Stocks to buy

With the turmoil in the equities sector, many investors have been tempted to ignore the upside implications behind cheap Robinhood (NASDAQ:HOOD) stocks to buy. That might be a mistake. Although broader sentiment may have dried up, the youth-centric and social media-driven trading platform still generate plenty of buzzes. Moreover, social influencers on the platform frequently offer compelling market ideas.

Specifically, the cheap Robinhood stocks to buy mentioned in this article stem from market ideas listed on Stonks.news’ top 100. Of course, I had to choose what stood out to me, with only seven ideas available to discuss. If your favorite company isn’t mentioned here, please don’t read too much into it: it’s just my executive decision and nothing more.

All the cheap Robinhood stocks to buy here also feature either a modestly undervalued or significantly undervalued profile, as determined by Gurufocus.com. In addition, I specifically avoided companies that the investment resource labeled as possible value traps. Therefore, we’re simply looking at pure numbers – nothing more, nothing less.

With that out of the way, below are surprisingly compelling cheap Robinhood stocks to buy.

KO Coca-Cola $55.03
WMT Walmart $131.68
AAPL Apple $145.43
META Meta Platforms $139.07
NFLX Netflix $240.02
PFE Pfizer $43.09
BABA Alibaba $84.32

Coca-Cola (KO)

Source: monticello / Shutterstock

Peruse the internet, and you’ll quickly discover that the concept of cheap Robinhood stocks doesn’t have a great reputation. I must say it’s not entirely undeserved. Last year, the New York Times (NYSE:NYT) mentioned that the platform tends to lure young traders, sometimes to their detriment. To be fair, Robinhood’s top 100 list also highlights easily credible names. This includes soft drink giant Coca-Cola (NYSE:KO).

According to Gurufocus.com, Coca-Cola features a modestly undervalued business. On the balance sheet, the company features decent stability. Arguably, its best attribute here is the Altman Z-Score of 4.06, meaning that it’s safe from bankruptcy risk. On the top line, Coca-Cola features a three-year free cash flow (or FCF) growth rate of 22.4%. In comparison, the industry rate sits at 5.9%.

However, Coca-Cola shines in the profitability angle. For instance, the company features a net margin of 23.2%, well above the industry median of 6.4%. As well its return on equity stands at a blistering 41.5%. That’s better than 97% of its peers. Combined, these core stats make KO one of the cheap Robinhood stocks to buy.

Walmart (WMT)

Source: fotomak / Shutterstock.com

Another solid name (relative to historical standards) among cheap Robinhood stocks to buy is big-box retailer Walmart (NYSE:WMT). Known for its everyday low pricing, should the economy fall into recession – a risk that shouldn’t be ignored – Walmart could benefit from core consumer relevancies. However, this year hasn’t been too kind for WMT, leading to an 8% year-to-date loss.

Nevertheless, an 8% loss practically represents a win when the benchmark equities index slipped 21% in the same frame. Moreover, Gurufocus.com labels WMT as modestly undervalued. As with Coca-Cola, Walmart brings a relatively balanced financial picture to the table. On the balance sheet, WMT’s Altman Z-Score stands at 4.4, a “safe” rating against bankruptcy risk. In addition, the retailer features a three-year revenue growth rate of 5.3%, better than 59% of its peers.

Similarly, Walmart’s strengths lie in its profitability metrics. The company commands an operating margin of 4%, which may not sound like much. However, it exceeds 64% of corporations listed in the retail defensive industry. Further, Walmart’s return on equity of 17.3% outshines nearly 74% of the competition. It’s easily one of the cheap Robinhood stocks to buy.

Apple (AAPL)

Source: Moab Republic / Shutterstock

An obvious idea that always gets talked up by analysts, I generally prefer to avoid discussions about Apple (NASDAQ:AAPL). Frankly, there’s not much I can add to the conversation that hasn’t been added several times over by Apple aficionados. However, what may not get as much coverage is that AAPL represents one of the cheap Robinhood stocks to buy.

Sure, the consumer technology giant slipped almost 20% since the start of this year. From that perspective, you can call AAPL one of the cheap Robinhood stocks. But financially, the underlying company offers a desirable profile. Gurufocus.com labels Apple’s business as modestly undervalued. For starters, the company features a decent balance sheet, with a debt-to-EBITDA ratio of 0.91. In comparison, the industry’s median metric is 1.8.

However, the actual highlight centers on growth and profitability. Apple’s three-year revenue growth rate stands at 17.8%, well above the industry median’s 2.9%. On the bottom line, the tech giant enjoys a stacked profile. One highlight (among several) is an operating margin of 30.5%, better than nearly 98% of the competition.

