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Top 5 Cheap Stocks To Invest In 2019

Investing in the stock market is the surest way to build long-term wealth. Diversification among companies, industries, and types of securities is the key to ensuring that investors can reach their goals. Technology stocks can provide a boost to returns, as these companies are often on the cutting edge, making groundbreaking discoveries that change our everyday lives.

With that in mind, we asked three Motley Fool investors to choose top companies they believe to be offering compelling opportunities in the tech sector. They provided convincing arguments for these stocks.

Top 5 Cheap Stocks To Invest In 2019: Southern Company (SO)

 No list of retirement stocks to mull would be complete without at least one utility stock. Even when times are tough, consumers find a way of keeping the lights on.

One of the best-of-breed choices among utility stocks is Southern Co (NYSE:SO), which serves nine million customers, mostly in the southern part of the United States.

Delivering electricity isn’t a simple or a cheap business, to be fair. In fact, cost overruns and delays at a couple of new facilities helped send SO shares to new 52-week lows last week. They’re just temporary headwinds though, which Southern has shrugged off before. In the meantime, the pullback has driven the well-protected dividend yield up to 5%, which is better than the industry’s current average.

Top 5 Cheap Stocks To Invest In 2019: RealNetworks, Inc.(RNWK)

RealNetworks Inc (NASDAQ:RNWK) is the company that launched RealPlayer, a digital music service, back in the bygone dotcom era.

And it had a quite a run back then.

But the music and media business has been challenging, with new players gaining attention of younger listeners, and new platforms leapfrogging over older ones as Gen Zs choose new options.

To its credit, RNWK has stayed in the game, adapting to new technologies and finding ways to remain relevant in the cloud, with messaging and mobile. But the stock continues to wither, off 22% in the past year, and that’s after a continued slide over the years.

It lost its traction years ago and can’t seem to get it back.

Top 5 Cheap Stocks To Invest In 2019: Control4 Corporation(CTRL)

Pretty much everything is getting smarter these days. Smartphones, smart cities, just about smart everything. It only makes sense that smart homes will likely become more and more a part of our lives in the coming decades. That’s great news for investors of Control4 Corp., a provider of smart-home products and solutions.

Control4 rocketed 191.8% higher in 2017 before taking a breather and giving up some of those gains in 2018. However, the stock popped 13% on May 4, after releasing first-quarter results that included 18% revenue growth and beat estimates on both the top and bottom lines. Control4 has plenty of room to grow considering management believes it has penetrated less than 2% of the 17.2 million U.S. households that generate over $150,000 annual income. Here’s the kicker: Its international opportunity is even larger, and largely untested by the company thus far. 

One intriguing path for Control4 to grow, in addition to its rapid organic growth, is by acquisitions. It’s already successfully acquired and integrated five companies. And with no debt on the balance sheet, it’s in a great position to strike if it finds a business that fits its business model and can accelerate growth. Management must capture more of the wealthy households in the U.S., expand its product lineup to increase sales from its customers, and expand internationally when the time is right. If those things are achieved, Control4’s growth is just getting started.

Top 5 Cheap Stocks To Invest In 2019: Tuesday Morning Corp.(TUES)

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Dallas-based Tuesday Morning Corporation(NASDAQ:TUES) has become one of many retailers which have struggled to stay profitable in a changing retail environment. Founded in 1974, the company expanded across the country, operating in 41 states by 2001. During the past few years, the company has been plagued by high turnover in its top management and struggled to remain profitable.

Still, the company operates 724 stores across the U.S., which by itself should make it one of the hot penny stocks. Moreover, revenue grew by 10% in its latest quarterly report. Comparable store sales rose by 9.1% in Q1 as well. Investors should also note that the company relocated 58 stores in the last 12 months. At those stores, sales grew by 65%. This latest report held many encouraging signs for the company.

However, given that analysts expect net losses for both the current year and the year after, investors should still treat this stock as speculative.

Still, a stock price in the $3.30 per share range and a market cap of about $140 million seems low for a company with 724 stores. Traders should also keep in mind that this stock traded at over $22 per share in late 2014. If management can maintain revenue increases and return TUES stock to profitability, those who buy now could enjoy outsized gains from a dramatic comeback.

Top 5 Cheap Stocks To Invest In 2019: Magellan Midstream Partners L.P.(MMP)

This company is among the most conservatively run midstream oil and natural gas players. Its debt-to-EBITDA ratio is well below industry bellwethers like Enterprise Products Partners L.P. and Kinder Morgan, Inc. And it avoids dilutive unit issuance, with its unit count effectively flat over the past five years compared to a roughly 17% rise at Enterprise.

With Magellan’s price down roughly 33% from 2014 highs, it’s a good time for investors to pick up an industry-leading name on the cheap. But why the sell-off?

The answer is that investor sentiment on the midstream space has turned negative, with the Alerian MLP ETF down 50% from its highs. The negative shift isn’t unreasonable, as some midstream players are highly leveraged and a number have been forced to trim distributions. But neither of those issues apply to Magellan, which has increased its distribution every quarter since its IPO in 2001.

MMP Average Diluted Shares Outstanding (Quarterly) Chart

MMP AVERAGE DILUTED SHARES OUTSTANDING (QUARTERLY) DATA BY YCHARTS.

More important for the future, Magellan plans to keep increasing distributions between 5% and 8% a year between now and 2020 while maintaining robust distribution coverage of 1.2 times. The key is its pipeline of capital investments. But Magellan doesn’t build on spec, it only risks its unitholders’ money when it has a good reason to do so.

For example, of the roughly $1.2 billion in spending planned for this year and next, virtually all of the projects have customers lined up, which clearly illustrates a need for expansion at existing assets. As an industry standout, Magellan is a solid option for any investor.