11 Best Cheap Stocks to Buy in Sep 2023

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 11 of the best cheap stocks to buy now based on a proven set of fundamental metrics and due diligence checks.

Methodology for Finding the Best Cheap Stocks

To find the 11 best cheap stocks to buy in September 2023, I used one of WallStreetZen’s preset stock screeners, Best Undervalued Stocks to Buy Now.

It incorporates a minimum Zen Score 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.

Note: Our Zen Score is based on a set of 38 due diligence and fundamental checks that are proven to uncover high-quality stocks that are primed for growth.

Let’s dive in…

What are the Best Cheap Stocks to Buy Now?

According to research, here are some of the potential cheap best stocks to buy now.

1. Shore Bancshares Inc (NASDAQ: SHBI)

Sector: Financial Services

Current Price: $10.80

YTD Change: -38%

P/E Ratio: 6.88x

First on our list of the best cheap stocks to buy now? Shore Bancshares Inc (NASDAQ: SHBI). This holding company offers a bunch of different commercial and consumer banking products and services to people, businesses, and organizations.

The company features 29+ full-service branches across the mid-Atlantic region.

Looking at the price, SHBI is coming into a short-term monthly support level with additional long-term support not much lower. Aggressive investors may look to accumulate around $9.00 whereas a more conservative entry is around $6.00.

Highlights of the stock include:

• An above-average Zen Score (57) compared to the regional banking industry (40).
• It’s trading below its intrinsic value of $14.23 based on Benjamin Graham’s Intelligent Investor formula.
• It’s undervalued by 20.55% based on Discounted Cash Flow modeling, which includes a healthy margin of safety.

Overall, the company is considered particularly attractive from a valuation perspective.

2. Alpha & Omega Semiconductor Ltd (NASDAQ: AOSL)

Sector: Information Technology

Current Price: $24.07

YTD Change: -18%

P/E Ratio: 25.07x

Alpha & Omega Semiconductor Ltd (NASDAQ: AOSL) is a California-based company that was incorporated in 2000. It designs, develops, and supplies power semiconductor products that are used for computing, consumer electronics, communication, and myriad industrial applications.

AOSL is currently showing price rejection from a short-term support level which is a positive sign.

Aggressive investors may consider accumulating stock after more consolidation while a more conservative approach would be waiting for the price to reach long-term support.

Highlights of the stock include:

• An above-average Zen Score (62) compared to the semiconductor industry (42).
• It’s trading well below its intrinsic value of $82.61 based on Benjamin Graham’s Intelligent Investor formula.
• It’s undervalued by 27.2% based on Discounted Cash Flow modeling, which includes a healthy margin of safety.

While its recent performance has been slower than the industry average, it’s valuation and financials are solid.

3. Insignia Systems Inc (NASDAQ: ISIG)

Sector: Communication Services

Current Price: $8.45

YTD Change: 0%

P/E Ratio: 1.31x

Insignia Systems Inc (NASDAQ: ISIG) is a Minnesota-based company established in 1990.

Their specialty? Advertising solutions for retailers, packaged-good manufacturers, brokerages, and more.

Insignia creates in-store signage, merchandising solutions, and on-pack solutions, which feature BoxTalk, coupons, recipes, and cross-promotions.

Besides its stellar fundamentals, ISIGs price position is extremely attractive. Its long-term support zone has held strong since 1992, meaning accumulation anywhere under $8.00 gives you an excellent reward-to-risk ratio.

Highlights of the stock include:

• A significantly higher Zen Score (60) compared to the advertising industry (32).
• It’s trading significantly below its intrinsic value of $192.17 based on Benjamin Graham’s Intelligent Investor formula.
• It’s undervalued by 48.74% based on Discounted Cash Flow modeling, which includes a healthy margin of safety.
• An extremely attractive P/E ratio of 1.31x.

Overall, ISIGs valuation, financials, and recent performance are solid and its Zen score would likely be higher if there were enough data for an analyst forecast.

4. Voyager Therapeutics Inc (NASDAQ: VYGR)

Sector: Healthcare

Current Price: $10.44

YTD Change: +73%

P/E Ratio: 4.37x

Voyager Therapeutics Inc (NASDAQ: VYGR) is a gene therapy company.

What does that mean? They develop treatments and platform technologies.

Their lead candidate? VY-AADC, which is currently in a Phase 1 clinical trial for Parkinson’s disease. They also have preclinical programs for several common diseases.

