17 High Growth Low PE Stocks

Published on March 4, 2023 at 9:08 am by Fahad Saleem in Hedge Funds, News

In this article, we will take a look at the 17 high growth low PE stocks. To see more such companies, go directly to 5 High Growth Low PE Stocks.

The optimism seen in financial markets during the start of 2023 is fading as retail sales data, CPI numbers and jobs report collectively dashed any hopes that the Federal Reserve might stop increasing interest rates soon. However, downturn in the market creates opportunities for long-term investors. In its 2023 outlook report, JPMorgan said that low valuations today offer the best long-term returns since 2010. While the firm believes a recession or “least several quarters of subtrend growth lie immediately ahead,” its 10- to 15-year investment horizon is unchanged.

The JPMorgan report said that the globalization trend in the world could give rise to interesting dynamics in financial markets. For example, it believes the globalization of services and labor may be a “mitigating disinflationary force.” However, the report said that the world is seeing an increased trend of trade blocs. These trading blocs increase “right-tail risks to inflation – particularly as rival blocs compete for scarce commodities.”

“Certainly, the world today feels a more dangerous place than it has since the end of the Cold War, as geopolitical tension indices such as the Federal Reserve’s (Fed’s) Geopolitical Risk Index (GPR) underscore. While trading blocs may become more regionally focused, we think globalization will evolve but not unravel.”

Photo by Chris Liverani on Unsplash

Our Methodology

For this article used the Finviz stock screener to list down stocks that have PE ratios less than 15 (as of February 16), quarter-over-quarter sales growth of over 25% and five-year sales growth of over 25%.

High Growth Low PE Stocks

17. Viper Energy Partners LP (NASDAQ:VNOM)

PE Ratio as February 16, 2022: 14.19

Viper Energy Partners LP (NASDAQ:VNOM) is a notable stock with an attractive PE ratio and high growth. Viper Energy Partners LP (NASDAQ:VNOM)’s dividend yield stands at 6.20%. In November, Viper Energy Partners LP (NASDAQ:VNOM) posted its Q3 results. Adjusted EPS in the quarter was $0.98, beating estimates by $0.51. Revenue in the period jumped about 73.1% on a YoY basis to come in at $221.62 million, beating estimates by $7.01 million.

Carillon Eagle Small Cap Growth Fund made the following comment about Viper Energy Partners LP (NASDAQ:VNOM) in its Q4 2022 investor letter:

“Viper Energy Partners LP (NASDAQ:VNOM) owns and acquires mineral and royalty interests in oil and natural gas properties primarily in the Permian Basin of western Texas and southeastern New Mexico. The company’s stock has been a steady outperformer recently and has substantially outpaced the price of benchmark West Texas Intermediate crude oil. Viper is well-positioned in this market due to the fact that it doesn’t incur the service costs to drill and complete the wells, which likely will increase dramatically and offset a portion of the upside from higher commodity prices for traditional exploration and production companies.”

16. SouthState Corporation (NASDAQ:SSB)

PE Ratio as February 16, 2022: 12.24

Florida-based bank holding company SouthState Corporation (NASDAQ:SSB) is one of the high growth low PE stocks to watch. SouthState Corporation (NASDAQ:SSB) has a PE ratio of 12.47 as of February 16. SouthState Corporation (NASDAQ:SSB) has gained more than 8% year to date through February 16. In January, SouthState Corporation (NASDAQ:SSB) posted its fourth quarter results. The financial services company’s revenue in the quarter jumped by a whopping 1419% to come in at $459.4 million, beating estimates by $12.14 million. Adjusted EPS in the quarter came in at $1.90, missing estimates by $0.14.

Hedge fund sentiment for SouthState Corporation (NASDAQ:SSB) is positive. At the end of the third quarter of 2022, 25 hedge funds reported owning stakes in SouthState Corporation (NASDAQ:SSB), up from 15 funds in the previous quarter.

15. PagSeguro Digital Ltd. (NYSE:PAGS)

PE Ratio as February 16, 2022: 11.67

Brazilian payments company (NYSE:PAGS) ranks 15th in our list of high growth low PE stocks. In November, (NYSE:PAGS) posted its third quarter results. Revenue in the period increased by 45% on a YoY basis but fell short of the consensus estimate.

14. Cenovus Energy Inc. (NYSE:CVE)

PE Ratio as February 16, 2022: 9.55

Canadian energy company Cenovus Energy Inc. (NYSE:CVE) ranks 14th in our list of the 17 high growth low PE stocks. Cenovus Energy Inc. (NYSE:CVE) has a PE ratio of 10 as of February 16. Recently, Cenovus Energy Inc. (NYSE:CVE) posted its Q4 results. Revenue in the period jumped about 2.9% on a YoY basis to total C$14.1 billion.

