Are you looking to make smart investment choices without spending a lot? Want to know how to find stocks that are worth more than their price? In this article, we’ll explore cheap stocks to invest in and share our top picks.
Investing in cheap stocks can help grow your portfolio. It comes with risks, but with the right research, you can find stocks that could grow a lot. So, how do you find these hidden gems? Let’s look at some ways and tools to find the best cheap stocks.
Key Takeaways:
- Investing in cheap stocks can be a profitable way to diversify your portfolio.
- Proper research and analysis are crucial to identify undervalued stocks.
- Using a stock screener can help you identify potential candidates for further investigation.
- Consider factors like future earnings growth rate, P/E ratio, and market cap while evaluating cheap stocks.
- There are alternative investment strategies to consider apart from buying cheap stocks.
What are Cheap Stocks?
Cheap stocks, or low share price stocks, can be a good choice for investors wanting to make more money. But, not all cheap stocks are the same. The term “cheap” means the stock’s price is low, but it doesn’t mean the company’s value is low too.
Undervalued stocks are different. They are stocks that have strong financial health but are priced too low by the market. These stocks offer great value for their price. Investing in them could lead to higher returns over time.
When searching for cheap stocks, look at more than just the price. Do deep research on the company’s finances, growth potential, and its edge in the market. This helps find stocks that are priced too low but could grow a lot.
Remember, investing comes with risks, and cheap stocks can be more volatile than expensive ones. It’s important to spread out your investments and talk to a financial advisor. This way, you can make choices that fit your risk level and goals.
Key Characteristics of Undervalued Stocks:
- Strong financial fundamentals
- Potential for future growth
- Competitive advantage or unique market position
- Positive industry trends and market conditions
Benefits of Investing in Undervalued Stocks:
- Potential for higher returns on investment
- Opportunity to buy quality stocks at a discounted price
- Long-term growth potential
- Chance to outperform the market
Final Thoughts
While cheap stocks might look tempting because of their low price, it’s key to focus on finding undervalued stocks with strong growth potential. Do thorough research, look at financial data, and think about market trends to make smart investment choices. Always diversify your portfolio and get advice from a financial advisor to improve your investment strategy.
Best-performing Cheap Stocks
Finding the best cheap stocks in the market can lead to big gains with less money upfront. So, which cheap stocks have been doing well?
The table below shows some top cheap stocks in the S&P 500, Dow Jones, Nasdaq, or Russell 2000:
| Company Name | Stock Ticker |
|---|---|
| Summit Therapeutics Inc | |
| Rush Street Interactive Inc | |
| TeraWulf Inc | |
| Tango Therapeutics Inc | |
| NextNav Inc | |
| Torrid Holdings Inc | |
| Redwire Corporation |
These stocks have done well over the last year. They’re great for investors wanting big returns with less money. Always do your homework before investing, but these companies look promising.
Investing in these cheap stocks can help you grow your wealth. Always keep up with the market, spread out your investments, and talk to a financial advisor. This way, your investments will match your financial goals.
How to Find Cheap Stocks
Finding cheap stocks can lead to big profits if you do it right. To spot companies that are worth less but could grow a lot, you need to research well. Use a stock screener to find good investment chances.
Step 1: Investigate the Company and Its Management
First, check the company’s basics and its leaders. Look for a strong business model, a unique edge, and skilled leaders. A good team often means the company will do well in the future.
Step 2: Research the Industry
It’s key to know the industry when looking for cheap stocks. Study the market, competitors, and what the future holds. Find companies that are set to do well in their fields.
Step 3: Evaluate the Financials
Check the financials of stocks you’re interested in. Look for solid balance sheets, steady growth, and strong cash flow. Watch the P/E and P/S ratios to see if the stock is priced fairly.
Step 4: Follow Quarterly Reports
Keep up with a company’s progress by reading its quarterly reports. These reports show its financial health, plans, and risks. Look for signs of getting better financially.