They also have big-name agreements with the likes of Neurocrine Biosciences, Pfizer, and Novartis Pharma for the research, development, and commercialization of adeno-associated virus gene therapy products.

VYGR has recently reclaimed its long-term support level after a couple of uncertain years. Conservative investors may wait for a re-test of the highs above $10.00 before opening a position while aggressive investors would be happy to start now.

Highlights of the stock include:

• A significantly higher Zen Score (60) compared to the biotechnology industry (27).
• It’s trading well below its intrinsic value of $46.72 based on Benjamin Graham’s Intelligent Investor formula.
• It’s undervalued by 19.82% based on Discounted Cash Flow modeling, which doesn’t include a healthy margin of safety.

VYGR presents an attractive opportunity based on its valuation, financials, and recent performance. But one thing to keep in mind is its poor revenue forecasts.

5. U S Global Investors Inc (NASDAQ: GROW)

Sector: Financial Services

Current Price: $2.88

YTD Change: 0%

P/E Ratio: 13.09x

U S Global Investors Inc (NASDAQ: GROW) is a Texas-based investment manager founded in 1968.

Here’s how it works: the firm invests in the global public equity and fixed-income markets using a G.A.R.P. and value-based strategy while also employing fundamental and quantitative analysis. Exciting, right?

After pulling back from a price climax, GROW has reached the top of its long-term support range. This marks a point where aggressive investors can start accumulating while a conservative approach is to slowly buy as it continues its decline.

Highlights of the stock include:

• A significantly higher Zen Score (60) compared to the asset management industry (30).
• It’s trading below its intrinsic value of $4.23 based on Benjamin Graham’s Intelligent Investor formula.
• It’s undervalued by 35.1% based on Discounted Cash Flow modeling, which includes a healthy margin of safety.

Overall, GROW has strong potential for future gains thanks to its excellent performance across our due diligence checks. It would likely score even higher if there was enough data for analyst forecasts.

6. Bcb Bancorp Inc (NASDAQ: BCBP)

Sector: Financial Services

Current Price: $10.08

YTD Change: -44%

P/E Ratio: 3.97x

Bcb Bancorp Inc (NASDAQ: BCBP) is a bank holding company for BCB Community Bank.

The company offers all sorts of banking goodies: savings accounts, certificates of deposit, commercial and residential mortgages, and more.

They service thousands of consumers across 30+ branches in New Jersey and New York.

After a strong run to all-time highs, BCBP has been in a dramatic decline. While its fundamentals are strong, aggressive investors may only consider buying once it reaches support. But a conservative strategy is to wait for price rejection or a consolidation around $8.50.

Highlights of the stock include:

• An above-average Zen Score (52) compared to the regional banking industry (40).
• It’s trading well below its intrinsic value of $32.69 based on Benjamin Graham’s Intelligent Investor formula.
• It’s undervalued by a significant 56.9% based on Discounted Cash Flow modeling, which includes a healthy margin of safety.
• An attractive P/E ratio of 3.97x.

Overall, BCBP scores highly for its valuation and dividends (which is in the top 75% of all US-listed companies) but debt increases and poor recent growth are something to bear in mind.

7. SLM Corp (NASDAQ: SLM)

Sector: Financial Services

Current Price: $15.44

YTD Change: -6.6%

P/E Ratio: 8.54x

SLM Corp (NASDAQ: SLM) is a financial services company founded in 1972 and based in Newark, DE. It specializes in originating and servicing private education loans.

In addition, they also offer retail deposit accounts and credit card loans. They also work with students to provide financial aid, federal loans, and other resources.

SLM is another stock that’s been beaten down after an impressive bull run. While its price is rejecting from the level, aggressive investors would prefer to see further downside towards $10.00. But conservative investors may look to accumulate under $8.00 – $9.00.

Highlights of the stock include:

• An above-average Zen Score (50) compared to the credit services industry (31).
• It’s trading well below its intrinsic value of $42.32 based on Benjamin Graham’s Intelligent Investor formula.
• It’s undervalued by a significant 55.26% based on Discounted Cash Flow modeling, which includes a healthy margin of safety.

8. First Business Financial Services Inc (NASDAQ: FBIZ)

Sector: Financial

Current Price: $25.24

YTD Change: -31%

P/E Ratio: 5.29x

First Business Financial Services Inc (NASDAQ: FBIZ) is a holding company for First Business Bank.

