2 Bargain Stocks You Can Buy Right Now

By Markets Fool.com

Wouldn't it be nice to head back to March 9, 2009 -- the nadir of the stock market's Great Recession collapse -- and double down on all of your holdings? Everything was on sale back then. Alas, the stock market has advanced 250% (including dividends) since then.

Continue Reading Below

The problem is, those were scary times to be investing. And there's no way we could have known back then that things were going to get better. The same is true today: Though there aren't as many "screaming deals" as seven years ago, that doesn't mean that no stocks are offering up good deals.

Below are two companies that I believe are bargains at today's prices.

Greenbrier's bread and butter is in providing rail cars. Image source: Greenbrier IR.

Greenbrier (NYSE: GBX) is a company that provides manufacturing and maintenance of barges and railway cars. Between the aforementioned March 9, 2009, and late 2014, the company's stock soared nearly 4,000% on strong demand for Greenbrier's top-of-the-line railway cars.

As the global economy improved, so too did demand for railway cars to help transport goods. But starting in 2015, concerns about a slowing global economy -- with weakness in the energy sector playing a major role -- has made investors doubt Greenbrier's prospects.

Continue Reading Below

How skittish? Take a look at some basic valuation metrics for the company.

P/E Ratio

P/FCF Ratio

PEG Ratio

3.8

2.8

0.47

Data source: SEC filings, Yahoo! Finance.

Those are rock-bottom valuations. And indeed, there are valid concerns. Not only did deliveries of railcars fall 35% sequentially, but the company's backlog fell to 34,100 -- which is 1,900 less than it had the last time the company reported earnings.

But with demand cyclically drying up right now, is that really enough to make Greenbrier's shares this cheap? The company has $280 million in cash on its balance sheet. And with over $270 million in free cash flow over the past 12 months, the debt load (about $400 million) isn't a major cause for concern, either.

More important, railcars continue to be a consistently economical way for companies to ship goods across the world. Unless energy prices remain depressed for the next decade, I don't see the falloff in demand lasting forever. But when the rest of Wall Street realizes this, it may be too late to get in on such a deal. With a nice 3.1% dividend yield as added incentive, I think this represents a good entry point for interested investors.

Image source: GMC.com, a part of General Motors.

It's no secret why the average investor is wary of putting his/her money behind General Motors (NYSE: GM). The company's overhead is enormous, it carries a ton of debt ($71 billion)...and it was forced to declare bankruptcy during the Great Recession.

General Motors was literally a symbol of structural excess and waste. Today, investors are treating the company's shares like nothing has changed in the intervening seven years.

P/E Ratio

P/FCF Ratio

PEG Ratio

5.7

16

0.39

Data source: SEC filings, Yahoo! Finance.

Admittedly, because of the heavy debt load, and the strong divergence between P/E and P/FCF, there is an added level of risk with General Motors when compared to Greenbrier.

But the fact remains that this simply is not the same company that went bankrupt a few years back. Its cars are garnering much more favorable reviews, it has the most market share in America, the most market share by a foreign automaker in China, and will likely stop losing money in Europe within the next 12 months.

Like Greenbrier, investors are concerned about cyclicality. The surge of auto-buying -- a result of consumers delaying their purchases during Great Recession -- is coming to an end...or so the bearish line of thinking goes. But at today's prices, GM only needs to show modest growth for the stock to be a bargain. And if you buy in right now, you'll get an outsized 5% dividend yield to reward you for your long-term patience.

Understand the risks

Before diving in and buying shares of either GM or Greenbrier, it's important to understand the risks. I believe these companies look promising because so much pessimism is already priced into their stocks. As these are cyclical companies tied to the global economy, should a recession hit, my thesis would be moot.

That being said, I think investors who have a stomach for risk -- and understand the nature of investing in cyclicals -- would be smart to investigate both of these stocks.

The article 2 Bargain Stocks You Can Buy Right Now originally appeared on Fool.com.

Brian Stoffel has no position in any stocks mentioned. The Motley Fool recommends General Motors and The Greenbrier Companies. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.