Step 5: Utilize a Stock Screener
A stock screener helps you filter stocks by certain criteria. Set your filters for market size, P/E ratio, dividend yield, and growth forecasts. This makes finding stocks that fit your investment goals easier.
Remember, investing in cheap stocks has risks. The goal is to research well and pick stocks with strong basics, growth potential, and safety. A stock screener helps you find good stocks fast. By researching carefully and using smart strategies, you can find stocks that could grow a lot.
Choose a Stock Screener
Looking for cheap stocks? A stock screener is key in your investment plan. It filters and sorts stocks by your criteria, helping you find good investment chances.
Online brokers and financial sites offer stock screeners to help you. These platforms have big databases of stocks. You can search by market cap, P/E ratio, earnings growth, and more.
When picking a stock screener, think about these things:
- Functionality: Choose a screener with many filtering and sorting options. This lets you tailor your search to your needs.
- Usability: Go for a screener with an easy-to-use interface. It should be simple to navigate and understand.
- Data Accuracy: Make sure the screener has reliable and current data. Good data is key for smart investment choices.
- Additional Tools: Look for extra features like technical analysis tools, financial news, or educational resources to improve your research.
A good stock screener saves you time and effort by automating the search for cheap stocks. It lets you quickly narrow down your choices. Then, you can focus on analyzing stocks that fit your investment criteria.
Let’s see how a stock screener can help find cheap stocks. Say you want stocks with a market cap under $1 billion, a P/E ratio under 15, and earnings growth over 10%.
| Stock | Market Cap | P/E Ratio | Earnings Growth Rate |
|---|---|---|---|
| Company A | $500 million | 12 | 15% |
| Company B | $700 million | 10 | 12% |
| Company C | $800 million | 14 | 20% |
The stock screener found three stocks that match your criteria. You can now do more research and analysis to see if they’re right for your portfolio.
A stock screener is just one tool for your investments. Always combine its info with your own research and strategy for smart decisions.
Keep reading to learn how to set a target for future earnings growth rate and use the P/E ratio to find undervalued stocks.
Set a Target for Future Earnings Growth Rate
Setting a target for future earnings growth is key to finding good investments. By setting a goal, you have a standard to check stocks against. Start with a 10% annual growth target for the next five years. This is a good, achievable goal that helps guide your choices.
To look at more options, increase your growth target and see what’s out there. Look for companies growing at 20% or more. These can give you big returns on your money.
The Importance of Targeting Growth
Having a growth target helps you focus on stocks that could bring big returns. When a company grows faster than expected, it builds trust with investors and can make the stock value go up.
But, don’t forget to think about industry trends and market conditions too. Focusing on growth is a smart way to find stocks that meet your financial goals and how much risk you can take.
Tracking and Evaluating Stocks
You can track and check stocks by using online resources and tools. Websites for financial news and stock analysis platforms give insights into a company’s growth potential.
Keep an eye on stocks and see how they match up with your growth target. Also, look at revenue growth, profit margins, and competitive advantages to understand a stock’s true potential.
Aligning Your Investments with Future Growth
Investing in companies with strong growth potential can lead to big returns. Do your homework and find stocks that have a history of steady growth and can likely keep growing.
By setting a growth target and looking at other important factors, you can make smart investment choices. This helps you meet your financial goals and time frame.
| Key Points | Benefits |
|---|---|
| Set a target for future earnings growth rate. | Allows you to focus on high-growth companies. |
| Start with a realistic target of around 10% annual growth. | Provides a benchmark for evaluating stocks. |
| Gradually increase your target to explore more options. | Identifies companies with significant growth potential. |
| Monitor and evaluate stocks against your target growth rate. | Enables informed investment decisions. |
| Consider other fundamental indicators for comprehensive analysis. | Assesses a stock’s overall potential. |
| Invest in companies aligned with future growth prospects. | Potential for substantial returns. |
Use the P/E Ratio to Find Undervalued Stocks
Finding undervalued stocks can lead to big gains over time. The price-earnings ratio, or P/E ratio, is a key tool for this. It shows how much investors pay for each dollar of earnings. This ratio compares a company’s stock price to its earnings per share.
