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5 Best Cheap Stocks to Buy in May 2024

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What are the best cheap stocks to buy right now?

Sound like something you’ve asked Google before? You’re not alone.

It can be tricky to find the best cheap stocks to buy now out of the thousands of options available if you don’t have the right tools.  

The good news is we’ve got you covered with 5 of the best cheap stocks to buy now based on a proven set of fundamental metrics and due diligence checks.

5 Best Stocks for the Rest of 2024  

In this post, we share several “cheap” stocks that have near-term potential according to analysts and our due diligence checks. But what if you’re  less focused on low-priced stocks, and more interested in building a long-term portfolio? You’ll be interested in this…

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Methodology for Finding the Best Cheap Stocks

To find the best cheap stocks to buy in May 2024, we used a combination of tools on WallStreetZen:

  1. WallStreetZen’s preset stock screeners: Notably, the Best Undervalued Stocks to Buy Now screener. It incorporates a minimum Zen Score (see #2 below) of 50 and a valuation score of 80 based on factors such as Benjamin Graham’s valuation formula, Discounted Cash Flow (DCF) valuation, and various price ratios, such as price-to-earnings and price-to-book.
  2. Zen Score. WSZ’s Zen Score is a quick, easy-to-read score based on 38 due diligence checks. You can also evaluate the score breakdown, which gives you a quick “pulse check” on various areas of the company’s fundamentals and prospects. It also compares the scores to industry averages. The Zen Score is a great tool to help give you focus during the all-important research phase.
  3. Strong Buy Ratings from Top Analysts. With WSZ’s Strong Buys from Top Analysts feature, you can zero in on ratings from ONLY top-rated analysts, and you have easy access to their track record and average win rate. In each entry, you can easily see the analyst’s track record, plus the “why” behind their rating.

Let’s dive in…

What are the Best Cheap Stocks to Buy Now?

Here are some of the potential best cheap stocks to buy now.

Note: This article does not provide investment advice. The stocks listed should not be taken as recommendations. Your investments are solely your decisions.

1. Deluxe Corp. (NYSE: DLX

Analyst consensus: STRONG BUY 

Last market close: $22.51 (5/22/24)

Average 1-year forecast: $31.00 

Why it’s watchlist-worthy: 

  • Accelerating revenue: DLX’s revenues are forecast to grow faster (-0.69% per year) than the USAdvertising Agencies industry average (-5.45%).
  • Favorable dividends: DLX dividends (5.16%) are in the top 75% of all US listed companies; DLX’s dividend has not dropped by more than 10% at any point in the last 10 years. 
  • Analysts are optimistic: TD Cowen’s Lance Vitanza raised their price target on Deluxe Corp. by 6.1% from $33 to $35 on 5/14, following the company’s  Q1 2024 earnings. Vitanza told readers that TD Cowen updated its model in response to the “strong” print, moving estimates “modestly” higher in recognition of management’s favorable guidance and because their firm “believes additional beats over the balance of the year are more likely than not.”
DLX 1-year chart, courtesy TradingView

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2. Grab Holdings Ltd. (NASDAQ: GRAB)

Analyst consensus: STRONG BUY 

Last market close: $3.70 (5/22/24)

Average 1-year forecast: $4.70

Why it’s watchlist-worthy: 

  • It may be a good value. According to WSZ due diligence checks, GRAB is good value based on its book value relative to its share price (2.33x), compared to the US Software – Application industry average (6.56x).
  • The company is approaching profitability. GRAB’s profit margin has increased (+75%) in the last year from (-86.9%) to (-11.9%), and is approaching profitability.
  • Fantastic revenue forecasts. GRAB’s revenues are forecast to grow faster (13.34% per year) than the USSoftware – Application industry average (12.67%)
  • Positive analyst coverage. Jiong Shao of Barclays recently rated GRAB a Strong Buy, noting that Grab Holdings delivered an outstanding quarter with solid revenue and profit that beat expectations; during their earnings call, the analyst believes management was overly cautious with its revised guidance.
GRAB 6-month chart, courtesy TradingView

3. Carnival Corp. (NYSE: CCL)

Analyst consensus: STRONG BUY 

Last market close: $15.65 (5/22/24)

Average 1-year forecast: $21.71

Why it’s watchlist-worthy: 

  • It may be a good value. According to WSZ due diligence checks, CCL ($15.65) is trading below its intrinsic value of $16.50, according to an updated version of Benjamin Graham’s Formula from Chapter 11 of “The Intelligent Investor”; CCL is good value based on its book value relative to its share price (3.07x), compared to the US Travel Services industry average (12.43x).
  • Exponential profit growth. CCL’s profit margin has increased (+34.5%) in the last year from (-32.7%) to (1.8%); moving forward, CCL’s earnings are forecast to grow at an exceptional rate of 146.22% per year.
  • Positive analyst outlook. Daniel Politzer of Wells Fargo just raised their price target on CCL following discussions with Carnival and Royal Caribbean Cruises management. The analyst predicted that 2025 could see another “above-algo” year, thanks to new hardware, private islands, and good (albeit early) booking trends.
CCL 1-month chart, courtesy TradingView

