The Nasdaq 100 has had an impressive run since the Covid-19 pandemic set in last year. The index fell in the early days, losing more than 25% of its value from mid-February to mid-March.
It recovered, and has had a relatively steady ride ever since, partially owing to the Federal Reserve (Fed) lowering the target range for its benchmark interest rate on 15 March 2020 to the record-low of 0-0.25%.
In addition, the US central bank also announced a new round of quantitative easing, under which it raised its holdings of Treasury securities’ by at least $500bn and agency mortgage-backed securities by at least $200bn.
In the months following the onset of the pandemic, US government policies such as offering stimulus checks and unemployment benefits, among others, coupled with the Fed’s dovish monetary policy, kept the US economy afloat.
However, the index’s gain could be down to investors’ responding to lower yields on US government bonds. Real or inflation-adjusted yields on the country’s bonds have been negative, irrespective of higher inflation, which could have attracted investors to stocks and other asset classes.
Five cheapest NASDAQ 100 stocks
Let’s take a look at the Nasdaq 100 cheapest companies’ stocks (as of 23 November 2021) and consider the factors that drive their price performance.
Note that stocks discussed in this article are cheap only in nominal terms. This article does not constitute investment advice and should not be used as such. Always conduct your own due diligence before investing. And never invest or trade money you cannot afford to lose.
Sirius XM Holdings
Sirius XM (NASDAQ:SIRI) is the Nasdaq 100 lowest-priced stock, currently trading at $6.21 (23 November). The stock may have gained around 0.3% on a year-to-date basis, but over the past five years, it’s soared by 34.4%.
The New York-based broadcasting company’s broad range of new shows, podcasts and channels across various platforms, and new deals with National Football League legends, like Tom Brady and Larry Fitzgerald, have raised its digital reach and subscriber base. The company added a record 616,000 net new SiriusXM self-pay subscribers in the third quarter ended 30 September 2021.
The company’s Q3 revenue rose 9% to $2.20bn from a year earlier, while its net income surged to $343m from $272m during the same period. Sirius XM’s net income per diluted common share also increased to $0.08 from $0.06 in the year-ago period.
The company has a market capitalization of $24.32bn. It holds an average rating of ‘hold’ from eight ratings aggregated by MarketBeat, with four analysts giving a ‘buy’ recommendation, three giving a ‘hold’ and one a ‘sell’. The stock has an average price target of $7.49, varying from the low price target of $6 to the high of $8.
Trip.com Group (NASDAQ:TCOM) is second on the list of cheap Nasdaq 100 stocks. It has a current price of $29.40 and a market capitalization of $18.78bn.
The Shanghai-based online travel company recently announced a strategic global deal with Wyndham Hotels & Resorts, under which 9,000 hotels by Wyndham across 22 brands from luxury to economy will be listed on Trip.com.
In a press release dated 17 November 2021, the company said that the partnership will boost Trip.com’s accommodation inventory for travellers. In addition, Trip.com Group and Wyndham Hotels & Resorts' alliance in Greater China will also benefit from the deal as the company will be able to meet higher demand from Chinese guests’ bookings.
The stock has declined 13.3% on a year-to-date basis and plunged 35.5% over the past five years.
The company holds an average rating of ‘buy’ from 12 ratings aggregated by MarketBeat, with nine analysts giving a ‘buy’ recommendation and three rating the stock a ‘hold’. The stock has an average price target of $43.75, varying from the low price target of $32 to the high of $51.
Kraft Heinz (NASDAQ:KHC) is the third on the list of the cheap Nasdaq 100 shares. It has a current price of $35.47 and a market capitalization of $43.46bn.
The company recently raised its full-year outlook, based on a strong performance in the third quarter ended 25 September 2021.
The company increased its expectations for 2021 adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) from at least $6.1bn to more than $6.2bn, on the basis of better-than-expected organic net sales along with the company’s ongoing efforts to manage inflationary pressures.
Kraft Hein’s net income attributable to common shareholders surged 23% to $733m in the fiscal third quarter, up from $597m a year earlier. Diluted earnings per share soared 20.4% to $0.59 from $0.49 during the quarter.
The stock increased 3.2% on a year-to-date basis and fell 57.4% over the past five years.
The company holds an average rating of ‘hold’ from eight ratings aggregated by MarketBeat, with one analyst giving a ‘buy’ recommendation, six rating it a ‘hold’ and one a ‘sell’. The stock has an average price target of $38.88, varying from the low price target of $33 to the high of $45.
Keurig Dr Pepper
Keurig Dr Pepper (NASDAQ:KDP) is the fourth-cheapest stock on the Nasdaq 100. It has a current price of $35.86 and a market capitalization of $50.85bn. The stock increased 11.3% on a year-to-date basis and surged 148.1% over the past five years.
The company reported strong third-quarter sales, and raised its guidance for net sales growth for the full-year.
Net sales for the quarter ended 30 September 2021 rose 7.6% to $3.25bn, compared to $3.02bn in the year-ago period. Net sales were driven by growth in each business segment, with beverage concentrates and Latin America beverages achieving double-digit growth. Disputed earnings a share surged 12.8% to $0.44 in the third quarter this year from $0.39 a year ago.
Keurig Dr Pepper expects net sales in 2021 to jump from 7% to 8% and the adjusted diluted EPS to increase in the range of 13% to 15% for the period.
The company holds an average rating of ‘buy’ from nine ratings aggregated by MarketBeat, with five analysts giving a ‘buy’ recommendation and the rest a ‘hold’. The stock has an average price target of $38.50, varying from the low price target of $33 to the high of $42.
CSX (NASDAQ:CSX) is the fifth of the low-cost Nasdaq 100 stocks. It has a current price of $36.05 and a market capitalization of $79.96bn. The Florida-based rail-based freight transportation provider saw its stock rising 23% on a year-to-date basis and 207.6% over the past five years.
The company’s fundamentals appear stable. CSX announced on 20 October 2021 third-quarter net earnings of $968m, or $0.43 a share, up from $736m, or $0.32 a share, from the last-year period.
Revenue soared to $3.29bn from $2.65bn during the period, driven by growth across all business lines, gains in other revenue and the inclusion of quality carriers’ results. CSX’s operating ratio in the quarter ended 30 September 2021 was 56.4%, compared to 56.9% a year earlier.
CSX holds an average rating of ‘buy’ from 19 ratings aggregated by MarketBeat, with 13 analysts giving a ‘buy’ recommendation, five rating the stock a ‘hold’ and one a ‘sell’. The stock has an average price target of $36.65, varying from the low price target of $21 to the high of $42.
Note that analyst predictions can be wrong. Forecasts shouldn’t be used as a substitute for your own research. Always conduct your own due diligence before investing. And never invest or trade money you cannot afford to lose.
As of 23 November 2021, the five cheapest Nasdaq 100 stocks are Sirius Holdings, Trip.com Group, Kraft Heinz, Keurig Dr Pepper and CSX Corporation.
Note that stocks listed above are cheap only in nominal terms. This article should not be used as investment advice. Always conduct your own due diligence before investing. And never invest or trade money you cannot afford to lose.
There are no Nasdaq-100 penny stocks. The cheapest stock on the index is currently priced at $6.08. To be classified as a penny stock, shares should cost under $5. Penny stocks aren’t typically traded on national exchanges such as NYSE and Nasdaq.
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