A low P/E ratio means a stock is cheaper than its earnings suggest. By spotting these stocks, investors can find great deals.
To find these deals, compare a company’s P/E ratio to its peers. This helps you see if the stock is cheaper than similar companies.
Identifying Undervalued Stocks Using the P/E Ratio
Here’s how to find undervalued stocks with the P/E ratio:
- Research the company and its industry.
- Identify the company’s P/E ratio.
- Compare the P/E ratio to the industry average.
- Look for stocks with a significantly lower P/E ratio than their peers.
This method helps you find stocks that could grow a lot in the future.
Let’s look at an example:
XYZ Corp is in the tech sector with a P/E ratio of 12, lower than the 20 average. This means XYZ Corp’s stock is a good deal. Investors looking for bargains might want to check out XYZ Corp.
But remember, the P/E ratio isn’t the only thing to consider. Look at other factors too to get a full picture of a company’s value.
Watching the P/E ratio can lead you to undervalued stocks with growth potential. Always do your homework and think about other things before investing. Using the P/E ratio can help you find stocks that meet your financial goals.
Focus on Market Cap to Screen out Risky Companies
When investing in stocks, looking at a company’s market capitalization (market cap) is key. Market cap is the total value of all a company’s shares. It’s found by multiplying the stock price by the number of shares. This helps investors pick safer companies and make better choices.
Smaller companies often have less stability and are more volatile. They usually have fewer shares and are harder to buy or sell. Bigger companies are seen as more stable and safe for investors.
When researching stocks, setting a minimum market cap helps filter out risky options. The right market cap threshold depends on how much risk you can handle. Some like mid-cap or large-cap companies for their stability. Others might choose smaller companies for their growth potential.
Looking at a company’s market cap gives insights into its financial health and risk level. But remember, it’s not the only thing to consider. Earnings growth, industry trends, and valuation are also important.
Here is a breakdown of market cap categories:
| Market Cap | Category |
|---|---|
| Micro-Cap | Below $300 million |
| Small-Cap | $300 million – $2 billion |
| Mid-Cap | $2 billion – $10 billion |
| Large-Cap | Above $10 billion |
It’s crucial to look at a company’s market cap in its industry context. A $10 billion market cap might be big in some fields but small in others. Comparing it to similar companies helps understand if it’s right for the industry.
Investors should think about their goals, time frame, and risk comfort when picking a market cap. Smaller companies might grow faster but are riskier. Larger companies offer stability but may not grow as much.
By looking closely at market cap, investors can avoid risky companies and find good investment chances. Always do your homework and consider many factors before investing.
Alternatives to Buying Cheap Stocks
If you want to make your investment portfolio more diverse, think about fractional shares. These let you invest a set amount of money in a stock, not just a whole share.
This is great for investors who can’t afford full shares of expensive stocks. With fractional shares, you can spread your money across different companies and industries. This can lower your risk and maybe increase your earnings.
To get into fractional shares, check if your brokerage offers them. Many online brokerages let you trade fractional shares. This means you can own a part of top-quality stocks without paying for a full share.
There are other ways to invest too. Consider exchange-traded funds (ETFs). They mix together stocks, bonds, or other assets to give you diversification in one investment.
Benefits of Investing in Fractional Shares
Here are the perks of fractional shares:
- Accessibility: They let investors get into the stock market with less money, opening it up to more people.
- Diversification: You can spread your money across many companies and industries with fractional shares.
- Flexibility: You can invest a certain amount of money, not just buy full shares.
