In this article, we will look at the 10 Dirt Cheap Stocks To Invest In Now.
Investor’s Guide to Navigating the Volatility
The stock market has been experiencing volatility and has quickly shifted from the post-election highs to being priced for recession. As of April 8, the S&P 500 had declined 19% from the all-time highs. The magnitude of this fall is slightly shy of the bear market threshold, thereby creating a sense of confusion for the investors to pave their way forward. To talk about the investment strategy during times of volatility, Prime Capital Financial CIO Will McGough joined Yahoo Finance on April 11 for an interview.
McGough noted that they have been telling their clients and advisors to prepare for the volatility before the start of 2025. This is partly due to the new regime in Washington DC and its policies. However, more importantly, the market has had two really great years with more than 20% gains back to back, as a result, the price-to-earnings ratios were extended to historical extremes and earnings growth was delivering around 15% to 20%. These figures suggested that the market was almost at its peak with very little upside potential left to explore, which pointed towards risks of volatility.
McGough presented his investment strategy during this time of volatility. He highlighted that they have been advising investors to look for diversity and increased exposure, which essentially means to be cognizant of the exposure your portfolio has in terms of growth and value stocks. He noted that if you have the “Mag Seven” in your portfolio, they are concentrated and are categorized as large-cap growth, which suggests that the portfolio should be balanced with value and dividend-paying stocks as well. McGough noted that this helps temper the volatility and provides some stability. He also highlighted that after 15 years the market is finally moving away from the Mag Seven and in this scenario, the investors simply need to look for Market Weight stocks rather than Overweight.
Another area for investors to look at is the international market. McGough pointed out that for a greater chunk of recent history, the United States market has dominated international stocks, however, the current market tightening and Trump administration policies are encouraging international stocks to increase spending and promote revenue growth. Therefore this can be a good time for investors to look ahead of the United States market into international stocks such as those based in Europe and Germany. McGough concluded that all of the market situation points towards a single mantra of being diversified rather than placing all the eggs in a single basket.
With that let’s take a look at the 10 dirt cheap stocks to invest in now.
A young professional in a suit examining stocks on a tablet computer in a mid-town office building.
Our Methodology
To compile the list of 10 dirt cheap stocks to invest in now, we used the Finviz stock screener, Seeking Alpha, and Yahoo Finance. Using the screener we first aggregated a list of stocks trading below the Forward P/E of less than 10 with earnings expected to grow during the year. After sorting the list by market capitalization, we cross-checked each stock’s P/E and earnings growth from Seeking Alpha and Yahoo Finance, respectively. Lastly, we ranked the stocks in ascending order of the number of hedge fund holders, sourced from Insider Monkey’s database.
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 Dirt Cheap Stocks To Invest In Now
10. Barclays PLC (NYSE:BCS)
Forward P/E Ratio: 6.18
Earnings Growth This Year: 29.05%
Number of Hedge Fund Holders: 25
Barclays PLC (NYSE:BCS) is a Britain-based international financial services company that provides various banking services. The company operates through five key divisions including Barclays UK, UK Corporate Bank, Private and Wealth Management, Investment Bank, and US Consumer Bank. It has operations in over 40 countries around the globe.
On April 7, J.P. Morgan analyst Kian Abouhossein maintained a Buy rating on the stock. The bank has been focused on executing its three-year strategic plan, which led to improved financial results in fiscal 2024. During the year, Barclays PLC (NYSE:BCS) delivered a Return on Tangible Equity of 10.5% which exceeded the target of 10%. In addition, profitability before tax increased by 24% year-over-year to £8.1 billion, reflecting strong operational and financial improvements.
Moreover, Ariel Global Fund in its Q4 2024 investor letter stated that they expect Barclays PLC (NYSE:BCS) to benefit from the global capital market recovery. The fund expects the bank to pursue its target of distributing £3 billion as dividends and £10 billion as share repurchases to shareholders. It is one of the dirt-cheap stocks to invest in now.
Ariel Global Fund stated the following regarding Barclays PLC (NYSE:BCS) in its Q4 2024 investor letter:
“We bought global bank and financial services provider, Barclays PLC (NYSE:BCS). We expect shares to benefit from a recovery in global capital markets and net interest income (NII) growth driven by macroeconomic hedging and asset flows. The bank is also planning to expand its investment banking advisory business. Moreover, its U.S. credit card business presents opportunities for either a potential sale or a quicker earnings recovery. Taken together, we see a reasonable path for Barclays to pursue its return targets, which include the distribution of £3 billion and £10 billion to shareholders through dividends and share repurchases between 2024 and 2026 and achieving a return on tangible common equity of about 12%.”
