3 Cheap Stocks To Buy After The Market's Strong November

The market fell on the last day of November. But that didn’t stop it from posting an impressive month of gains. In fact, the Dow climbed 12%, for its best month since 1987 and the S&P 500 jumped 11%. The climb, of course, followed positive vaccine news from multiple firms, alongside continued signs of recovery for the U.S. economy, and more.

Investors should also know that November’s rally finally expanded far outside of a smaller section of pandemic winners like Amazon (AMZN Quick Quote AMZN - Free Report) and others that were able to grow during social distancing. This showcases Wall Street’s growing optimism. And it’s not just the possibility of a vaccine that should have people in a bullish mindset.

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For instance, S&P 500 earnings came in stronger than expected in Q3 and the outlook was improving well before the Pfizer and Moderna news. Plus, investors must always remember that the Fed is prepared to keep its interest rate near zero through at least 2023. This should help support stocks as Wall Street chases returns.

With this in mind, let’s look at three highly-ranked stocks that are trading for under $25 per share that investors might want to consider buying after the market’s November rally…

SelectQuote, Inc. (SLQT Quick Quote SLQT - Free Report)

Prior Close: $21.45 USD

SelectQuote was founded in 1985 and the tech-focused insurance company went public in May of 2020. The firm uses a direct-to-consumer comparison model to help people find the right auto and home insurance, as well as life insurance and senior health insurance.

The firm boasts that its proprietary technology allows it to “find people the right coverage with the right carrier at the right price in just minutes.” The company has crushed our bottom line estimates in the trailing two periods and it is coming off an impressive first quarter of FY21 that saw its revenue soar 91%.

The company’s top-line expansion was driven by 165% growth in its senior unit, which accounted for roughly 60% of total sales. This space allows people to select from a range of Medicare Advantage and Medicare Supplement plans from “15 leading, nationally-recognized carriers, as well as prescription drug plan, dental, vision and hearing plans.”

SLQT stands to benefit from an aging U.S. population. “The first Baby Boomers reached 65 years old in 2011,” Dr. Luke Rogers of the U.S. Census Bureau said in prepared remarks in June 2020. “Since then, there’s been a rapid increase in the size of the 65-and-older population, which grew by over a third since 2010. No other age group saw such a fast increase.”

Zacks estimates call for SelectQuote’s current-year sales to surge over 60% to reach $853.6 million, which would top FY20’s 58% revenue expansion. Its FY22 sales are then projected to climb another 35% to $1.2 billion. Meanwhile, SLQT is expected to swing from an adjusted loss of -$0.16 a share to +$0.83 this year, with FY22 projected to jump another 40%. Plus, SelectQuote’s EPS revisions help it land a Zacks Rank #2 (Buy) right now.

SLQT has jumped 30% over the last month, which includes its November 5 earnings release, and it closed regular trading Monday at $21.45 a share. Despite its strong run over the last month, SelectQuote sits 25% below the $29 it traded at in early June after its post-IPO climb. And five of the nine brokerage recommendations Zacks has accumulated for SelectQuote come in at “Strong Buy” with two more at a “Buy.”

TRI Pointe Group, Inc. (TPH Quick Quote TPH - Free Report)

Prior Close: $17.48 USD

TRI Pointe Group is one of the biggest public homebuilders in the U.S. and sits in the top 10 in terms of sales. The Irvine, California-based firm designs, constructs, and sells single-family homes and condos through its portfolio of six regional brands. The company operates in key hubs within California, Texas, Colorado, Arizona, Virginia, and many other locations. TRI Pointe’s revenue climbed by over 16% in both FY17 and FY18, before it slipped by 5% last year. Luckily, the housing market has started to boom again and the company topped our Q3 estimates.

Last quarter, TRI Pointe’s net new home orders jumped 50%, with its backlog dollar value up 39%. Zacks estimates call for the company’s full-year fiscal 2020 revenue to climb 1% to $3.1 billion. Then, its FY21 revenue is projected to surge another 15% higher, as it benefits from the soaring housing market. TRI Pointe’s adjusted earnings are projected to jump by 28% and 33%, respectively over this stretch.

TRI Pointe’s earnings revisions help it grab a Zacks Rank #1 (Strong Buy) at the moment. The stock also boasts “B” grades for Growth and Momentum in our Style Scores system. TPH shares have slightly outpaced its industry over the last 12 months, up 18%. It is also worth pointing out that its Building Products-Home Builders space rests in the top 3% of our over 250 Zacks industries. Plus, the company announced in November that its board approved a new stock repurchase program of up to $250 million.

More broadly, U.S. home sales jumped to a 14-year high in October, which marked the fifth straight monthly increase. The recent growth has been spurred by the coronavirus that has millions of Americans searching for more space. On top of that, millennials continue to reach their prime homebuying years and a shortage of homes could help TRI Pointe and other homebuilders going forward. And TRI Pointe stock rests about 10% off its mid-October highs, which could make it more enticing.

Glu Mobile (GLUU Quick Quote GLUU - Free Report)  

Prior Close: $10.11 USD

Mobile gaming plays a pivotal role in the growth of the broader gaming industry that’s set to expand from $159 billion this year to over $200 billion by 2023. Investors should note that mobile gaming is projected to account for roughly 50% of the market this year vs. the console space’s 28% and PC’s 25%. Glu Mobile, with a portfolio that includes Deer Hunter, Kim Kardashian: Hollywood, MLB Tap Sports Baseball, Disney Sorcerer’s Arena (DIS Quick Quote DIS - Free Report), and other popular titles, stands to benefit from this expansion and importance. 

Glu beat our Q3 earnings estimates by roughly 60% in early November. Meanwhile, the company’s revenue soared 48% to a record of $158.5 million, with bookings up 22%. Peeking ahead, Zacks estimates call for its fiscal 2020 sales to climb over 31% to $556 million, with another 11% expansion projected in FY21. And the mobile gaming firm’s adjusted earnings are expected to skyrocket over 140% this year and another 34% next year.

Glu’s post-release earnings revisions help it grab a Zacks Rank #2 (Buy) right now, alongside its “A” grade for Growth in our Styles Scores system. The company is also part of a highly-ranked industry that includes Activision Blizzard (ATVI Quick Quote ATVI - Free Report), Mattel (MAT Quick Quote MAT - Free Report), and others. GLUU shares have surged 40% in the last month, as part of an 85% climb during the past year. And it still sits about 7% off its April 2019 records.

On top of that, GLUU trades below its own 12-month highs in terms of forward sales and at a big discount to its industry at 2.8X vs. 5.5X. And perhaps most importantly, millions and millions of people around the world are addicted to their smartphones.

Disclaimer: Neither Zacks Investment Research, Inc. nor its Information Providers can guarantee the accuracy, completeness, timeliness, or correct sequencing of any of the Information on the Web ...

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