Looking into alternatives like fractional shares can open up new investment chances for you. Always talk to a financial advisor or research well before investing to make sure it fits your financial goals and how much risk you can handle.
| Alternative | Description |
|---|---|
| Exchange-Traded Funds (ETFs) | ETFs offer diversification by pooling together multiple stocks, bonds, or other assets in a single investment. |
| Index Funds | Index funds replicate the performance of a specific market index, providing broad market exposure. |
| Real Estate Investment Trusts (REITs) | REITs allow investors to access the real estate market without the need to directly own physical properties. |
| Mutual Funds | Mutual funds pool money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities. |
Best Cheap Stocks of July 2024
Are you searching for the top cheap stocks of July 2024 to boost your portfolio? You’ve come to the right spot. We’ll share ten top picks that have done well and fit your investment needs.
Investing in cheap stocks can help you earn more while spending less. These stocks don’t always mean low-quality companies. Many have big growth potential and can bring in big profits for investors.
Now, let’s look at the best cheap stocks for July 2024:
- ExlService Holdings, Inc.
- O’Reilly Automotive, Inc.
- MSCI Inc.
- Inter Parfums, Inc.
- Kinsale Capital Group, Inc.
- The Bancorp, Inc.
- Super Micro Computer, Inc.
- NICE LTD
- Globant S.A.
- Paycom Software, Inc.
Key Takeaways:
- Find the best cheap stocks of July 2024 to grow your portfolio.
- Cheap stocks can lead to high returns and growth chances.
- Investing in cheap stocks needs careful research and analysis.
- Make your portfolio stronger by adding cheap and high-value stocks.
- Keep up with market trends and company news for smart investment choices.
Now you know the best cheap stocks for July 2024, it’s time to act. Don’t miss out on these investment chances. Stay tuned for more valuable tips in the next sections!
How to Find Cheap Stocks
If you want to invest in stocks but have a small budget, finding cheap stocks is a smart move. By spotting companies that are undervalued, you could see big returns as they grow. We’ll show you the best ways to find these cheap stocks that could increase in value.
Utilize a Stock Screener
A stock screener is a great tool for finding cheap stocks. It lets you filter stocks by things like price, earnings, and growth. By setting your criteria, you can focus on stocks that fit your investment goals.
When using a stock screener, look at these valuation metrics:
- Price-to-Earnings (P/E) Ratio: This shows if a stock is priced too low compared to its earnings.
- Price-to-Sales (P/S) Ratio: This ratio tells you if a stock is cheap compared to its sales.
- Price-to-Book (P/B) Ratio: This compares the stock price to its book value, showing if it’s undervalued.
With a stock screener, set criteria like steady earnings growth and a fair price. This helps you find stocks that are cheap but have a lot of potential.
“The stock market is filled with individuals who know the price of everything, but the value of nothing.” – Philip Fisher
Criteria to Find the Best Cheap Stocks
| Criteria | Explanation |
|---|---|
| Sustained Average Annual EPS Growth | Look for companies with steady earnings growth over time. This shows they can keep making profits. |
| Sustained Average Annual Revenue Growth | Companies with steady revenue growth are likely to stay competitive. |
| Sustained Year-over-Year EPS Gains | Find companies that keep raising their earnings each year. This shows they’re profitable and could grow more. |
| Positive Forward EPS Estimates Growth | Choose companies with expected earnings growth. This means experts think they’ll do well in the future. |
| Recent Price Drop | Look for stocks that have fallen in price recently. This could be a chance to buy at a lower cost. |
| Fair Valuation | Make sure the stock’s price is reasonable compared to its earnings and market conditions. |
Using these criteria, you can find cheap stocks with strong growth potential. This could lead to long-term success in your investments.
Now you know how to find cheap stocks, the next section will give you a list of the best ones to consider for your portfolio.
Criteria to Find the Best Cheap Stocks
When looking for cheap stocks to invest in, there are key factors to keep in mind. These factors help you find stocks that could grow a lot in value. Here are the main criteria to help you:
- Sustained Average Annual EPS Growth: Search for stocks with steady growth in earnings per share (EPS) over time. This shows a strong financial health and potential for more profits.