9. TotalEnergies SE (NYSE:TTE)
Forward P/E Ratio: 7.23
Earnings Growth This Year: 0.04%
Number of Hedge Fund Holders: 26
TotalEnergies SE (NYSE:TTE) is an international multi-energy providing company. Its operations range from oil, natural gas, renewable energy, and electricity. The company has also been developing its portfolio for renewable energies by developing wind and solar-powered plants.
On April 1, J.P. Morgan analyst Matthew Lofting maintained a Buy rating on the stock with a price target of €70. During fiscal 2024, the company advanced its strategy of being balanced and consistent. It enhanced its production by starting production in 5 major projects, along with latching four additional oil projects. On the LNG front, TotalEnergies SE (NYSE:TTE) signed several medium-term contracts securing over 6 million tons per year of LNG volume. As a result, it was able to exceed expectations for cash flow generation and delivered $2.6 billion from integrated power activities.
Looking ahead, TotalEnergies SE (NYSE:TTE) aims to grow its global energy production by 4% annually to reach 100 TWh by 2030. It is one of the dirt-cheap stocks to invest in now.
8. Dell Technologies Inc. (NYSE:DELL)
Forward P/E Ratio: 8.91
Earnings Growth This Year: 12.96%
Number of Hedge Fund Holders: 63
Dell Technologies Inc. (NYSE:DELL) is a multinational technology company that specializes in artificial intelligence, software-based solutions, cloud infrastructure, and personal computers. It is known for servers, storage and networking solutions, and laptops. The company also ranks among the dirt cheap stocks to invest in now as it has a forward P/E of 8.9 with positive earnings growth expected throughout the year.
Dell Technologies Inc. (NYSE:DELL) delivered robust financial results in fiscal 2024. It grew its revenue by 8% year-over-year during the year with 7% growth in Q4. Notably, its AI server segment remained strong as management reported several deals with xAI that took its AI server backlog to $9 billion. Moreover, the Infrastructure Solutions Growth also remained a strong growth contributor with 22% year-over-year revenue growth. Management expects to keep growing its revenue by 8% in Q1 of 2025, making Dell Technologies Inc. (NYSE:DELL) an attractive investment opportunity considering its cheap valuation.
7. Verizon Communications Inc. (NYSE:VZ)
Forward P/E Ratio: 9.37
Earnings Growth This Year: 1.65%
Number of Hedge Fund Holders: 74
Verizon Communications Inc. (NYSE:VZ) is a global technology and telecommunication company that provides the latest communication technology services to individuals, businesses, and government. It operates through two main segments including the consumer segment and business segment.
On April 8, analyst Kutgun Maral from Evercore ISI upgraded the stock to a Buy rating with a price target of $48. The analyst noted that Verizon Communications Inc. (NYSE:VZ) has shown improvement in its postpaid subscribers, which he believes is a critical metric for telecommunication companies. Moreover, the company also continues to meet its broadband subscriber targets, while making progress in its fiber optic network.
On top of this rating upgrade, Verizon Communications Inc. (NYSE:VZ) also delivered strong financial and operational results in fiscal 2024. It grew its wireless segment revenue by 3.1% and adjusted EBITDA by 2.1% both coming ahead of its guidance. The company expects to grow its wireless service revenue by 2% to 2.8% in the future. It is one of the dirt-cheap stocks to invest in now.
6. JD.com, Inc (NASDAQ:JD)
Forward P/E Ratio: 7.68
Earnings Growth This Year: 11.17%
Number of Hedge Fund Holders: 78
JD.com, Inc (NASDAQ:JD) is a leading e-commerce company based in China. It sets itself apart from its competitors based on its vast supply chain networks and its low prices. The company operates through four main business segments including JD Retail, JD Logistics, Dada, and New Businesses segment.
On April 11, analyst Fawne Jiang from Benchmark Co. maintained a Buy rating on the stock and maintained the price target of $58. Jiang noted that JD.com, Inc (NASDAQ:JD) is well-positioned to deliver a robust first-quarter performance driven by improved sales in various high-demand categories. The analyst also highlighted that the company holds a leading market share in the B2C segment and exercises its competitive edge through a direct sales model along with an extensive network of logistics.
