Budget-friendly stocks are increasingly hard to find as top-performing mega-caps edge ever closer to overvaluation. And, as we’ve seen with Nvidia (NASDAQ:NVDA) over the past week, even moderate underperformance can be devastating when so much of the wider market hinges on their performance.
But a handful of budget-friendly stocks are floating in the ether, even if we must reevaluate how we define those budget-friendly stocks. In some cases, they’re purely undervalued — even if per-share pricing seems high. In other cases, they’re cheap enough to fall within penny stock territory without all the baggage associated with penny stocks. Of course, the sweet spot for budget-friendly stocks is right in the middle: priced low enough that buying a handful of shares won’t break the bank while also offering some material undervaluation, whether based on current fundamentals or projected future performance.
Nintendo (NTDOY)
Nintendo (OTCMKTS:NTDOY) is perennially on my list of budget-friendly stocks for a handful of reasons. Primarily, the Japanese company does business better — in my mind — than most public American companies. Specifically, while most U.S.-based public companies fight quarter-to-quarter, Nintendo always keeps the long game in mind rather than squeezing every cent of profit from customers on a short-term basis that ultimately proves devastating long-term. Perhaps that’s why Nintendo has been around since 1889 and continues thriving!
For proof of the company’s commitment to long-term excellence, look at its balance sheet — Nintendo consistently keeps ton of cash on hand with zero debt, providing it a sizable war chest to weather economic uncertainty and take advantage of new opportunities. In fact, a massive cash balance is one of the reasons Microsoft (NASDAQ:MSFT) execs saw Nintendo as ripe for acquisition in 2020. While the buyout didn’t pan out, Microsoft clearly saw Nintendo as one of the best budget-friendly stocks in the market. Little has changed since then, inroads into greater intellectual property utilization that could be yet another cash cow for the budget-friendly gaming stock.
PSQ Holdings (PSQH)
On the much more speculative side of the equation, PSQ Holdings (NYSE:PSQH) trades in penny stock territory at around $3.75 per share and a market cap of just $110 million. But the former SPAC’s small size shouldn’t dissuade you — PSQ Holdings is at the forefront of emerging eCommerce trends, which I think will be huge over the next few years.
PSQ Holdings’ primary property is the digital PublicSquare marketplace, which affirms a commitment to “help consumers ‘shop their values’ and put purpose behind their purchases.” For now, don’t let the company’s conservative leanings factor into the equation, no matter which side of the political spectrum you fall on. Instead, look to what PSQ’s ethos represents and how that could transform eCommerce.
Social media’s increased atomization of our online experience means we’re often trapped in a similarly-minded networked ecosystem — if you want to be charitable — and an echo chamber if not. It only makes sense that many would prefer to shop the same way: by picking an eCommerce market that aligns with their values, no matter what they are, and that they can feel good supporting. Factor in the fact that Amazon’s (NASDAQ:AMZN) offerings are of increasingly poor overseas quality, and many find PublicSquare’s emphasis on American-made goods even more appealing.
Ultimately, I think PSQ Holdings stands out among budget-friendly stocks for what it represents as much as its cheap per-share pricing. Considering it’s a relative newcomer to stock exchanges, I see lots of upside in the company’s future.
Tesla (TSLA)
Like PSQ Holdings, I see Tesla (NASDAQ:TSLA) as one of our budget-friendly stocks because of its long-term potential rather than its current pricing or valuation. First, of course, is the “key man” issue negation as Musk’s pay package panned out. This, of course, cements his focus on Tesla and, no matter how you feel about the man, means that Tesla will benefit from increased personal emphasis on its performance.
That’s already evident just weeks after the decision as we’re seeing Musk shift his AI emphasis back toward Tesla. Tesla’s Texas gigafactory is building a massive GPU warehouse to position more than 50,000 Nvidia GPUs in a bid to realign AI development under the Tesla umbrella. This comes on the heels of Tesla’s announced $3 – $4 billion AI hardware expenditure, showing that Musk and Tesla are serious about asserting their position as AI leaders. Improved AI will go a long way toward addressing Tesla’s “March of 9s,” which, in turn, is effectively the last remaining hurdle toward full self-driving car capability.
