Top Cheap Stocks To Watch For 2018

In the stock market, I have a couple rules I like to follow. One of them is to almost always stay away from stocks trading under $5. After all, there is a reason they are under $5, and its not because things are going well. But every once in a while, one finds a hidden gem among these cheap stocks. I think Rite Aid Corporation (NYSE:RAD) is one of those hidden gems.

I’ve stated my bull thesis on RAD stock before, but I’ll do so here as well.

RAD is a stock that has staged big comebacks before ($2 to $9 in 2001, $2 to $6 in 2003 and $1 to $9 in 2012-14), so this is a stock that does go down, but normally doesn’t stay down. The drivers of the most recent comeback in 2012-14 were leverage reduction, a depressed valuation and a turnaround in comparable sales growth.

RAD stock is set to benefit from all 3 of those same drivers soon.

An influx of cash from a huge deal with Walgreens Boots Alliance Inc (NASDAQ:WBA) will go towards paying down a ton of debt, resulting in sizable leverage reduction soon. The EV/EBITDA multiple on RAD stock is just over 7 — exactly where it was back in 2013. Meanwhile, comparable sales growth will likely go from negative to positive soon, because comp growth at RAD is cyclical (comps were up in fiscal 2009, down in 2010 and 2011, up in 2012, down in 2013, up for the next 3 years and down the next 2 years).

Top Cheap Stocks To Watch For 2018: The First of Long Island Corporation(FLIC)

Advisors’ Opinion:

  • [By Dividends4Life]

    The First of Long Island Corporation (FLIC) operates as a bank holding company for The First National Bank of Long Island that provides financial services. Sept. 19, the company increased its quarterly dividend 4% to $0.26 per share. The dividend is payable Oct. 11, 2013 to shareholders of record on October 3, 2013. The yield based on the new payout is 2.7%.

Top Cheap Stocks To Watch For 2018: American Airlines Group, Inc.(AAL)

Advisors’ Opinion:

  • [By Ben Levisohn]

    Oglenski assigned a $105 price target to United Continental, a $33 target to JetBlue, and a $122 target to Alaska Air. And even his equal weights, like America Airlines (AAL) and Southwest Airlines (LUV) have “material upside,” Oglenski says. He expects American to hit $62, and Southwest to hit $65.

  • [By Ben Levisohn]

    March has brought madness to airline stocks, including United Continental Holdings (UAL), Delta Air Lines (DAL), and American Airlines (AAL). But the recent pullbacks aren’t a buying opportunity, say Imperial Michael Derchin and Adam Hackel.

  • [By Casey Wilson]

    American Airlines Group Inc. (Nasdaq: AAL) experienced a corporate scandal after a woman was thrown off of one of its planes on April 22 — after a flight attendant allegedly whacked her with her baby’s stroller, almost hitting the baby in the process.

  • [By Teresa Rivas]

    American Airlines (AAL) soared to the top of the S&P 500 today.

    Getty Images

    The shares climbed $1.61, or 3.8%, to $43.93, compared to the S&P 500, which fell 3.38 points, or 0.14%, to 2353.78.

    Investors cheered American Airlines increased first-quarter unit revenue and margin guidance.

    The airline said it expects first-quarter total revenue per available seat mile to be up between 2% and 4% year over year, compared to previous guidance for a 1.5% to 3.5% increase. It expects adjusted pre-tax margins to be between 4% and 6%, compared to previous guidance of 3% to 5%.

    For the month of March, it said that revenue passenger miles and available seat miles were down.

    Fellow airline United Continental(UAL) also released March metrics today, although it down on the backlash to a video showing apassenger being dragged off a plane.

    Whole Foods Market(WFM)was the best performer in the S&P 500 yesterday.

Top Cheap Stocks To Watch For 2018: Laboratory Corporation of America Holdings(LH)

Advisors’ Opinion:

  • [By Monica Gerson]

    Laboratory Corp. of America Holdings (NYSE: LH) is estimated to report its quarterly earnings at $1.96 per share on revenue of $2.19 billion.

    Roper Technologies Inc (NYSE: ROP) is projected to report its quarterly earnings at $1.46 per share on revenue of $895.87 million.

  • [By Monica Gerson]

    Analysts expect Laboratory Corp. of America Holdings (NYSE: LH) to report its quarterly earnings at $1.96 per share on revenue of $2.19 billion. Laboratory Corp shares rose 0.64 percent to close at $121.77 on Friday.