September hasn’t been a good month for U.S. stock markets. So far, markets have been trading largely sideways. Here are the three hot cheap stocks that you should be watching in September.
There isn't a set definition of cheap and hot stocks. For our analysis, we’ll look at names that are popular on social media groups and trade below the $15 price level. Also, these stocks have strong long-term growth prospects.
Hot cheap stocks you should be watching in September
"Wake Me Up When September Ends,” which was ironically sung by a band named “Green Day,” is typically used to describe the month. However, with Reddit groups finding new short squeeze targets, not many would like to “sleep” in the month. Here are the three hot cheap stocks that you should be watching in September.
- Clover Health
- Ford Motors
All of these names have been featured prominently on Reddit group WallStreetBets in the past. Clover Health (CLOV) is still among the leading discussion topics among WallStreetBets members, while Globalstar (GSAT) is also among the top 20 discussion topics.
While Ford (F) isn't as “hot” as the other two right now, it has been a hot stock in the sense that it's outperforming pure-play EV (electric vehicle) stocks by a wide margin in 2021.
Clover Health is a hot stock to watch in September.
Clover Health, which went public in January by merging with a SPAC backed by Chamath Palihapitiya, has had a turbulent ride. It lowered its 2021 projections, which irked many analysts. Bank and America and JPMorgan Chase downgraded the stock. It also faced accusations from famous short-seller Hindenburg Research.
Meanwhile, Reddit traders have had a flair for CLOV stock. It went as high as $28.85 on a Reddit-driven short squeeze. The stock has been in the news lately on speculations of another short squeeze.
While the stock could be turbulent in the short term, its long-term outlook looks bullish considering the expected growth in Medicare Advantage spending. The stock has an enterprise value of $3.42 billion. Based on the forecasted revenues of $1.72 for 2023, we get a 2023 enterprise value-to-sales multiple of around 2x, which looks attractive.
Globalstar stock is looking hot on Apple deal rumors.
Globalstar stock has surged in 2021. The recent rise has been led by rumors that Apple will partner with the company to bring satellite connectivity to its upcoming Apple iPhone. While the deal still hasn't been announced officially, the outlook for satellite connectivity companies like GSAT looks positive.
The stock looks hot in September. The valuations seem reasonable considering the positive outlook for satellite connectivity. If you're a stock market investor with a flair for hot penny stocks, GSAT stock should certainly be on your radar ahead of Apple’s event next week.
Ford might not be as hot, but it’s a cheap stock.
Over the last few years, legacy automakers like Ford have been out of favor. However, their “hot” coefficient has increased over the last year. Markets finally acknowledged that they're pretty much in the race when it comes to EVs. Ford is among the top 50 gainers in the S&P 500 this year.
The stock still trades near the $13 price level and has a market cap of just above $51 billion. The market cap is below NIO, which produces only a fraction of cars that Ford produces. Ford stock looks very cheap considering its NTM PE ratio of 7.9x. The valuations are way below pure-play EV companies.
It won’t be prudent to compare Ford’s valuation multiples with NIO or for that matter any other pure-play EV company. However, legacy automakers look set for a serious rerating as they start delivering their EV models. Watch out for Ford’s all-electric F-150 next year as America’s best-selling pickup model comes out in an electric avatar.