During the fiscal fourth quarter of 2024, JD.com, Inc (NASDAQ:JD) grew its retail segment revenue by 15% year-over-year while the logistics segment also improved 10% during the same time. It is one of the dirt-cheap stocks to invest in now.
Ariel Global Fund stated the following regarding JD.com, Inc. (NASDAQ:JD) in its Q4 2024 investor letter:
“China-based E-commerce company, JD.com, Inc. (NASDAQ:JD) also detracted from performance over the quarter. The stock came under pressure as some investors took profits on solid earnings performance, while others became concerned with the implications tariffs could have on the Chinese economy. In our view, this share price action runs counter to the company’s solid business fundamentals. The home appliance trade-in program and popular shopping event, Singles’ Day, generated significant consumer spending across various product categories. Additionally, the company’s strategic decision to diversify general merchandise product offerings, expand its third-party marketplace business and monetize advertising streams continues to aid the top- and bottom-lines. Despite the near-term noise, we continue to view the company’s strategic positioning favorably and like JD.com’s long-term growth prospects.”
5. PDD Holdings Inc. (NASDAQ:PDD)
Forward P/E Ratio: 7.51
Earnings Growth This Year: 6.61%
Number of Hedge Fund Holders: 85
PDD Holdings Inc. (NASDAQ:PDD) is another multinational e-commerce company that operates renowned platforms including Pinduoduo, and Temu. While Pinduoduo is a Chinese e-commerce platform, Temu operates globally. The company is heavily invested in technology and AI, along with a vast network of logistics.
During the fiscal fourth quarter of 2024, PDD Holdings Inc. (NASDAQ:PDD) grew its revenue by 24% year-over-year to reach RMB 110,610.1 million. Notably, its operating profit also grew 14% during the same time to RMB 25,592.2 million. Moreover, GreenWood Investors mentioned the company in its Q4 2024 investor letter. The fund admired the innovative business model of the company along with its ability to grow rapidly. The fund also highlighted the ability of PDD Holdings Inc. (NASDAQ:PDD) to grow its gross merchandising value 3x times to reach a comparable value with other e-commerce giants. It is one of the dirt-cheap stocks to invest in now.
GreenWood Investors stated the following regarding PDD Holdings Inc. (NASDAQ:PDD) in its Q4 2024 investor letter:
“Aside from transitory foreign exchange translation losses (as opposed to trading losses), the two other notable detractors from our portfolio were MEI Pharma and PDD Holdings Inc. (NASDAQ:PDD) in 2024.
PDD Holdings founder Colin Huang is who inspired us to “run 3x faster,” as the relentless corporate culture of PDD has built an e-commerce company with roughly the same GMV (gross merchandise value) of Amazon in one-third the time it took Amazon to build itself. Shares reacted negatively when the company decided to reinvest its record margins into even faster growth and creating a healthier supplier ecosystem. As it looks set to create a second Amazon with its international site Temu, we are highly attracted to the opportunity. Sales are growing 4x faster than Amazon’s, yet shares are priced at less than a quarter of the Amazon earnings multiple.
PDD is a perfect example of why we want to look outside of the “Big Ten” companies that are nearly a third of global market indices. We would not want to compete with the demanding corporate culture of PDD and Temu. Its operating model is relentless at identifying efficiency throughout the manufacturing and selling supply chain. Not only is it a mor formidable competitor than Amazon, and growing much faster, but the valuation is 4x more attractive than Amazon’s…” (Click here to read the full text)
4. Bristol-Myers Squibb Company (NYSE:BMY)
Forward P/E Ratio: 7.49
Earnings Growth This Year: 489.15%
Number of Hedge Fund Holders: 88
Bristol-Myers Squibb Company (NYSE:BMY) is an international biopharmaceutical company that focuses on discovering and developing unique medicines across oncology, hematology, immunology, cardiovascular diseases, neuroscience, and fibrotic conditions. It has a robust portfolio of medicines including Opdivo, Yervoy, Orencia, Eliquis, and Revlimid.
Bristol-Myers Squibb Company (NYSE:BMY) had a robust fiscal 2024, driven by double-digit growth across its growth portfolio. The company reported quarterly revenue of $12.3 billion, reflecting 8% year-over-year growth. Its growth portfolio alone contributed $6.4 billion, reflecting a 21% increase year-over-year.
Apart from the financial achievements the company secured approval for Cobenfy and Opdivo Quvantic, which further strengthens its position in the United States market. It is working on medicines like Milvexian, Arlocell, and others, and expects multiple data rollouts in 2025. It is one of the dirt-cheap stocks to invest in now.
