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Do you have $1,000? 3 stocks to buy now while they’re on sale

When it comes to the stock market, $1,000 may seem like pocket change. After all, a single share of many of the market’s best stocks costs hundreds or even thousands of dollars.

However, most brokers now allow investors to buy fractional shares of companies through commission-free trades. Therefore, it is actually easy for investors to gradually build positions in their favorite stocks with less than $1,000.

Someone fans out a handful of hundred dollar bills.Someone fans out a handful of hundred dollar bills.

Someone fans out a handful of hundred dollar bills.

Image source: Getty Images.

But before you start buying fractional shares of the market’s hottest stocks, remember Warren Buffett’s famous quote about value investing: “Whether we’re talking stocks or socks, I like to buy quality items when they’re marked down.” So for those savvy bargain hunters who want to follow the Oracle’s advice, I believe Alibaba.com (NYSE: BABA), Vici properties (NYSE:VICI)And Kraft Heinz (NASDAQ: KHC) are great value stocks to buy.

1.Alibaba

Alibaba, China’s largest e-commerce and cloud infrastructure company, is trading more than 70% below its all-time high. It’s also up less than 30% since its IPO almost a decade ago, and looks cheap at eleven times forward earnings.

Alibaba shares are trading at a discount as growth has been temporarily derailed by regulatory, macro and competitive headwinds over the past three years. China’s antitrust regulators imposed a record fine on the country in 2021 while imposing tighter restrictions on the e-commerce market; the country’s ‘zero COVID’ lockdowns exacerbated those pressures, and aggressive competitors such as Pinduoduo lured some shoppers away.

The escalating trade and technology war between the US and China made Alibaba’s stock even less attractive, and its shares crumbled. However, Alibaba’s revenue rose 8% in fiscal 2024 (which ended in March), an acceleration from 2% growth in fiscal 2023, and analysts expect another 8% growth in fiscal 2025.

That recovery is driven by the expansion of overseas e-commerce markets, the growth of logistics activities and the stabilization of domestic activities. Alibaba also generated enough cash to buy back $12.5 billion of shares in fiscal 2024 and declare its first annual dividend of $1.00 per ADR, which equates to a forward yield of 1.3%. These strengths indicate that Alibaba is deeply undervalued, and the country should recover as investors return to China’s top stocks.

2. Vici properties

Vici Properties is a real estate investment trust (REIT) that owns casino and entertainment properties in the US and Canada. The largest tenants include Caesar’s Entertainment, MGM Resorts, Penn Entertainment, Century casinosAnd Bowlero. It retains tenants with multi-decade contracts and has maintained a 100% occupancy rate since its initial public offering six years ago.

As a REIT, Vici is required to distribute at least 90% of its taxable income as dividends to its investors to maintain a favorable tax rate. It is also a net lease REIT, meaning tenants must cover their own insurance costs, maintenance costs and taxes. That simple business model makes it a reliable play for conservative income investors.

Like many REITs, Vici lost its luster as rising interest rates made it harder to buy new properties and reduced the appeal of its dividends. But with interest rates set to stabilize and decline in the near future, it makes sense to buy Vici again as a long-term income source. Vici currently trades at just 14 times estimated 2024 adjusted operating funds (FFO) per share, and pays an attractive dividend yield of 5.5%.

3. Kraft Heinz

Kraft Heinz, created from the merger of Kraft Foods and Heinz in 2015, is one of the largest packaged food companies in the world. In addition to its two namesake brands, it also owns Oscar Mayer, Velveeta, Jell-O, Philadelphia and Kool-Aid.

In its first few years, Kraft Heinz struggled to grow as many of its customers focused on healthier products and private label brands. Instead of innovating to reverse that slowdown, it focused too much on cutting costs to boost profits.

But under Miguel Patricio, who became CEO in 2019, Kraft Heinz gradually fixed its ailing business by rolling out new marketing campaigns for its classic brands, divesting its weaker brands, expanding its stronger brands and raising its prices to to compensate for the slower transmissions. It also streamlined its spending to stabilize profit growth.

That turnaround strategy has paid off. In 2023, organic revenue increased 3%, while adjusted earnings per share grew 7%. For 2024, the company expects organic revenue to grow 0%-2%, while adjusted earnings per share to grow 1%-3%. Based on the midpoint of these estimates, the stock is trading at just twelve times earnings this year. It also pays an attractive forward yield of 4.4%. Kraft Heinz stock won’t take off anytime soon, but it’s a reliable blue chip that’s still trading at a discount to many of its peers.

Should You Invest $1,000 in Alibaba Group Now?

Consider the following before buying shares in Alibaba Group:

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Leo Sun has positions in Vici Properties. The Motley Fool holds and recommends positions in Vici Properties. The Motley Fool recommends Alibaba Group and Kraft Heinz and recommends the following options: long January 2025 $25 calls on Penn Entertainment and short January 2025 $30 calls on Penn Entertainment. The Motley Fool has a disclosure policy.