After dropping to 52-week lows, the markets have been rallying lately. That has traders and investors scrambling for cheap stocks under $20 to buy.
This bullish sentiment comes amidst a backdrop of sticky inflation and interest rates that are likely to remain elevated for some time. And another factor is the geopolitical events which include real concerns about an escalation of war in the Middle East.
For all those reasons, it may not be time to call an all-clear on the market. Nevertheless, with rates on the 10-year Treasury bonds dipping to around 4.6%, risk-on sentiment is returning to the market. Fortunately, there are options for different investors.
Cheap stocks under $20 exist in large cap, mid-cap, and small-cap stocks. Let’s delve into these stocks that have tailwinds to drive them higher as well as bullish sentiment from analysts.
Palantir (PLTR)
Denver-based Palantir (NYSE:PLTR) is a stock that some investors love, and others love to hate. Nevertheless, when it comes to artificial intelligence (AI), the company has many high-profile supporters. This list includes Wedbush analyst Dan Ives who refers to Palantir as the Lionel Messi of AI.
Palantir stock made a sharp move when the company posted its first profitable quarter. It’s since stacked several profitable quarters together and may be included to the S&P 500 sometime in 2024.
Also, the company has been accumulating contracts on both the government and commercial sides. Investors are giving significant attention to the 500-million euro contract to create a patient data platform for the National Health Service (NHS). Although the official announcement hasn’t been made, it appears imminent.
PLTR stock is trading near $19 a share as of November 10, 2023. Ives gives the stock a $25 price target, which is the highest target of all the analysts. Nevertheless, if you’re looking for a stock under $20 now but likely to go higher, Palantir is a solid choice.
Mattel (MAT)
Mattel (NYSE:MAT) is a mid-cap pick for cheap stocks under $20. The stock charged 30% upon the release of the Barbie movie in the summer.
However, the stock gapped down sharply as part of the broad market sell-off and even a solid earnings report. That included raising its full-year outlook, but hasn’t been enough to rejuvenate MAT stock.
However, as the multi-year superhero movie craze shows, movie studios often operate on the “if it’s not broke don’t fix it” model. The success of Barbie has studios set to release up to 45 toy-related movies in coming years. While it’s unrealistic to expect that all of these films will be as successful as the Barbie movie, it is likely to give Mattel a long runway for growth.
MAT stock is trading near the middle of its 52-week range. Analysts give the stock a consensus Buy rating with a price target that gives the stock a 33% upside from current levels.
Dyne Therapeutics (DYN)
Dyne Therapeutics (NASDAQ:DYN) is a small-cap stock to consider for under $20. The biotechnology company is focused on developing therapeutic treatments for generically-driven muscle diseases.
Because it’s a clinical-stage biotech company, it doesn’t yet have a commercially available product. Consequently, it’s a pre-revenue company.
Taking a long position in such a company means focusing on its pipeline. Dyne’s lead candidate DYNE-101 targets the multi-system disorder Myotonic Dystrophy Type 1, which affects approximately 114,000 patients in the U.S. and Europe.
In September 2023, the U.S. Food & Drug Administration (FDA) granted Dyne’s DYNE-101 treatment an orphan drug designation. Hence, this will allow the company to receive certain incentives, such as tax credits and exemptions from some FDA fees for clinical trials. One of the more significant benefits is the potential for seven years of market exclusivity once a drug is approved.
DYN stock initially fell despite receiving the orphan drug designation. This was likely a case of investors souring on small-cap stocks. But in the month ending November 10, 2023, the stock is up 11.4% and pushing above its 10-, 20-, and 50-day moving averages. Analysts are forecasting the stock to have a 212% upside. DYM stock is an opportunity for risk-tolerant investors.
On the date of publication, Chris Markoch had a LONG position in PLTR. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