- Sustained Average Annual Revenue Growth: Companies with steady revenue growth usually have an advantage in their field. This helps them succeed over time and increase their stock value.
- Sustained Year-over-Year EPS Gains: Look for stocks that have consistently increased their EPS from year to year. This means the company is making more money, which could lead to higher stock prices.
- No Negative Earnings in the Last Four Years: Stay away from stocks that have had negative earnings in the last four years. This can mean the company is unstable and its stock value might drop.
- Sustained Growth in Forward EPS Estimates: Choose stocks with positive forward EPS estimates. This shows analysts think the company’s earnings will go up, which is good for the stock’s future.
- Recent Price Drop: Find stocks that have fallen in price recently. This could be a chance to buy at a lower price before the stock price goes back up.
- Fair Valuation: Pick stocks that are priced fairly based on their value. This means you’re not paying too much and could see the stock’s value increase later.
By looking at these criteria, you can find cheap stocks that might give big returns over time.
Best Cheap Stocks to Buy
Looking for the best cheap stocks to buy? Look no further. These stocks are affordable, have growth potential, and strong financials. They are great options for smart investors.
1. Alight (ALIT)
Market Value: $4.3 billion
Forward P/E Ratio: 12.8
Alight is a promising company with strong financials. It has a market value of $4.3 billion and a forward P/E ratio of 12.8. This makes it a good value. The company has shown steady earnings growth, making it a solid choice for investors.
For more info on Alight, check out this NerdWallet article on finding cheap stocks.
2. Amcor (AMCR)
Market Value: $14.2 billion
Forward P/E Ratio: 13.9
Amcor is a well-known company with a market value of $14.2 billion. It has a forward P/E ratio of 13.9, showing it’s undervalued. The company has consistently grown its earnings, making it a stable investment.
Learn more about Amcor’s potential in this Kiplinger article.
3. Arcadium Lithium (ALTM)
Market Value: $822.2 million
Forward P/E Ratio: 18.8
Arcadium Lithium is a smaller company with a market value of $822.2 million. It focuses on lithium, a key component in renewable energy. The company has a forward P/E ratio of 18.8, suggesting growth potential. It has shown steady sales growth, making it a promising investment.
Forbes offers insights on investing in cheap stocks, including Arcadium Lithium, in their investing guide.
4. Kosmos Energy (KOS)
Market Value: $2.9 billion
Forward P/E Ratio: 5.8
Kosmos Energy is a key player in the energy sector, with a market value of $2.9 billion. Its forward P/E ratio of 5.8 makes it an attractive investment. The company has consistently earned profits, showing its financial strength.
Learn more about Kosmos Energy and other cheap stocks to buy in this NerdWallet article.
5. Valley National Bancorp (VLY)
Market Value: $3.7 billion
Forward P/E Ratio: 7.9
Valley National Bancorp is a reliable bank with a market value of $3.7 billion. Its forward P/E ratio of 7.9 suggests growth potential. The company has a solid financial rating and a history of positive earnings, making it a secure investment.
Discover more about Valley National Bancorp and other cheap stocks in this Kiplinger article.
When investing in cheap stocks, do thorough research and consider your risk tolerance and goals. The market changes, so stay informed and make smart choices.
Take Advantage of Promotions and Discounts
Many brokerages offer promotions to attract investors. These can include getting a free stock after linking your bank account or $0 equity trades. This makes investing in cheap stocks more affordable.
| Brokerage | Promotion | Fees | Account Minimums |
|---|---|---|---|
| Brokerage 1 | Receive one free stock | $0 per trade | $0 |
| Brokerage 2 | Link your bank account for a free stock | $0 per trade | $0 |
| Brokerage 3 | Get a free stock when you sign up | $0 per trade | $0 |
These promotions can add value and reduce costs, making cheap stocks even more appealing.
Note: The data provided is current as of July 1, 2024, and is for informational purposes only. Always consult with a financial advisor before investing.
Why Buy Cheap Stocks?
