We recently published a list of 11 Ridiculously Cheap Stocks to Invest in. In this article, we are going to take a look at where Helen of Troy Limited (NASDAQ:HELE) stands against other ridiculously cheap stocks to invest in.
Just as we hunt for bargains in the commodity market—comparing relative prices, identifying discounted products, and getting the product most valued for our money—investing in the financial market isn’t any different. In both investments, price matters.
In a world of overpriced stocks, spotting the hidden gem is what differentiates a smart investor from an impulsive investor. One who realizes that value isn’t just about what you buy rather it’s more about what you pay, is the one who is likely to identify an overlooked but full of value stock.
Let’s first understand what a cheap stock actually implies. There are two most common interpretations of such a stock. First, a stock may be regarded as a cheap stock if it has a low share price. Second, an undervalued stock is more commonly known as a cheap stock. Our analysis resonates with the second interpretation, that a cheap stock is a stock that is trading below its intrinsic value based on factors like earnings, revenue, or assets. Thus, in the market, investors say it’s “cheap” relative to its true potential, making it a compelling investment.
One such measure to spot a cheap stock is through the forward price-to-earnings ratio. This is a measure used by investors to actually see how much they are paying for each dollar of a company’s earnings. A low P/E can signal an undervalued stock when compared to its competitors, historical average, and broader market average.
A report by Hoover Capital Management (HCM) analyzes the historical performance of value versus growth stocks through the French High Minus Low (HML) factor. The results from 97 years of data, from July 1926 to December 2023, strongly support value investing. The cumulative return of value stocks surpassed growth stocks by an impressive 3,000%. In other words, value investing has delivered a 30 times higher return on growth than growth investing. It can be further reinforced through the research by Economist Victoria Galsband, according to which cheap stocks outperformed growth stocks from 1975 to 2010 in every single G7 country, including Canada, the U.S., Japan, and the leading European countries.
Another report that analyzed the impact of additions or removals of companies from the S&P index on their valuations indicated that, as removals are associated with the undervaluation of the stock and vice versa, many companies removed from the index outperformed the market. A study by Research Affiliates highlighted that stocks taken out of the S&P between 1990 and 2022 outperformed those that were added by more than 5% annually. This provides a compelling case for our view that undervalued stocks, translated to cheap stocks, have a greater probability of yielding higher returns.
Our Methodology
We have compiled a list of 11 ridiculously cheap stocks through the Finviz screener. In doing so, stocks have been selected that have a lower than 5 price-to-earnings (P/E) ratio. These stocks cover a range of industries, from consumer products to natural resources exploration. These companies are then listed according to their P/E ratios, from highest to lowest.
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).
A woman in a spa setting, using Health & Wellness products.
Helen of Troy Limited (NASDAQ:HELE)
Forward P/E as of April 17: 4.13
Helen of Troy Limited (NASDAQ:HELE) is a leading global consumer products company with a focus on creative solutions through well-diversified and widely recognized brands. Headquartered in Hamilton, Bermuda, the company mainly operates through the Home and Outdoor and Beauty and Wellness segments. HELE emphasizes product innovation, product quality, and competitive pricing.
Helen of Troy Limited (NASDAQ:HELE)’s recent acquisition of Olive & June, a high-end nail care brand, is what makes it a bull. This is a testament to the giant’s diversification approach, as the traditional offerings were limited to hair appliances and skin care. In the fourth quarter, the acquisition is anticipated to contribute $17 to $19 million in revenue, with even further upside expected in the years ahead. Noel Geoffroy, the Chief Executive Officer, made the following comment:
“We see significant growth potential in Olive & June as the team continues to build on the brand’s strength and consumer obsession and breakthrough commercial and product innovation in addition to leveraging Helen of Troy capabilities to help expand availability with increased distribution.”
Helen of Troy Limited (NASDAQ:HELE) is consistently investing in product innovation and marketing, the two key pillars of any leading business strategy. This, along with improved flu-related sales, distribution benefits, and gains from the acquisition, can assist the company in making positive revenue growth in the coming quarters.
While the company is at high risk of tariffs, as it is heavily sourcing goods from China, the impact can be negated through cost savings under Project Pegasus, volume leverage, synergy savings, and strategic pricing considerations in the long haul. Much of the success of Helen of Troy Limited (NASDAQ:HELE) lies in the cost minimization strategies in FY26, similar to those of FY25, under the Project Pegasus initiative.
The one-year price target of $78.33 highlights a whopping 135% increase in the stock price. With that being said, HELE is poised for long and sustainable growth and is one of the best cheap stocks to invest in.
Overall, HELE ranks 6th on our list of ridiculously cheap stocks to invest in. While we acknowledge the potential of cheap stocks, 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 HELE but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
