3 stocks under $ 3 that should rebound in 2021

A lot of stocks have rallied in recent months, but that doesn’t mean everything the market has left is worthless. There are many stocks – even some with Happy Meal price tags – that have the potential to bounce back.

Brookdale retirement home (NYSE: BKD), trivago (NASDAQ: TRVG), and Light in the box (NYSE: LITB) are three stocks that are trading below $ 3 a share that I think have some serious advantages. Let’s see why I think these market laggards will rebound in the coming year.

Image source: Getty Images.

Brookdale retirement home

If you’re unfamiliar with Brookdale Senior Living, you’re probably scowling at the name anyway. COVID-19 has been devastating for assisted living and senior housing. Seniors are a high-risk group in this pandemic, and the residential buildings that house our country’s seniors have been a hotbed of bad news.

Brookdale owns and operates 737 senior citizen communities with the capacity to serve 65,000 residents. It’s not necessarily a company that was in great shape before the coronavirus outbreak prompted people to rethink the options for living the elderly. Income has declined in each of the past three years and Brookdale has struggled to generate a profit over the past decade. It hasn’t paid a dividend since 2008. Yes, 2008.

The good news is that people are not leaving retirement homes en masse. Brookdale’s weighted average occupancy rate has only fallen from 84% to 79.2% in the past year – and the average resident is paying a little more during that time. He also negotiated with the owner so that 120 of his communities permanent rent cuts for Brookdale in the future. With $ 600 million in cash and a stock that gave up more than 60% of its value in 2020, there is a high cap on the other end of the COVID-19 crisis.

trivago

The travel industry is another market that has seen fluctuations this year, and trivago is feeling the pain as an online platform for hotels and other accommodation options. Her last trimester was brutal, with a 93% drop in turnover.

The company was already cutting costs and sacrificing revenue growth for profitability as it was in the dark for each of the four quarters of last year. It should bounce back. He improved his platform during the lull. There are now 3.8 million ads of all types on the site. And its largest market is Europe, which is ahead of the pandemic front compared to the United States, so it is expected to recover faster than travel portals in the United States.

Light in the box

You might think stocks that trade below $ 3 are slow growing or loss making companies, but let’s throw a curve in closing this list with LightInTheBox. The Chinese e-merchant sells worldwide, sourcing everything from cutting edge clothing and consumer electronics to locally low-cost lighting solutions that allow it to offer really low prices for buyers who can be patient with the fulfillment process.

Growth won’t bother you. Revenue grew 96% in his last trimester. The forecast is for an increase from 59% to 83% in the current quarter. It has now generated four quarters of profits, taking profits to single digits. Investors are generally nervous when it comes to invest in chinese stocks, but LightInTheBox offers a mind-boggling combination of uber revenue growth with a very low revenue multiple. Now it’s only a matter of time before growth and value investors pay attention.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

About Andrew Miller

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