Investing in stocks is a great way to grow your wealth and secure your future. But, some stocks can be too expensive, especially for those with a tight budget. Cheap stocks offer a chance for investors to get into the market without spending a lot.
Why should you consider buying cheap stocks? They are affordable. Penny stocks or small-cap stocks are priced under $5 per share. This means you can buy more shares with the same money you would spend on pricier stocks.
Buying cheap stocks also means you could see big gains. These stocks can be risky but can also grow quickly. This could lead to big profits for those who pick wisely.
But, buying cheap stocks needs careful thought and research. Look into the company’s finances, the industry, and the risks. Knowing the stock’s basics and the market is key to making a smart choice.
It’s also important to diversify when buying cheap stocks. Don’t put all your money into one stock. Spread it out among several to reduce risk. This can help protect your investment and increase the chance of making money.
So, why buy cheap stocks? They offer a chance for affordable investing and big returns. With the right research, analysis, and spreading your investments, cheap stocks can be a good starting point for those with limited funds.
| Advantages of Buying Cheap Stocks | Risks of Buying Cheap Stocks |
|---|---|
|
|
Conclusion
Investing in cheap stocks can help you grow your portfolio with little money. Using a stock screener helps you pick stocks that are underpriced but could do well.
When picking cheap stocks, think about what you want to achieve and how much risk you can take. Do your homework to find stocks with strong financials, growing earnings, and a good market size.
But remember, cheap stocks come with risks. These companies might struggle or have uncertain futures. Always look at the company’s basics, its leaders, and market trends before investing.
In the end, with the right strategy and careful thought, cheap stocks can be a smart choice. They can help you build a portfolio that values quality over price. Always invest wisely and consider getting advice from experts if you need to.
FAQ
What are cheap stocks?
Cheap stocks have a low share price. But, the price might not show the company’s true value.
What are undervalued stocks?
Undervalued stocks have strong financials but are priced too low. They offer great value for their price.
What are the best-performing cheap stocks?
Top cheap stocks include Summit Therapeutics Inc, Rush Street Interactive Inc, and TeraWulf Inc. Tango Therapeutics Inc, NextNav Inc, Torrid Holdings Inc, and Redwire Corporation are also on the list. These stocks have done well over the past year.
How can I find cheap stocks?
Use a stock screener to find cheap stocks. Research the company and its management, and analyze the industry and finances. Also, keep an eye on quarterly reports.
How do I choose a stock screener?
Pick a stock screener from online brokers or financial sites. These tools let you set criteria to filter stocks by your preferences.
What is the target for future earnings growth rate?
Aim for earnings growth of about 10% a year for the next five years. You can look for stocks with even higher growth rates, like 20% or more.
How can the P/E ratio help me find undervalued stocks?
The P/E ratio shows a stock’s value. A low P/E ratio means the company is cheaper. Look for stocks with a low P/E compared to peers to find good deals.
Why should I focus on market cap when screening for cheap stocks?
Market cap helps you avoid risky stocks. Smaller companies are riskier, while bigger ones are more stable. Set a minimum market cap to find stocks that fit your risk level.
Are there alternatives to buying cheap stocks?
Yes, consider fractional shares as an alternative. They let you invest a small amount in a stock. Check with your broker to see if they offer fractional shares.
What are the best cheap stocks of July 2024?
Top cheap stocks for July 2024 include ExlService Holdings, Inc., and O’Reilly Automotive, Inc. MSCI Inc., Inter Parfums, Inc., and Kinsale Capital Group, Inc. are also on the list. The Bancorp, Inc., Super Micro Computer, Inc., NICE LTD, Globant S.A., and Paycom Software, Inc. have shown strong performance too.
How can I find the best cheap stocks?
Use a stock screener with criteria like sustained earnings growth and revenue growth. Look for stocks with positive earnings estimates and fair valuations.
Why should I consider buying cheap stocks?
Cheap stocks offer a chance to invest with a small budget. They can lead to big gains quickly. But, always research and consider the risks before investing.