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Have $10,000? These 3 Stocks Could Be Bargain Buys for 2023 and Beyond.

Motley Fool - Tue Oct 24, 2023

Everyone loves a bargain. After all, there's a reason that nearly every retailer worth its salt runs a loyalty program or offers percentage discounts -- it draws in business.

But it can be more difficult to find bargains in the stock market. Nevertheless, they are there -- if you know where to look. Here are three stocks that have revealed themselves to be bargain buys.

Piggy bank with dollar bills stuffed in it.

Image source: Getty Images.

1. Meta Platforms

Topping the list of bargain buys is MetaPlatforms(NASDAQ: META). As the operator of Facebook, Instagram, and WhatsApp, Meta is a digital advertising powerhouse. In fact, in its most recent quarter (the three months ending on June 30, 2023), the company generated $31.5 billion -- or 98.5% of its revenue -- from advertising on its networks.

The strength behind Meta's business segments is its vast number of users, which generates a massive network effect. The company boasts over 2 billion daily average users. To put that in perspective, that's roughly 25% of the entire world population.

At any rate, Meta's recent performance is all the more impressive given the state of the digital ad market. With the global economy still on shaky ground, the company has posted fantastic revenue and earnings growth so far in 2023. Looking ahead, analysts anticipate the company to grow sales a further 13% in 2024, while earnings growth is projected to rise to 24%.

Considering that Meta shares still trade at a price-to-sales (P/S) ratio roughly 9% below their five-year average, the stock looks like a bargain buy.

META PS Ratio Chart

META PS Ratio data by YCharts

2. Super Micro Computer

Next up is a company you may not know, but you should. It's Super Micro Computer(NASDAQ: SMCI). Super Micro Computer is a cloud services company. But rather than focusing on services, Super Micro Computer provides the nuts and bolts that make the cloud float, so to speak.

The company offers customized hardware and storage solutions, such as motherboards, power supplies, and networking gear. And since the cloud market remains one of the hottest tech subsectors around, business is booming.

In its most recent quarter (the three months ending on June 30, 2023), Super Micro Computer posted year-over-year revenue growth of 34%. Similarly, earnings per share soared 38%.

Better yet, shares remain quite affordable, trading at a P/S ratio of 2. That's a bargain for a tech stock -- a sector where the average stock trades at a P/S ratio north of 4.

3. Intel

Rounding out the list of bargain tech buys is Intel(NASDAQ: INTC). Intel is an iconic company and a long-standing market leader in the semiconductor field. However, in recent years, the stock has underperformed as Intel's management struggled to adapt to a weak personal computer (PC) market and the growth of the cloud market.

Yet, a new management team headed by CEO Pat Gelsinger has set a new strategic vision. Intel is set to deprioritize PC chips and ramp up innovation. Gelsinger wants Intel to become a leader in artificial intelligence, data center computing, and quantum research.

All that said, it will take time to execute this plan. The company is investing in new plants, including two in Ohio and one in Germany.

In the meantime, Intel remains a bargain buy. Shares trade at a price-to-book ratio of 1.4. That's significantly below the company's 10-year average of 2.6.

INTC Price to Book Value Chart

INTC Price to Book Value data by YCharts

And if that weren't enough, Intel sports a solid 3.5% dividend yield. All in all, it adds up to a stock that long-term investors should consider scooping up from the bargain bin.

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Jake Lerch has positions in Intel and has the following options: short November 2023 $27 calls on Intel. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool recommends Intel and Super Micro Computer and recommends the following options: long January 2023 $57.50 calls on Intel and long January 2025 $45 calls on Intel. The Motley Fool has a disclosure policy.

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