In this article, we will discuss the 10 Cheap Growth Stocks to Buy Now.
Growth stocks—those of companies expected to grow at an above-average rate compared to other firms—have historically exhibited cyclical performance patterns. For instance, during the 1990s dot-com era, growth stocks did well, as reported by Hartford Funds.
From 2014 to 2024, growth stocks surged ahead of other market segments, with the Russell Growth Index delivering an annualized return of 17%. This return was more than double that of value stocks (8%), small-cap stocks (8%), and international equities (5%). The broader market, which itself has been heavily influenced by large-cap tech companies, delivered a 13% annualized return. This further amplifies the performance of growth-oriented investments.
This growth-driven rally had profound effects on the composition of traditionally balanced portfolios. A standard 60/40 portfolio (60% equities, 40% bonds) that was left untouched over this period would have seen its growth stock allocation more than double from 20% to 42%, crowding out other investment segments.
As financial markets navigate a stabilizing interest rate environment and moderating inflation, investors are revisiting growth equities with renewed focus. Cheap growth stocks have reemerged as a strategic play in 2025. With the Federal Reserve pausing its tightening cycle and inflation cooling to 2.9% (down from 2022’s 9.1% peak), the macroeconomic landscape now favors selective risk-taking.
Analysts suggest that stocks with a price-to-earnings (P/E) ratio below 15x often present attractive investment opportunities. These stocks may offer a combination of growth potential, driven by strong revenue and earnings expansion, as well as resilience, enabling them to perform well even in uncertain macroeconomic conditions.
As Charlie Munger aptly said, “All intelligent investing is value investing—acquiring more than you are paying for. You must value the business in order to value the stock.” This mindset aligns perfectly with identifying companies with lower P/E ratios, where the value they offer can outweigh the price being paid. Given this, we will take a look at some of the best cheap growth stocks to invest in.
A businessman holding up a chart displaying business growth for a middle market company.
Our Methodology
To compile a list of the 10 Cheap Growth Stocks to Buy Now, we first utilized Finviz stock screener to identify US companies with a Price-to-Earnings (P/E) ratio of 15 or lower and an implied sales growth of over 20% over the last five years. From this selection, we then ranked the stocks according to their P/E ratio.
At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. VAALCO Energy Inc. (NYSE:EGY)
Price to Earnings ratio: 4.39
VAALCO Energy Inc. (NYSE:EGY) is an independent energy company engaged in the exploration, development, and production of crude oil, natural gas, and natural gas liquids across multiple regions. EGY is one of the best cheap growth stocks to invest in.
VAALCO Energy Inc. (NYSE:EGY) has strengthened its West African portfolio with the strategic acquisition of a 70% working interest and operatorship in offshore Block CI-705 in Côte d’Ivoire. The newly acquired block, spanning approximately 2,300 square kilometers in the prolific Tano Basin, is positioned near existing infrastructure and recent hydrocarbon discoveries. This enhances its development potential. The company plans to undertake comprehensive geological and geophysical studies, including seismic reprocessing, to assess the prospectivity of the asset. The company anticipates drilling up to two exploration wells as part of its long-term growth strategy.
VAALCO Energy Inc. (NYSE:EGY) delivered strong operational results in Q3 2024, with net income reaching $11.0 million and Adjusted net income of $7.9 million. The company reported net revenue interest sales of 2.13 million barrels of oil equivalent, averaging 23,198 barrels of oil equivalent per day, up 20% from Q2 2024. Adjusted EBITDAX increased 28% to $92.8 million, reflecting higher sales, while production expenses dropped 33% to $19.80 per barrel of oil equivalent, reaching the low end of guidance.
9. Civitas Resources Inc. (NYSE:CIVI)
Price to Earnings ratio: 4.20
Civitas Resources Inc. (NYSE:CIVI) is an independent oil and gas producer focused on developing its assets in the Denver-Julesburg (DJ) and Permian Basins.
Civitas Resources Inc. (NYSE:CIVI), one of the best cheap growth stocks, has updated its 2025 outlook with a focus on maximizing free cash flow and reducing debt. As part of this strategy, the company completed a $300 million bolt-on acquisition in the Permian Basin, adding 19,000 net acres and approximately 130 future drilling locations. In parallel, Civitas announced a 10% workforce reduction to streamline operations and enhance its low-cost structure.
For the full year of 2024, Civitas Resources Inc. (NYSE:CIVI) reported $839 million in net income and $3.65 billion in adjusted EBITDAX, reflecting solid financial performance. The company generated $2.87 billion in operating cash flow and $1.27 billion in free cash flow, supporting $920 million in shareholder returns through dividends and share repurchases. Average production reached 345,000 barrels of oil equivalent per day, while capital expenditures totaled $1.93 billion.
Neal Dingmann of Truist Securities maintains a Strong Buy rating on the stock, with a revised price target of $77.
8. International Seaways Inc. (NYSE:INSW)
Price to Earnings ratio: 3.93
International Seaways Inc. (NYSE:INSW) is a leading tanker company specializing in energy transportation services for crude oil and refined petroleum products in international markets.
