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Investors often seek opportunities in low-cost, high-growth stocks as a strategy to maximize returns while minimizing upfront investment. These cheap stocks are hidden gems with substantial growth potential; they are often sought by those looking for opportunities in the financial market.

In a dynamic market environment, identifying such stocks requires a keen understanding of industry trends, financial health, and the potential for disruptive technologies. This exploration into low-cost, high-growth cheap stocks unveils companies that possess the potential to leave a significant mark on the market despite their modest valuations.

Things to Consider To Buy Low-Cost And High-Growth Cheap Stocks

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Identifying low-cost, high-growth stocks requires thorough research and analysis, and it's important to note that investing always involves risk. Stock prices can be volatile, and there are no guarantees of future returns. That said, here are some general guidelines for identifying potentially promising stocks:

  • Earnings Growth: Look for companies with a track record of consistent earnings growth. Companies that are expanding their profits are often considered good investment opportunities.
  • Low Price-to-Earnings (P/E) Ratio: The P/E ratio is the ratio of a company's stock price to its earnings per share. A lower P/E ratio can indicate that a stock is undervalued relative to its earnings potential. However, it's essential to compare P/E ratios within the same industry.
  • Strong Fundamentals: Analyze a company's fundamentals, including revenue growth, profit margins, and return on equity. A company with solid fundamentals is more likely to sustain growth over the long term.
  • Market Trends and Catalysts: Identify companies positioned to benefit from current and future market trends. Look for companies with products or services that are in high demand or are likely to experience increased demand in the future.
  • Dividend Growth: While high-growth stocks may not always pay dividends, some companies that do offer dividends have a history of increasing payouts. This can be a sign of financial stability and confidence in future earnings.
  • Market Capitalization: Consider investing in smaller-cap stocks as they may have more room for growth compared to larger, well-established companies. However, smaller companies can be riskier, so thorough research is crucial.

Here is the list of cheap stocks with higher growth potential:

Plug Power Inc. (PLUG)

Source : nasdaq

Plug Power Inc. (PLUG) has emerged as a leader in the hydrogen fuel cell industry, providing clean, sustainable solutions for various applications, from forklifts in warehouses to backup power for data centers.

While its stock price has experienced significant fluctuations, its long-term growth potential and current valuation suggest it could be an attractive option for investors seeking exposure to the burgeoning clean energy sector. It offers a potentially lower entry point for long-term investors.

  • 52 Week Range: 3.2200 - 18.8800

Nokia Corporation (NOK)

Source : nasdaq

The once-dominant mobile phone king has faded from the limelight in recent years. Nokia's stock has historically been priced at levels that some investors might consider affordable or low-cost. This affordability can attract investors looking for opportunities with growth potential at a lower entry point.

Nokia boasts a healthy balance sheet with low debt and strong cash flow, providing a financial cushion for future growth initiatives. The company's involvement in 5G technology has positioned it as a player in the growing and evolving telecommunications sector.

  • 52 Week Range: 2.9400 - 4.9700

Canopy Growth Corporation (CGC)

Source : nasdaq

Searching for cheap stocks to buy now? You can invest in CGC.  Raising $30 million through a private placement demonstrates investor confidence despite market volatility.

CGC remains a leading player in the global cannabis market, boasting extensive production facilities, established brands, and a strong international presence. The cannabis industry has shown significant growth potential, driven by increasing legalization and acceptance of cannabis for both medical and recreational use in various regions.

  • 52 Week Range: 3.4600 - 32.2000

Zoom Video Comms (ZM)

Source : nasdaq

One of the best cheap stocks to buy is ZM. Zoom Video Communications, Inc. (ZM) has been recognized as a prominent player in the video conferencing and communication technology space.

Zoom experienced exponential revenue growth during the pandemic, driven by increased demand for its services. The long-term success of Zoom depends on its ability to adapt to evolving market trends, compete effectively, and address user concerns

  • 52 Week Range: 58.87 - 85.13

The Bancorp, Inc. (TBBK)

Source : nasdaq

TBBK has been identified as a potential low-cost, high-growth cheap stock by some analysts, due to its strong financial performance, attractive valuation, and growth prospects.

The Bancorp, Inc. is a financial holding company that provides various banking and financial services through its subsidiary, The Bancorp Bank. The company has a long track record of profitability and efficiency. The company has consistently generated positive net income and earnings per share (EPS) growth.

  • 52 Week Range: 25.13 - 42.46

The Toro Company (TTC)

Source : nasdaq

Founded in 1914, Toro has a long history of innovation and quality products. Analysts expect TTC to grow its earnings per share (EPS) by 10.5% next year and at a similar rate over the next five years.

TTC's stock price has been down in 2023, trading below its 52-week high. This means that the stock is currently trading at a relatively low price compared to its future earnings potential.

  • 52 Week Range: 78.35 - 117.17

Baytex Energy Corp. (BTE)

Source : nasdaq

Baytex Energy Corp. (BTE) might just fit the bill for investors seeking a combination of affordability and growth potential. BTE has significant acreage in the Eagle Ford Shale, a prolific oil and gas play in Texas. Continued development in this area could unlock substantial value.

