Despite the stock market being at an all-time high, plenty of bargains remain to be found for investors. The bull rally that began in autumn 2022 is only now starting to broaden out to include utilities, retailers, industrial stocks and other sectors of the economy. It’s no longer just big tech stocks that are marching higher. So, many stocks are starting to rise.
So, this presents an opportunity for investors to buy stocks as they bottom and begin to climb higher. Many well-known companies have stocks that still look cheap in terms of valuation and share price. Catalysts such as strong earnings are starting to move share prices higher. For other stocks, a post-earnings dip is presenting a buying opportunity. However you look at it, bargains abound in the current market.
Let’s explore three cheap stocks that could be worth a fortune by summer.
Canada Goose Holdings (GOOS)
After being in the doldrums for the last five years, things are starting to look up for Canada Goose Holdings (NYSE:GOOS). The share price jumped 25% higher after the maker of winter parkas beat analyst expectations for its latest financial results. Investors needn’t worry that they’ve missed the move in GOOS stock. Even with the big post-earnings bounce, Canada Goose’s share price is still down 72% over the last five years.
Furthermore, GOOS stock still has plenty of room to run, and the move higher may have just begun. After struggling with declining sales coming out of the pandemic, the company finally reported a turnaround. EPS came in at 19 cents compared to 7 cents that was forecast among analysts. Revenue in what was the company’s fiscal Q4 totaled $358 million, beating expectations of $315.5 million.
Key to the turnaround were sales in Asia-Pacific, including China, which rose 29.6% during the quarter. In North America, sales rose 24.5% year-over-year (YOY) after a 14% decline in the previous quarter. The latest financial results come after Canada Goose announced in March plans to cut 17% of its global workforce as it seeks to realign its business.
Chubb Ltd. (CB)
News that Chubb Ltd. (NYSE:CB) was the mystery stock that Warren Buffett had been concealing has lit a fuse under the Swiss insurer’s share price. Buffett has built an astounding $6.7 billion stake in Chubb Ltd., which has sent its stock up nearly 10% in only a few days, hitting a 52-week high in the process. Buffett’s purchase of nearly 26 million shares of the Zurich-based property and casualty insurer is seen as the ultimate vote of confidence in the stock.
In fact, CB stock has been a strong performer, having gained 37% over the last 12 months, including a 20% gain this year. However, the valuation still looks attractive, with the shares trading at only 12 times future earnings estimates. And, its quarterly dividend payment of 86 cents per share gives the stock a strong yield of 1.25%. Given the share price appreciation, low price-earnings ratio and decent dividend, it’s easy to understand Buffett’s fondness for CB stock.
Now that Buffett has built a stake in Chubb, the share price is likely to continue rising, making it a cheap stock to buy.
Airbnb (ABNB)
Anyone looking to buy a post-earnings dip should consider Airbnb (NASDAQ:ABNB). Shares of the short-term rental company dropped nearly 10% on forward guidance that was below Wall Street estimates, presenting a buy-the-dip opportunity. The guidance obscured what was a solid print from Airbnb.
For the first quarter, the company posted EPS of 41 cents, which was well ahead of a consensus estimate of 24 cents. The quarterly profit was up 126% from a year ago and the company’s best first quarter ever.
Revenue totaled $2.14 billion, ahead of Wall Street forecasts of $2.06 billion. Sales were up 18% from a year earlier. Gross bookings came in at $22.90 billion, up 12% YOY, while nights and experiences booked rose 9.5% to $132.6 million. Despite the strong quarter, Airbnb’s guidance fell short of expectations, sending the stock lower.
Investors should pick-up the stock on the cheap. Year-to-date (YTD), ABNB stock is up only 8%. However, the share price is 15% below its 52-week high and trading at only 19 times future earnings estimates. In time, the stock should rise, especially with the busy summer travel season upon us.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.