Cenovus Energy Inc. (NYSE:CVE) recently declared a quarterly dividend of CAD 0.105 per share, the same as the previous quarterly dividend. Forward dividend yield came in at 1.62%.

As of the end of the third quarter of 2022, 47 hedge funds reported owning stakes in Cenovus Energy Inc. (NYSE:CVE). The net worth of these stakes at the end of the quarter was about $2 billion.

Here is what L1 Capital Long Short Fund has to say about Cenovus Energy Inc. (NYSE:CVE) in its Q3 2022 investor letter:

“Cenovus Energy (Long -13%) shares declined over the quarter due to an ~18% decline in oil prices on increasing fears of a U.S recession and a slowdown in global growth. Given the long-life nature of its oil sand assets and its low cost of production, we estimate Cenovus is free cash flow break-even at an oil price of ~US$40/bbl. Despite the recent fall, oil prices remain more than double this break-even point, implying considerable free cash flow generation potential for the company at current levels, with Cenovus currently trading on a consensus FY22 free cash flow yield of around 20%. There are also additional value realisation catalysts with the company continuing to progress the de-gearing of its balance sheet via organic cash generation and asset sales.”

13. Arbor Realty Trust, Inc. (NYSE:ABR)

PE Ratio as February 16, 2022: 9.05

Arbor Realty Trust, Inc. (NYSE:ABR) is one of the notable high-yield dividend stocks with high revenue growth. Arbor Realty Trust, Inc. (NYSE:ABR)’s revenue in the third quarter jumped 42% on a YoY basis. In November, Arbor Realty Trust, Inc. (NYSE:ABR) upped its dividend for the 10^th consecutive quarter.

12. Kosmos Energy Ltd. (NYSE:KOS)

PE Ratio as February 16, 2022: 8.21

Kosmos Energy Ltd. (NYSE:KOS) shares have gained about 88% over the past 12 months. The upstream energy company’s stock has a PE ratio of 8.44. Recently, Kosmos Energy Ltd. (NYSE:KOS) shares jumped after Benchmark analyst Subash Chandra started covering the stock with a Buy rating and a $10 price target. The analyst believes Kosmos Energy Ltd. (NYSE:KOS)’s organic growth opportunities are undervalued.

He thinks the current share price does not reflect his 2024 production forecast of 90K boe/day, LNG upside from pre-FID projects and Kosmos Energy Ltd. (NYSE:KOS)’s substantial exploration inventory.

11. Matador Resources Company (NYSE:MTDR)

PE Ratio as February 16, 2022: 6.33

Matador Resources Company (NYSE:MTDR) is a Texas-based energy company. It ranks 11th in our list of high growth low PE stocks. Back in October Matador Resources Company (NYSE:MTDR) posted solid Q3 results. During the quarter, Matador Resources Company (NYSE:MTDR)’s EPS jumped about 114% on a YoY basis while its revenue increased by 78% year over year to come in at $840.93 million. Matador Resources Company (NYSE:MTDR)’s oil and natural gas production in the period was also strong. Recently, Matador Resources Company (NYSE:MTDR) declared a quarterly dividend of $0.15 per share. The dividend is payable on March 9 to shareholders of record as of February 27.

At the end of the third quarter of 2022, 24 hedge funds in Insider Monkey’s database had stakes in Matador Resources Company (NYSE:MTDR).

Here is what ClearBridge Investments Small Cap Strategy has to say about Matador Resources Company (NYSE:MTDR) in its Q3 2022 investor letter:

“We added Matador Resources (NYSE:MTDR), an oil and natural gas exploration and production company. The company has carefully acquired high-quality acreage across the Permian basin of West Texas and New Mexico that we believe could provide up to 20 years of consistent drilling activity. Additionally, the company is the majority owner of its infrastructure and midstream provider, which provides the company with a valuable asset and right of first call on transport capacity, which we believe is a hidden asset not reflected in the company’s share price.”

10. Sibanye Stillwater Limited (NYSE:SBSW)

PE Ratio as February 16, 2022: 6.04

Headquartered in South Africa, Sibanye Stillwater Limited (NYSE:SBSW) is a metals processing and mining company. Sibanye Stillwater Limited (NYSE:SBSW) rose to the spotlight recently after the company said it received a key environmental permit for its Keliber lithium mining and processing project in Finland.

At the end of the September quarter of 2022, 18 out of the 920 elite hedge funds tracked by Insider Monkey had reported owning shares of Stillwater Limited (NYSE:SBSW). The total value of these stakes was about $157 million.

The stock has a dividend yield of over 8% as of February 16.