Rumble (RUM)
Rumble (NASDAQ:RUM) saw a surge in viewership last week, drawing a diverse audience for the Presidential Debate. The platform’s ability to attract viewers interested in both the debate and their favorite pundits’ opinions sets it apart from alternatives like YouTube. Likewise, its unique user base and content moderation outlook make Rumble a standout among budget-friendly stocks for similar reasons to PSQ Holdings: it captures increased atomization of the Internet. It capitalizes on the trend of scaling the “1,000 True Fans” marketing theory that’s increasingly taking hold among forward-looking companies.
While Rumble is not yet a major competitor to YouTube, its growth trajectory is promising. Despite a slight dip in first-quarter monthly active users compared to 2023 highs, Rumble maintains a steady global MAU count above 50 million.
In its latest quarterly report, Rumble posted a $0.14 loss per share per share, outperforming analyst expectations of a $0.22. Additionally, Rumble has boldly filed an antitrust lawsuit against Google (NASDAQ:GOOG, NASDAQ:GOOGL). The lawsuit accuses Google of unfair online advertising practices that favor YouTube over competitors like Rumble. Although the lawsuit’s uncertain outcome makes it a risky move, it also positions Rumble as a formidable underdog among budget-friendly stocks.
Stem (STEM)
Stem (NYSE:STEM) trades roughly within penny stock territory with per-share pricing at $1.10 and a $171 million market cap. But the company’s unique emphasis on both AI and sustainable energy supports a long-term growth trajectory, positioning it among today’s budget-friendly stocks.
Stem’s Athena software optimizes the interaction between generators, grid power, renewable energy sources like solar farms, and battery storage. Using an AI framework, Athena autonomously adjusts energy distribution based on weather conditions and energy pricing, making it invaluable for large-scale enterprise clients managing sustainable energy resources.
Despite its penny stock status, Stem has ambitious growth plans. The company’s strategic vision, detailed in its AI & the Future of Energy white paper, explains how AI integration will drive efficiency and advancement across the sustainable energy market.
While Stem faces challenges typical of speculative renewable energy stocks, such as profitability issues and cyclical sales, it has moved beyond its startup phase with a growing portfolio of successful projects. Investing in Stem offers a long-term opportunity among budget-friendly stocks in the sustainable energy sector, capitalizing on the increasing role of AI in green technologies and infrastructure.
Fresh Del Monte Produce (FDP)
Fresh Del Monte Produce (NYSE:FDP) is a unique budget-friendly stock that’s firmly within the defensive side of stock selection and provides a value-based anchor to a budget-friendly portfolio. Although sales dipped slightly in the latest quarterly report, the seasonal nature of fresh fruit and produce suggests a likely rebound in summer, making the stock an attractive buy at its current price.
Fresh Del Monte is strategically optimizing its operations to navigate economic and consumer pressures better. Financially, the company reduced total debt by 15%, saving costs in today’s high-interest-rate environment. Additionally, a renewed focus on fresh and value-added sales resulted in a 5% revenue increase in this segment, with avocado sales soaring by 23% despite overall lower sales. This strategic pivot has proven successful, and management is expected to continue pursuing this direction.
Fresh Del Monte offers a solid 5.25% dividend yield, allowing investors to build a budget-friendly position through dollar-cost averaging and capitalize on the company’s growing potential.
Great Lakes Dredge & Dock (GLDD)
Great Lakes Dredge & Dock (NASDAQ:GLDD) is overlooked compared to many budget-friendly stocks but uniquely operates within a small niche sector that goes mostly overlooked itself — waterway management, a key piece of the global supply chain puzzle. The company specializes in deepening, dredging, and expanding waterways along coasts and ports, which makes it relatively recession-proof, and its efforts in coastal beach reclamation align with climate change management initiatives.
Recent financial performance underscores the company’s resilience in a sector that faced prolonged challenges during the pandemic. Great Lakes reported an EBITDA of $43 million, the highest since late 2021, indicating solid tailwinds ahead.
Looking ahead, Great Lakes is ready to capitalize on a record $8.7 billion budget from the U.S. Army Corps of Engineers, fostering a strong bidding environment for securing steady contract cash flows. With a dredging backlog of $879 million, the company has a clear projection of future income, further stabilizing its financial outlook as supply chains normalize.
On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.