers in a post-pandemic world, Americans are still abandoning cable TV. 90% of young people prefer streaming over cable and 42% of Americans are estimated to ‘cut the chord’ by 2026.[ii]
These chord cutters need somewhere to stream and they’re turning to Roku.
Its the No. 1 streaming platform in the U.S., Canada, and Mexico in terms of hours streamed.
And Roku isn’t just a hardware and media company. It licenses the use of the Roku operating system which powers a growing number of connected TVs. The company gets a 30% split of the digital advertising on its platform.
Roku is a tech stock but its also a legit value play, currently with a price-to-book of 3.54 and price-to-sales of 2.94.[iii]
It has more than twice as much cash as debt to survive what comes next.
Roku shares are cheap, has a solid core business in a growing market, and could be positioned for a major rebound in 2023.
2. Walgreens Boots Alliance (WBA)
Walgreens Boots Alliance (WBA) owns the retail pharmacy chains Walgreens and Boots, as well as several pharmaceutical manufacturing and distribution companies.
Wall Street expects Walgreen’s year-over-year revenue to fall and shares are down 23% over the past year.
But despite slowing performance, Walgreens is still one of the strongest brands in America today.
One year ago its market cap was bordering $40 billion.[iv] Today it’s at $31 billion.
Its price-to-sales is 0.24, price-to-book is 1.51, and forward price-to-earnings is a low 8.04.
It’s rare to see an iconic American brand trading for so cheap, but Walgreens has ideas for future growth too. Its rolled out a national primary care platform and acquired new services for managing care at home.
Analysts from Loop Capital just issued a new buy for WBA, saying the company's new healthcare platform will “significantly enhance the value of its stores to consumers by affording them more convenient access to healthcare services…
WBA's investment portfolio alone could be worth half or more of the company's present enterprise value.”
3. RedFin (RDFN)
Digital real estate brokerage Redfin (RDFN) is down 65% over the past year.
After the pandemic property boom, the real estate industry is now entering a correction.
But RedFin was a growing business during the good times and there’s no reason to believe it won’t return to growth when home sales stabilize.
RedFin has entered full turnaround mode. The company announced two rounds of layoffs and closed its home-flipping business, RedfinNow.
The future is looking brighter. If home buyers return to the market, RedFin is positioned to grow. If the economy falls into a recession, the Fed will likely lower interest rates, boosting RedFin’s business. It’s a win/win scenario for RedFin.
Shares currently trades at just 0.39 Price/Sales, but this probably won’t last for long.
Forever Battery: The Gas Killer
While electric vehicle (EV) sales only make up 2% of cars sold in the U.S. today…
One startup's new battery tech is set to disrupt the $2 trillion car industry.
Its light, inexpensive “Forever Battery” could soon last 1,000 miles on a single 15-minute charge…
And could make EVs more affordable for the everyday American over gas-powered cars.
A Wall Street legend believes this will set off a 1,500% increase in EV sales over the next four years.
Getting in right now could lead to life-changing profits.
For full details on this startup, click here.
[i] https://www.oaktreecapital.com/docs/default-source/memos/2007-04-26-everyone-knows.pdf
[ii] https://techjury.net/blog/cord-cutting-statistics/#gref
[iii] https://finance.yahoo.com/quote/ROKU/key-statistics/
[iv] https://finance.yahoo.com/quote/WBA/key-statistics?p=WBA