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4. OneSpaWorld Holdings (NASDAQ: OSW)

Analyst consensus: STRONG BUY 

Last market close: $15.35 (5/22/24)

Average 1-year forecast: $18.00

Why it’s watchlist-worthy:

  • Some positive signs on the financial front: Despite the fact that OSW’s profit margin has decreased (-2.7%) in the last year from (6.8%) to (4.1%), OSW’s short-term assets ($163.57M) exceed its long-term liabilities ($159.58M), and OSW’s operating cash flow ($76.14M) is sufficient to service the company’s debt ($154.52M)
  • Excellent forecasts: According to WSZ due diligence checks, OSW’s earnings are forecast to grow at an exceptional rate of 35.04% per year; OSW’s revenues are forecast to grow faster (5.69% per year) than the US Leisureindustry average (2.92%).
  • Optimistic analyst outlook: Laura Champine of Loop Capital recently maintained a Strong Buy rating and increased their price target on OSW by 6.3%, from $16 to $17. Champine attributed their price target hike to Onespaworld Holdings’ ship count growth prospects along with takeaways from recent C-suite discussions indicating that the industry remains healthy. Cruise line operators have been reporting high occupancy and limited discounting for several consecutive quarters, the analyst added.
OSW 6-month chart, courtesy TradingView

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5. Oatly Group (NASDAQ: OTLY)

Analyst consensus: BUY 

Last market close: $1.16 (5/22/24)

Average 1-year forecast: $1.27

Why it’s watchlist-worthy: 

  • It may be a good value: According to WSZ due diligence checks, OTLY is good value based on its book value relative to its share price (2.54x), compared to the US Beverages – Non-Alcoholic industry average (7.2x).
  • Exponential revenue growth: In terms of earnings, OTLY’s revenue has grown faster (86.58% per year) than the US Beverages – Non-Alcoholic industry average (10.09%); moving forward, OTLY’s revenues are forecast to grow faster (6.68% per year) than the USBeverages – Non-Alcoholic industry average (4.93%).
  • Earnings surprise: On the company’s last earnings call, they beat expectations for both EPS and revenue.

What Makes a Stock Cheap?

What makes a stock cheap depends on your perspective and investment strategy.

Some investors may consider stocks under $30 (or any other number) cheap.

On the other hand, value investors would consider undervalued stocks cheap because they’re trading at a price under their intrinsic value — like the stocks on this list. But it depends on your chosen valuation metric.

One of the hardest parts of stock market investing? Choosing the right stocks.

WallStreetZen offers one of the top stock-picking services out there.

To find these stock picks, I used one of WallStreetZen’s preset stock screeners, Best Undervalued Stocks to Buy Now. But it’s not the only tool the platform has to offer. Not by a long shot.

WallStreetZen’s Top Analysts is our most frequently visited page — here’s why:

Other stock-picking services constantly brag about their winning stock picks — but fail to mention when they’re wrong.

Instead of providing direct picks, we built a service that aggregates the research and recommendations from nearly 4,000 Wall Street analysts — then backtests their performance over multiple years.

Based on this research, analysts are ranked based on average return, frequency of ratings, and win rate — so you can rest assured you’re only following top performers.

 

Summary: Cheap Best Stocks to Buy Now

In this list, we covered 5 of the best stocks to buy now cheap based on key valuation metrics, such as Discounted Cash Flow and price-to-earnings.

But, while these are potentially good investment candidates, they must be part of a balanced portfolio.

Make sure you understand the risks you take with small and micro-cap stocks as they tend to be much more volatile than larger companies.

For that reason, their performance is less predictable, so it’s wise to spread your bets rather than concentrate them on just a few companies.  

And always remember, stocks can stay undervalued for a long time so you need an investment horizon of at least a few years. But that’s not to say that one of these stocks couldn’t surge tomorrow — anything can happen and understanding that is key!

Try out our screener to discover more of the best cheap stocks to buy right now.


FAQ:

What are the best cheap stocks to buy right now?

At writing, the best cheap stocks to buy right now include OTLY, DLX, and CCL.

Where to Invest $1,000 Right Now?

Did you know that stocks rated as "Buy" by the Top Analysts in WallStreetZen's database beat the S&P500 by 98.4% last year?

Our May report reveals the 3 "Strong Buy" stocks that market-beating analysts predict will outperform over the next year.

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About the author

Myles O'Bery

Contributor

Myles is a content writer with an unbridled passion for financial markets. While he's not writing for WallStreetZen, he's either in DeFi Discords or staring at price charts.