3. Merck & Co., Inc. (NYSE:MRK)
Forward P/E Ratio: 8.84
Earnings Growth This Year: 17.09%
Number of Hedge Fund Holders: 91
Merck & Co., Inc. (NYSE:MRK) is another international pharmaceutical company that operates through two main segments namely Pharmaceuticals and Animal Health. On April 8th, Goldman Sachs analyst Asad Haider maintained a Buy rating on the stock.
The analyst noted that the market is overly pessimistic about Merck & Co., Inc. (NYSE:MRK) and its product pipeline value. He noted that the Animal Health segment of the company generates substantial revenue while showing growth potential. Haider believes that the segment is also highly undervalued by the market.
In addition, Keytruda is one of the key drugs by the company. The sales for Keytruda in 2024 reached $29.5 billion, reflecting an 18% increase year-over-year. Moreover, the overall global sales improved by 7% year-over-year during the fourth quarter alone to reach $15.6 billion. Merck & Co., Inc. (NYSE:MRK) is one of the dirt-cheap stocks to invest in now.
2. Citigroup Inc. (NYSE:C)
Forward P/E Ratio: 8.33
Earnings Growth This Year: 19.13%
Number of Hedge Fund Holders: 101
Citigroup Inc. (NYSE:C) is a global financial services company that operates through various segments to provide diversified services. Its segments include Services segment, Markets, Banking, Wealth, and US personal banking. On April 8th, Truist Financial analyst John McDonald CFA maintained a Buy rating on the stock with a price target of $84.
During the fiscal fourth quarter of 2024, Citigroup Inc. (NYSE:C) reported a net income of $2.9 billion compared to a net loss of $1.8 billion last year. This was driven by higher revenue, lower credit costs, and reduced expenses. Moreover, the revenue for the quarter grew 12% to reach 19.6%, driven by growth across the board. CEO, Jane Fraser noted that the company is returning to momentum as it entered 2025, he also pointed towards plans of transforming the business to improve the tangible common equity which is around 10% to 11% at the moment. It is one of the dirt-cheap stocks to invest in now.
1. Bank of America Corporation (NYSE:BAC)
Forward P/E Ratio: 9.91
Earnings Growth This Year: 13.03%
Number of Hedge Fund Holders: 113
Bank of America Corporation (NYSE:BAC) is an American multinational financial company that operates through various key business segments including Consumer Banking, Global Wealth, and Investment Management. Global Banking, and Global Markets. Its operations span over 35 countries and is categorized as one of the “Big Four” banking institutions in the US.
On April 8, Truist Financial analyst John McDonald CFA maintained a Buy rating on the stock with a price target of $50. Hardman Johnston Global Equity Strategy provided a bullish sentiment on Bank of America Corporation (NYSE:BAC) in its Q4 2024 investors letter. The fund noted that the bank is recognized as the second-largest bank in the developed world and operates the third-largest branch network in the United States. The bank makes 86% of its revenue from the United States and is expected to benefit from the Trump administration. Moreover, it also has a diversified portfolio across various banking segments including retail banking, commercial banking, wealth management, and investment banking.
During fiscal 2024, Bank of America Corporation (NYSE:BAC) generated $11 billion in revenue through its Consumer Banking segment. This contributed more than 40% to the total earnings. Moreover, it also has a strong digital presence with more than 14 billion logins and digital sales of more than 60% in Q4 alone. It is the top dirt-cheap stock to invest in now.
Hardman Johnston Global Equity Strategy stated the following regarding Bank of America Corporation (NYSE:BAC) in its Q4 2024 investor letter:
“Bank of America Corporation (NYSE:BAC) is the second largest bank in the developed world and operates the third largest branch network in the US. With 86% of revenues coming from the US, the bank is a clear beneficiary of the lower regulatory environment expected from the incoming administration. The company’s business is highly diversified across retail, commercial, wealth management, and investment banking, with significant scale across all verticals. Management believes there is a big opportunity going forward in growing and monetizing its mass retail client base. Wealth is another huge opportunity, with the Merrill Lynch platform enabling customers to make more transactions and purchase additional products. Lastly, Bank of America has an opportunity to increase efficiency through cost reduction and online banking. Our expectation is for the bank’s ROE to move significantly higher, driving EPS growth and higher multiples.”
While we acknowledge the potential of BAC to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than BAC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
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