International Seaways Inc. (NYSE:INSW) continues to strengthen its fleet with a strategic investment in six scrubber-fitted, dual-fuel (LNG) ready Long Range 1 (LR1) vessels. The company has secured contracts with K Shipbuilding Co., Ltd. in Korea for the construction of these vessels at a total cost of approximately $359 million. Scheduled for delivery between Q3 2025 and Q3 2026, these eco-efficient tankers are designed to enhance the company’s operational capabilities. Upon delivery, the vessels are expected to join the Panamax International Pool, a high-performing market segment.
International Seaways Inc. (NYSE:INSW) delivered solid results for the full year 2024, reporting a net income of $417 million. The company generated strong cash flow, with adjusted EBITDA reaching $583 million. The company also maintained a robust balance sheet, ending the year with total liquidity of approximately $632 million, including $157 million in cash. Additionally, International Seaways returned significant value to shareholders, paying a total of $5.77 per share in dividends for 2024, representing a 12% yield.
7. CytomX Therapeutics Inc. (NASDAQ:CTMX)
Price to Earnings ratio: 3.86
CytomX Therapeutics Inc. (NASDAQ:CTMX) is a clinical-stage biopharmaceutical company focused on developing innovative oncology treatments using its PROBODY therapeutic technology platform. CTMX is one of the best cheap growth stocks to buy.
In January 2025, CytomX Therapeutics Inc. (NASDAQ:CTMX) announced a strategic realignment to focus on its lead program, CX-2051. It is a PROBODY antibody-drug conjugate (ADC) targeting EpCAM for advanced metastatic colorectal cancer. This initiative included a 40% reduction in workforce, primarily affecting non-partnered early research and administrative functions, aiming to extend the company’s cash runway into the second quarter of 2026.
CytomX Therapeutics Inc. (NASDAQ:CTMX) reported strong revenue growth in Q3 2024, with total revenue rising to $33.4 million from $26.4 million in Q3 2023. This was primarily due to increased research collaboration with Bristol Myers Squibb. However, operating expenses also increased, with R&D expenses climbing to $21.4 million from $16.5 million a year prior, driven by higher clinical and manufacturing costs for CX-2051 and CX-904. General and administrative expenses also rose slightly to $8.0 million due to higher professional service costs. The company ended the quarter with $117.6 million in cash, down from $137.2 million in Q2 2024. It remains confident that existing capital will fund operations through the end of 2025.
6. Mesabi Trust (NYSE:MSB)
Price to Earnings ratio: 3.81
Mesabi Trust (NYSE:MSB) is a royalty trust that earns income from the Peter Mitchell Mine, an iron ore operation near Babbitt, Minnesota. With a P/E ratio of 3.8, MSB is one of the best cheap growth stocks to buy.
In a notable vote of confidence, prominent investor Murray Stahl increased his stake in Mesabi Trust (NYSE:MSB) on December 31, 2024. Stahl acquired an additional 183,387 shares at $28.11 per share, bringing his total holdings to 2,843,010 shares. This 6.9% increase in his position highlights his bullish outlook on the Trust’s long-term value proposition. As a seasoned investor known for his deep-value investment approach, Stahl’s move suggests firm conviction in Mesabi Trust’s future prospects.
On January 14, 2025, Mesabi Trust (NYSE:MSB) declared a distribution of $5.95 per Unit of Beneficial Interest, payable on February 20, 2025, to unitholders of record as of January 30, 2025. This substantial increase from the previous year’s $0.37 per unit distribution is primarily due to a $71.2 million arbitration award received on October 4, 2024. This was for underpaid royalties from 2020 to early 2022. Additionally, Mesabi Trust (NYSE:MSB) reported royalty payments of $7.36 million on October 30, 2024, up from $5.67 million in October 2023.
5. AG Mortgage Investment Trust Inc. (NYSE:MITT)
Price to Earnings ratio: 3.34
AG Mortgage Investment Trust Inc. (NYSE:MITT) is a residential mortgage REIT focused on investing in a diversified portfolio of mortgage-related assets in the U.S. housing market. The company primarily acquires and securitizes newly originated residential mortgage loans, particularly in the non-agency segment.
On January 31, 2025, AG Mortgage Investment Trust Inc. (NYSE:MITT) released the tax treatment details for its 2024 distributions. It provided key information for investors regarding the classification of dividends for tax reporting purposes. This announcement ensures transparency in how the company’s payouts will be taxed, distinguishing between ordinary income, return of capital, and capital gains components.
For full-year 2024, AG Mortgage Investment Trust Inc. (NYSE:MITT) reported $1.23 net income per share and $0.76 earnings available for distribution (EAD) per share. The company generated an 11.7% annual economic return on equity, supported by a $6.7 billion investment portfolio. It maintained its commitment to shareholder returns, paying $0.75 in common dividends for the year, including a Q4 dividend of $0.19 per share.
Jason Weaver of Jones Trading maintained a Strong Buy rating on the stock, with a slightly revised price target of $8.50 from $8, as of March 3, 2025.