9. Diamondback Energy, Inc. (NASDAQ:FANG)

PE Ratio as February 16, 2022: 5.74

Diamondback Energy, Inc. (NASDAQ:FANG) is yet another energy stock in our list of high growth low PE stocks. In November, Diamondback Energy, Inc. (NASDAQ:FANG) posted its third quarter results. Adjusted EPS in the quarter totaled $6.48, beating estimates by $0.12. Revenue in the quarter increased by about 28% on a YoY basis to reach $2.44 billion, beating estimates by $20 million. Diamondback Energy, Inc. (NASDAQ:FANG) said its average production in the quarter was 224.3 MBO/d.

Diamondback Energy, Inc. (NASDAQ:FANG) in November also declared quarterly dividend of $0.75/share. Forward dividend yield at the time came in at 1.86%.

At the end of the third quarter of 2022, 55 hedge funds had stakes in Diamondback Energy, Inc. (NASDAQ:FANG). The net worth of these stakes was over $910 million.

8. Permian Resources Corporation (NYSE:PR)

PE Ratio as February 16, 2022: 5.63

Permian Resources Corporation (NYSE:PR) has gained about 30% over the past year. Permian Resources Corporation (NYSE:PR)’s PE ratio remains attractive. Permian Resources Corporation (NYSE:PR)’s revenue in the third quarter jumped a whopping 90% on a YoY basis to come in at $549.78 million, beating estimates by $30.93 million. GAAP EPS in the quarter was $0.70, beating estimates by $0.25.

In January, Permian Resources Corporation (NYSE:PR) announced that it entered into an agreement to acquire 4,000 net leasehold acres in New Mexico from an undisclosed seller for $98 million, while agreeing to sell non-operated properties in Texas and New Mexico for a combined $70 million.

26 out of the 920 hedge funds tracked by Insider Monkey reported having stakes in Permian Resources Corporation (NYSE:PR) at the end of the third quarter of 2022.

7. QuidelOrtho Corporation (NASDAQ:QDEL)

PE Ratio as February 16, 2022: 5.42

QuidelOrtho Corporation (NASDAQ:QDEL) makes diagnostic healthcare products. QuidelOrtho Corporation (NASDAQ:QDEL) has a PE ratio of 5.13 as of February 16. Recently, QuidelOrtho Corporation (NASDAQ:QDEL) posted its fourth-quarter results. Adjusted EPS in the quarter came in at $1.76, beating estimates by $0.34. Revenue in the quarter jumped 36.1% on a YoY basis to come in at $866.5 million, surpassing estimates by $90.69 million.

At the end of the third quarter, 29 hedge funds in Insider Monkey database had stakes in QuidelOrtho Corporation (NASDAQ:QDEL).

Meridian Funds made the following comment about QuidelOrtho Corporation (NASDAQ:QDEL) in its Q3 2022 investor letter:

“QuidelOrtho Corporation (NASDAQ:QDEL) is a global leader in the diagnostics industry. The merger of Quidel and Ortho Clinical Diagnostics has resulted in a top 10 player in the in-vitro diagnostics industry, combining Quidel’s strong point of care platform with Ortho’s blood chemistry and transfusion platform. We believe the new company will be much more consistent in its ability to deliver steady top-line growth at attractive margins to fuel free cash flow growth. Further boosting our conviction in QuidelOrtho is its robust product pipeline. Pipeline developments include the company’s Savanna platform, which solves a long-term need for near-patient molecular testing that is accurate, fast, and economical. We believe the stock weakness is due to the anticipated decline in COVID-19 testing. However, we believe the long-term earnings and free cash flow profile are underappreciated, and as a result we increased our position in the stock.”

6. Civitas Resources, Inc. (NYSE:CIVI)

PE Ratio as February 16, 2022: 4.76

Colorado-based energy company Civitas Resources, Inc. (NYSE:CIVI) is one of the high growth low PE stocks in our list. Civitas Resources, Inc. (NYSE:CIVI) has gained about 40% over the past year. Still, it has a PE ratio of 4.84. Civitas Resources, Inc. (NYSE:CIVI)’s revenue during the third quarter saw a jump of a whopping 426% on a YoY basis. GAAP net income in the quarter was $405.8 million.

In January, Civitas Resources, Inc. (NYSE:CIVI) agreed to purchase $300 million worth of its common stock from its largest shareholder, Canada Pension Plan Investment Board.

As of the end of the third quarter of 2022, 34 hedge funds out of the 920 funds had stakes in Civitas Resources, Inc. (NYSE:CIVI). The total value of these stakes was $357 million.

Click to continue reading and see 5 High Growth Low PE Stocks.