We recently compiled a list of the 10 Cheap Growth Stocks to Buy Now. In this article, we are going to take a look at where AG Mortgage Investment Trust, Inc. (NYSE:MITT) stands against the other cheap growth stocks.
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.
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).
Aerial view of a thriving real estate investment property surrounded by lush green vegetation.
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.
Overall MITT ranks 5th on our list of the cheap growth stocks to buy now. While we acknowledge the potential of MITT 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 MITT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