Meta Platforms (META)

Source: Aleem Zahid Khan / Shutterstock.com

Once one of the kings of tech, Meta Platforms (NASDAQ:META) woke up this year to a startling new reality. Although you wouldn’t think owning the Facebook social network wouldn’t be a bad gig, Meta struggled against macro headwinds. Specifically, management warned about a slowdown in the digital advertising space.

It’s also not the first time the company brought up this issue. Given that this dynamic appears to be trending, many investors naturally panicked. META stock fell 59% YTD. Over the trailing month, it’s down more than 12%.

Nevertheless, an argument exists for META to be classified as one of the cheap Robinhood stocks to buy. Gurufocus.com labels the tech platform as significantly undervalued. Despite its heavy wounds, the company maintains a firm fiscal position. The balance sheet is robust, featuring an equity-to-asset ratio of 0.74. This metric ranks better than 66% of the competition.

Moreover, Meta features a three-year revenue growth rate of 29.2%, exceeding 79% of its peers. For the bottom line, one highlight is its net margin of 28.2%. In comparison, the industry median sits at 0.84%.

Netflix (NFLX)

Source: xalien / Shutterstock

Another heavily celebrated company, Netflix (NASDAQ:NFLX), now finds itself struggling for traction. Since the start of this year, NFLX has given up more than 60% of its market value. Some of the macro headwinds may center on shifting consumer behaviors. During the onset of the coronavirus pandemic, Netflix essentially enjoyed a hostage audience.

Now that people desire real experiences – cue a backlink to an InvestorPlace reference to revenge travel – many decided to throw in the towel for Netflix. While cutting losses might make sense in the near term, NFLX may present a discounted opportunity over the long run.

According to Gurufocus.com, NFLX represents a significantly undervalued business. Despite the streaming giant’s troubles, Netflix maintains solid strengths in the balance sheet. Notably, its debt-to-EBITDA pings as 0.71. In comparison, the industry median stands at an unfavorably lofty 1.75.

Further, the company still owns an excellent three-year revenue growth rate of 23.1%. That’s easily better than 88% of the competition. Finally, Netflix’s net margin stands at 16.4%. In contrast, the industry median sits well below 2.74%.

Pfizer (PFE)

Source: Manuel Esteban / Shutterstock.com

Like many of the other cheap Robinhood stocks to buy, Pfizer (NYSE:PFE) represents a here-today, gone-tomorrow narrative. Through the initial and middle phases of the Covid-19 crisis, investors fundamentally viewed Pfizer favorably. After all, its partnership worked on and eventually delivered a Covid vaccine. As well, the vaccine integrated a messenger-RNA approach, a regulatory first.

Fast forward to this moment, and the framework presents a less encouraging note. Since the beginning of this year, PFE stock has fallen 22%. However, over the trailing five days through the Oct. 5 session, PFE appears to be forming a support line. If so, this would add a technical angle to PFE being one of the cheap Robinhood stocks.

Financially, Gurufocus.com labels Pfizer’s business as significantly undervalued. Overall, the company enjoys a balanced profile. It has a stable balance sheet, with a debt-to-EBITDA of 1.04 (compared to the industry median’s 1.62). On the top line, Pfizer commands a three-year revenue growth rate of 27.8%, exceeding almost 87% of the competition.

Finally, the pharmaceutical giant’s return on equity stands at 37.3%, well above the industry median’s 3.5%.

Alibaba (BABA)

Source: Kevin Chen Photography / Shutterstock.com

I don’t think an argument to the contrary exists. At least as far as this list of cheap Robinhood stocks is concerned, Alibaba (NYSE:BABA) rates as the most controversial market idea. Frankly, I don’t want to get dragged into the geopolitics of the matter. However, it’s safe to say that observers can sense tensions with Alibaba’s native China’s strong relations with Russia.

Additionally, the Pew Research Center came out with a report indicating rapidly escalating unfavorable views of China among U.S. respondents. It may have had some effect on Alibaba. Since the start of this year, BABA has fallen 30%. That’s slightly greater than the YTD loss of the Nasdaq Composite index.

Still, if you are geopolitically agnostic, Gurufocus.com labels Alibaba’s business as significantly undervalued. On the balance sheet, plenty of positive signs exist, including a debt-to-equity ratio of 0.16. In contrast, the industry median stands at 0.63.

Regarding top-line performance, Alibaba’s three-year revenue growth rate soars at 32.1%. This ranks better than 90% of the competition. The company’s operating margin is also 10.4%, whereas the industry median is 3.5%.

On the date of publication, Josh Enomoto 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.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

Articles You May Like

What the stock market typically does after the U.S. election, according to history
Talen, Constellation and Vistra tumble after government rejects Amazon nuclear-data center agreement
The Three Catalysts Sending Stocks to the Moon
DoubleLine’s Gundlach says expect higher rates if Republicans also win the House
Caligan picks up a stake in Verona Pharma, seeing an opportunity to generate more value