The bank, which has been operating since 1909, offers a spread of commercial banking products and services for anyone from small businesses to high -net-worth individuals. These services include investment management, financing, and much more.

After making a new all-time high, FBIZ has pulled back to short-term support. Aggressive approaches may look to start accumulating now due to the length of the support zone. However, conservative investors may wait for the price to reach as low as $20.00 before buying.

Highlights of the stock include:

• An above-average Zen Score (54) compared to the regional banking industry (39).
• It’s trading well below its intrinsic value of $64.13 based on Benjamin Graham’s Intelligent Investor formula.
• It’s undervalued by a notable 47.49% based on Discounted Cash Flow modeling, which includes a healthy margin of safety.

Overall, FBIZ scores highly for its valuation, divided, and above =-average recent performance. However, one concern is a recent increase in its debt-to-equity ratio.

9. Gulf Resources Inc (NASDAQ: GURE)

Sector: Materials

Current Price: $2.95

YTD Change: -8.4%

P/E Ratio: 3.07x

Gulf Resources Inc (NASDAQ: GURE) is a Chinese company that manufactures and trades chemical products such as bromine, crude salt, and natural gas.

Why should you care?

These materials are used across many industries from water purification and medicine to food and beverage. The company also produces chemical products for use in oil and gas exploration, drilling, and papermaking, as well as materials for human and animal antibiotics.

GURE is smack-bang in the middle of its long-term support zone dating back to the early 2000s. While the support zone is quite large, spanning roughly $13.00, the price has retraced enough for both aggressive and conservative investors to accumulate GURE.

Highlights of the stock include:

• An above-average Zen Score (59) compared to the specialty chemicals industry (39).
• It’s trading significantly below its intrinsic value of $158.99 based on Benjamin Graham’s Intelligent Investor formula.
• It’s undervalued by a staggering 79% based on Discounted Cash Flow modeling, which includes a healthy margin of safety.

10. First National Corp (NASDAQ: FXNC)

Sector: Financial Services

Current Price: $14.66

YTD Change: -15%

P/E Ratio: 5.45x

First National Corp (NASDAQ: FXNC) is a bank holding company that’s been around for over 100 years.

Its subsidiary, First Bank, offers commercial banking services to a variety of customers from individuals to businesses and government organizations.

Many of its loans focus on real estate development and are well-diversified between residential, commercial, and non-profit buildings.

The regional bank boasts 20 branches alongside dedicated loan and customer service centers.

FXNC is in the process of a second test of short-term support. Judging by the fact that the previous rejection didn’t result in a test of the highs at $24.00, there may be further downside to come.

Aggressive investors will want to see a longer consolidation at current support while a more careful approach would accumulate around $10.00 or below.

Highlights of the stock include:

• An above-average Zen Score (55) compared to the regional banking industry (40).
• It has an intrinsic value of $27.27 based on Benjamin Graham’s Intelligent Investor formula.
• It’s well undervalued by 42.12% based on Discounted Cash Flow modeling, which includes a healthy margin of safety.

While FXNC scores highly across valuation and dividend metrics, you should pay attention to its slower-than-average growth and inefficient return on equity.

11. CapStar Financial Holdings Inc (NASDAQ: CSTR)

Sector: Financial Services

Current Price: $12.13

YTD Change: -32%

P/E Ratio: 7.79x

CapStar Financial Holdings Inc (NASDAQ: CSTR) is a holding company that operates through CapStar Bank.

Primarily operating in Tennessee, CapStar Bank offers all the typical banking services from savings accounts to commercial loans.

Interestingly, CapStar also offers correspondent banking services to local banks, meaning they also hold other banks’ money. This gives them an extra layer of diversification and customer demand.

After a recent test of all-time highs, CapStar is right on the edge of its long-term support. While there has been a solid rejection from the level, more consolidation is needed for investors to become interested.

Another factor to consider is that the support level has never been tested, so it’s wise to proceed with caution.

Highlights of the stock include:

• An above-average Zen Score (50) compared to the regional banking industry (40).
• It has an intrinsic value of $24.33 based on Benjamin Graham’s Intelligent Investor formula.
• It’s undervalued by 32.51% based on Discounted Cash Flow modeling, which includes a healthy margin of safety.

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.

Summary: Cheap Best Stocks to Buy Now

In this list, we covered 11 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, it’s essential that they’re 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.

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