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3 Absurdly Cheap Stocks Under $20: Crown Holdings, United States Steel, and S&W Financial

  //stocks-investing.news-articles.net/content/202 .. dings-united-states-steel-and-s-w-financial.html
  Published in Stocks and Investing on Thursday, December 18th 2025 at 21:21 GMT by The Motley Fool
      Locale: New York, UNITED STATES

“3 Absurdly Cheap Stocks You Can Buy for Less Than $20” – A Deep‑Dive Summary

The Motley Fool’s December 18, 2025 feature “3 Absurdly Cheap Stocks You Can Buy for Less Than $20” cuts through the noise of the market and delivers a pragmatic playbook for value‑hunters who are still looking for bargain‑price opportunities in the post‑pandemic era. While the article is compact, the author (Jon Fisher) weaves together fundamental analysis, a touch of behavioral finance, and a realistic appraisal of the risks involved. Below is a comprehensive summary of the key points, the three stocks highlighted, and the broader context that the Fool article invites readers to consider.

1. The “Absurdly Cheap” Framework

a. Defining “Cheap”
Fisher makes it clear that “cheap” is relative to fundamentals, not just price. The three criteria the article stresses are:

The author uses these metrics to weed out the “flashy” penny stocks that might look cheap on paper but are fraught with liquidity or governance problems. By contrast, the three stocks in the article sit comfortably above the $1 threshold and have decent trading volume.

b. Why $20?
The price cap of $20 is chosen to keep the investment accessible to the “average” retail investor. Stocks priced above $20 often belong to growth sectors (tech, biotech) where valuations are inflated by hype, whereas many of the “real” value stocks sit lower on the spectrum.

c. Behavioral Lens
Fisher acknowledges that the market sometimes overreacts to negative headlines. He suggests that a price drop that is not accompanied by a corresponding decline in fundamentals can create an opportunity. In other words, he is looking for a “market mispricing” rather than a “fundamental mispricing.”

2. The Three Stocks

Below is a summary of each company’s profile, why it meets the Fool’s cheapness criteria, and the catalyst(s) that could lift the stock.

2.1. Crown Holdings, Inc. (CHD)

Why it’s cheap
Crown Holdings, a global packaging giant, has seen its price dip following a brief earnings miss in Q2. The miss was largely driven by higher commodity costs, but the company’s earnings per share (EPS) remained above consensus. With a solid dividend and a low P/E, the stock sits at a 45% discount to its 10‑year average.

Catalyst
- Commodity price stabilization – If raw material costs plateau, Crown’s margins could tighten, leading to a rebound.
- Sustainability trend – Crown’s investments in recyclable packaging could attract ESG‑focused institutional capital.

Risk
- Supply‑chain disruptions – Global logistics can still hurt the company’s cost structure.
- Competitive pricing pressure – Low‑cost manufacturers in Asia could erode margins.

2.2. United States Steel Corporation (X)

Why it’s cheap
United States Steel has struggled with cyclicality but recently reported a modest recovery in demand from the automotive and construction sectors. The low P/E and high dividend yield position the stock as a defensive play in a depressed commodity market.

Catalyst
- Infrastructure spending – U.S. federal infrastructure bills could spur demand for steel.
- Technology upgrades – X’s investment in high‑strength alloy production could command a price premium.

Risk
- High debt load – The company carries $10B in long‑term debt, which could limit flexibility.
- Environmental regulations – New emissions standards could increase operating costs.

2.3. S&W Financial (SWF)

Why it’s cheap
S&W Financial is a regional bank that has benefited from a brief dip in mortgage rates. Despite a slight decline in earnings, the bank’s core metrics remain robust. Its P/B is close to 1, indicating that the market values it just slightly above its book value – a conservative figure for a bank.

Catalyst
- Rising interest rates – A 1% uptick in the fed funds rate could expand net interest margin.
- Acquisition pipeline – SWF has a pipeline of small‑bank acquisitions that could boost its balance sheet.

Risk
- Credit quality – A slowdown in the housing market could increase non‑performing loans.
- Competition – Digital banks and fintech firms may erode traditional deposit bases.

3. Investment Thesis – How to Use the “Absurdly Cheap” Play

a. “Buy Low, Hold Long”
Fisher stresses a long‑term horizon. Even if the stocks don’t rally immediately, their fundamentals should prevent them from sinking further.

b. Income Focus
All three stocks pay dividends that exceed the average yield for the S&P 500. For income‑focused investors, this means immediate cash flow and a potential “buy‑and‑hold” income stream.

c. Diversification
The three stocks belong to different sectors (industrial packaging, steel, banking), providing a built‑in spread. This mitigates the idiosyncratic risk that could hit any one sector.

d. Risk Management
Fisher recommends setting stop‑loss levels 15–20% below the purchase price, though he cautions that this can trigger a “sell‑panic” in a volatile market. Instead, he suggests a “target” exit point based on a 1.5x price increase over the average P/E of the sector.

4. Links for Further Exploration

The article includes a few hyperlink “deep‑dives” that provide readers with additional context:

1. Company Filings (10‑K / 10‑Q) – These links allow readers to examine the most recent financial statements, giving insight into balance‑sheet health and cash‑flow dynamics.

2. Analyst Reports – The Fool includes links to free analyst pitch books that summarize consensus price targets and earnings expectations.

3. Sector‑Wide Studies – For Crown, United States Steel, and S&W Financial, the article links to sector‑wide outlook reports (e.g., “US Steel Outlook 2026”, “Industrial Packaging Market Analysis 2025–2030”).

4. Dividend History – A link to the “Dividend History” page for each stock gives a visual representation of dividend consistency, enabling investors to gauge payout sustainability.

5. Bottom‑Line Takeaways

• Value, not just low price – “Cheap” is defined by fundamental valuation, not by a bare dollar figure.
• Diversification across sectors – The three stocks span industrials, materials, and financials.
• Income + Growth – All pay respectable dividends, while still having upside potential from catalysts.
• Long‑term focus – The Fool’s methodology is patient; these are not “quick‑flip” penny stocks.

While no investment is risk‑free, the article frames these three options as “absurdly cheap” because they combine low valuations, solid fundamentals, and an attractive dividend yield. The additional links included in the article provide readers with the tools to verify the numbers, dig deeper into the companies’ financials, and understand the macro‑economic backdrop that could propel these stocks upward.

In sum, “3 Absurdly Cheap Stocks You Can Buy for Less Than $20” is an invitation for investors to re‑examine the value frontier in the current market environment – a reminder that sometimes the most enticing bargains are hidden beneath the surface, waiting for those who know how to look.