4. SHF Holdings Inc. (NASDAQ:SHFS)
Price to Earnings ratio: 3.29
SHF Holdings Inc. (NASDAQ:SHFS) is a specialized service provider that helps financial institutions offer banking solutions to the cannabis, hemp, and CBD industries. It is among the best cheap growth stocks to buy.
SHF Holdings Inc. (NASDAQ:SHFS) continues to expand its lending portfolio while taking strategic steps to enhance liquidity. On February 12, 2025, the company closed a $1.5 million secured credit facility for a Missouri-based cannabis operator. This marks the second tranche of a $5 million loan package aimed at refinancing high-interest debt across four dispensaries. Additionally, on February 3, 2025, the company announced a temporary pause in principal payments for February and March on its Senior Secured Promissory Note with PCCU, freeing up approximately $510,000 in liquidity as discussions on potential modifications continue.
SHF Holdings Inc. (NASDAQ:SHFS) delivered a 147% increase in net income, reporting $354,000 in Q3 2024 compared to a $748,000 net loss in the same period last year. Loan interest income surged 48% year-over-year to $1.3 million, reflecting the company’s expanding lending operations. Despite a 19.6% decline in revenue to $3.5 million, SHF Holdings Inc. improved cost efficiency, reducing operating expenses by 13% to $3.3 million.
3. OptimumBank Holdings Inc. (NYSE:OPHC)
Price to Earnings ratio: 3.26
OptimumBank Holdings Inc. (NYSE:OPHC) is the bank holding company for OptimumBank, a state-chartered community bank serving individual and corporate customers in Broward County, Florida.
The company participated in the 2025 Sequire Investor Summit in Puerto Rico on January 21-23, 2025, using the platform to present its strategic initiatives to potential investors. This move aligns with the bank’s efforts to expand its market visibility and attract new investment. Meanwhile, on January 28, 2025, longtime board member Martin Schmidt resigned, ending nearly a decade of service. During his tenure, Schmidt played a key role in navigating regulatory challenges and contributing to the bank’s expansion.
OptimumBank Holdings Inc. (NYSE:OPHC) delivered a significant increase in profitability for the full year 2024. It reported net income of $13.1 million, more than doubling from $6.3 million in 2023. Earnings per share rose to $1.39 basic and $1.33 diluted, compared to $0.87 per share in the prior year. Net interest income surged 46.3% to $34.7 million, fueled by a 43.1% increase in interest-earning assets. Noninterest income climbed 33.9% to $4.6 million, driven by higher service charges.
2. Angel Oak Mortgage REIT Inc. (NYSE:AOMR)
Price to Earnings ratio: 3.22
Angel Oak Mortgage REIT Inc. (NYSE:AOMR) is a real estate investment trust (REIT). It specializes in acquiring and investing in first lien non-qualified mortgage loans and other mortgage-related assets in the U.S.
On February 28, 2025, Angel Oak Mortgage REIT Inc. (NYSE:AOMR) paid its scheduled quarterly cash dividend of $0.32 per share, as previously declared on February 6, 2025. This dividend aligns with the company’s ongoing commitment to provide regular returns to its shareholders, reflecting a forward annual dividend of $1.28 and a yield of approximately 13.39%.
Angel Oak Mortgage REIT Inc. (NYSE:AOMR) delivered solid Q3 2024 results, reporting net interest income of $9.0 million, a 22% increase from $7.4 million in Q3 2023. The company posted GAAP net income of $31.2 million, reflecting a strong portfolio performance. However, distributable earnings showed a loss of $3.4 million, indicating some operational challenges. Angel Oak Mortgage REIT executed a $316.8 million securitization in October, reducing debt and lowering funding costs.
Donald Fandetti of Wells Fargo maintains a Buy rating on the stock, with a price target of $12.
1. Ring Energy Inc. (NYSE:REI)
Price to Earnings ratio: 2.12
Ring Energy Inc. (NYSE:REI) is an oil and gas exploration and production company focused on developing its Permian Basin assets in Texas.
On Feb 26, 2025 Ring Energy Inc. (NYSE:REI) announced a $100 million acquisition of Lime Rock Resources IV, LP’s Central Basin Platform (CBP) assets. This further strengthens its Permian Basin footprint. The acquisition, consisting of $80 million in upfront cash, a $10 million deferred payment, and up to 7.4 million shares of common stock, is expected to boost production, improve operational synergies, and enhance free cash flow generation. The newly acquired 17,700 net acres contribute 2,300 barrels of oil equivalent per day (over 80% oil) of low-decline production across 101 gross wells.
Ring Energy Inc. (NYSE:REI) reported record sales of 20,108 barrels of oil equivalent per day (66% oil) for Q3 2024, exceeding guidance, with oil sales of 13,204 barrels of oil per day. The company posted a net income of $33.9 million and Adjusted Net Income of $13.4 million, reflecting strong operational efficiency. It successfully reduced its debt by $15 million, ending Q3 with $392 million in outstanding borrowings, while boosting its liquidity to $208 million.
Overall, Ring Energy Inc. (NYSE:REI) ranks first on our list of the 10 Cheap Growth Stocks to Buy Now. While we acknowledge the potential for REI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than REI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stock To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.