BTE has a history of focusing on cost discipline and operational efficiency. This is reflected in their low operating costs and strong free cash flow generation.

  • 52 Week Range: 2.8900 - 4.6600

Source : nasdaq

The EV market is expected to grow at a compound annual growth rate (CAGR) of over 25% until 2030. This growth is driven by factors such as falling battery costs, government incentives, and increasing consumer demand for clean transportation.

BLNK operates a diversified business model that includes both hardware (charging stations) and software (network management). This gives the company a strong competitive advantage and allows it to capture multiple revenue streams.

  • 52 Week Range: 2.2200 - 15.4000

Carnival Corporation & plc (CCL)

Source : nasdaq

 As the world's largest cruise operator, CCL boasts a diverse fleet catering to various price points and demographics. This breadth and brand recognition give it a competitive edge in capturing the post-pandemic travel boom.

Compared to pre-pandemic levels, CCL stock is still down significantly, trading at around $14 per share as of Monday, January 15, 2024. This translates to a price-to-earnings ratio (P/E) of around 17.7, considerably lower than the market average.

  • 52 Week Range: 8.37 - 19.74

Telefónica SA (ticker: TEF)

Source : nasdaq

TEF is one of the cheap stocks right now to invest. It is one of the largest telecommunications companies in the world by market capitalization and revenue. TEF stock has been on a tear lately, up over 20% in the past year. But is it too late to buy in?

Telefónica is well-positioned to benefit from the growing demand for mobile data and broadband services. The company is also investing heavily in fiber optic networks, which will give it a competitive advantage in the future.

  • 52 Week Range: 3.6900 - 4.5300

American Airlines Group Inc. (AAL)

Source : nasdaq

AAL is the world's second-largest airline by revenue and has quietly made a case for itself as a potential bargain in the current market. Despite its low valuation, AAL has seen its stock price surge over 30% since October 2023, making it a top performer in the S&P 500. 

AAL currently trades at a price-to-earnings (P/E) ratio of around 5.3, significantly lower than the industry average of 10.26. This means investors pay less for each dollar of AAL's earnings than its peers. 

  • 52 Week Range: 10.86 - 19.08

Teekay Corporation (TK)

Source : nasdaq

Teekay Corporation is a global shipping company engaged in the transportation of crude oil, liquefied natural gas (LNG), and refined petroleum products. Its diverse geographical presence allows the company to benefit from fluctuations in energy demand and shipping needs around the world.

The growing importance of liquefied natural gas (LNG) in the global energy mix presents an opportunity for Teekay. The company's involvement in LNG transportation positions it to benefit from the increasing demand for cleaner energy sources.

  • 52 Week Range: 9.63 - 15.42

Luminar Technologies, Inc. (LAZR)

Source : nasdaq

Lidar is a sensing technology that uses laser light to measure distances and create detailed, three-dimensional maps of the surroundings. Luminar focuses on developing lidar solutions for autonomous vehicles, which are crucial for enabling advanced driver-assistance systems (ADAS) and self-driving capabilities.

The autonomous vehicle market is expected to reach $1.3 trillion by 2030, and LiDAR is considered a key enabling technology. This presents a huge growth opportunity for Luminar.

  • 52 Week Range: 2.3000 - 10.5500

Olaplex Holdings, Inc. (OLPX)

Source : nasdaq

After tumbling from its 2021 peak, OLPX currently sits at a bargain price, making it accessible to budget-conscious investors. By cutting out middlemen, Olaplex potentially keeps costs down for both the company and consumers, implying higher profit margins.

The company has made waves in the hair care industry with its revolutionary bonding technology. It patented bonding technology addresses a specific hair repair need, setting it apart from competitors.

  • 52 Week Range: 1.3450 - 7.1000

Ford Motor Company (F)

Source : nasdaq

In the hunt for undervalued stocks with promising growth, Ford Motor Company (F) might pique your interest. F is investing heavily in future technologies like electric vehicles (EVs) and autonomous driving, implying major growth.

F trades at a lower price-to-earnings ratio (P/E) of around 7.5, implying potential for significant upside if earnings grow. It is aggressively pushing into the EV market with its Mustang Mach-E and F-150 Lightning models, targeting significant market share gains in the rapidly growing segment.

  • 52 Week Range: 9.63 - 15.42

Sirius XM Holdings Inc. (SIRI)

Source : nasdaq

While primarily known for its satellite radio dominance, the company has quietly diversified into the online streaming realm after acquiring Pandora. It is one of the cheapest dividend stocks to buy.

Sirius is trading nearly 40% below analyst fair value estimates of around $7.50. It has a dividend yield of 3.67%, providing a solid income stream while you wait for potential growth.

  • 52 Week Range: 3.32 - 7.95

Matterport Inc. (MTTR)

Source : nasdaq

Another of the cheap penny stocks to buy is MTTR. Matterport's revenue has been growing rapidly in recent years. In Q3 2022, the company reported $38 million in revenue, up 48% year-over-year.

Matterport operates in the proptech (property technology) space and is renowned for its platform that allows users to create and share immersive 3D models of physical spaces. The technology has applications in various industries, including real estate, architecture, construction, and hospitality.

  • 52 Week Range: 1.8400 - 4.0700