If you don't want to chase all-time highs and buy stocks at extremely high valuations, the good news is that there are many decently priced options. And below, I'm going to focus on what I think are some of the best deals available.
Three stocks that trade at less than $100 per share and can be bargain buys right now include Pinterest (PINS -2.42%), United Parcel Service (UPS 1.38%), and Comcast (CMCSA 1.38%). A couple are facing concerning headwinds, but here's why they can all be great long-term investments.
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Pinterest is a popular social media site where people go for ideas related to just about anything. Whether it's home renovation projects, baking, or recent shopping hauls, there's a ton of content to sift through. The platform is particularly popular with Gen Z, which Pinterest says accounts for more than 40% of its monthly user base.
Entering this week, shares of Pinterest have been trading around $35, and that's with the stock rising 24% since the start of the year. And yet, it's still a cheap buy, trading at just 13 times its trailing earnings.
Its price/earnings-to-growth multiple, or PEG, is around 0.8. That's based on analyst expectations over the next five years, and it implies that Pinterest is one heck of a cheap growth stock.
The company's top line rose by 17% in its most recent quarter (which ended on June 30), to just under $1 billion. Monthly active users rose by 11% to 578 million. With a market cap of only $24 billion, Pinterest is a business that could get a whole lot more valuable given how popular it is with younger audiences. It can be a terrific long-term buy.
United Parcel Service
There's not much growth happening for United Parcel Service these days. The logistics company is battling significant macroeconomic headwinds due to tariffs. It's trading at less than $90, and the last time you could have bought the stock at a much cheaper price than that was in 2013.
UPS is facing some near-term challenges, but it's hard to not like the business over the long haul. The world of e-commerce is still getting bigger, and demand for global shipments isn't likely to slow down. There may be short-term adversity, but if you're a long-term investor, you don't need to worry too much about UPS given its dominance in the industry.
The company is making tough but smart decisions, such as scaling back on volume from Amazon in an effort to improve profitability. And it is profitability, not simply sales, that should drive decisions. Although it may not be a popular move and it may hurt the top line, if it improves profit margins, that could be a big win in the end.
UPS is trading at a price-to-earnings multiple (P/E) of 13, and in the long run it could have plenty of upside as economic conditions improve.
Comcast
Rounding out this list of cheap stocks is media and tech company Comcast. It's trading around $34, and its P/E is less than 6 -- an astoundingly low valuation for one of the largest entertainment companies in the country.
Its high debt load (around $100 billion) is undoubtedly turning away a lot of risk-averse investors. But with Comcast spinning off many cable TV networks later this year, that could help reduce costs and allow it to focus on higher-growth opportunities in areas such as streaming. The business may have become too bloated, and simplifying its approach could work well for investors.
Overall, Comcast still has excellent brands in its portfolio, and it's highly profitable, with an operating margin of around 20% over the past six months. I'm optimistic that by becoming leaner, the business can be better positioned for growth in the future. At such a cheap valuation, it may be too tempting to pass up since it offers an excellent margin of safety.
