Finding hidden stock treasures with solid growth potential is a top-notch strategy for investors keen on filling their coffers in the stock market.
While some folks drool over high-flying, well-known companies, the real gems often lurk among the less glamorous stocks snagged at eye-popping valuations. These budget-friendly delights could be priced like yesterday’s leftover pizza compared to their earnings, book value, or industry mates—definitely worth a stroll down research lane!
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Why Now is the Time to Snag Those Undervalued Stocks?
As we wade into the chaotic waters of March 2025, the market has tossed us a buffet of deliciously promising opportunities across energy, finance, real estate, and tech. Sure, economic highs and lows, interest rate gymnastics, and international antics keep things spicy, but for those with a little patience, this is the golden hour to scoop up quality stocks without breaking the bank. The secret sauce? Spotting companies with robust fundamentals, earnings that could make a cheerleader blush, and business models as sturdy as your grandma’s favorite armchair—ready to thrive even when the market throws a tantrum.
How to Sniff Out a Tasty Cheap Stock
When on the hunt for excellent bargain stocks, one metric that deserves your attention is the price-to-earnings (P/E) ratio—think of it as the price tag on a company’s earnings. A P/E ratio that’s lower than a limbo stick usually hints that a stock is undervalued compared to its siblings. The price-to-book (P/B) ratio is also your friend in figuring out if a stock is on sale based on its assets. Don’t forget to sprinkle in some other crucial ingredients like revenue growth, debt levels, dividend yield, and cash flow—like a chef’s secret recipe for picking the ultimate stock stew.
Next up on your checklist is the company’s industry and its long-term growth vibes. Think renewable energy, REITs, financial services, and industries that are as trendy as avocado toast right now. These sectors are riding the wave of strong demand, government cheerleading, and cyclical rebounds, making them prime real estate for value-hunters!
Mantaining a Clear Approach
While investing in cheap stocks can be rewarding, it’s essential to be selective and focus on companies with a clear path to profitability and sustainable growth. Some low-priced stocks are cheap for a reason—whether due to declining business performance, high debt, or poor management—so careful due diligence is necessary. Looking at recent earnings reports, balance sheets, and management outlooks can provide valuable insights into a company’s potential.
With that in mind, here are some of the best cheap stocks to consider in March 2025, based on their valuation, financial health, and future growth prospects.
Our Whimsical Methodology
We cracked open Finviz’s stock screener tool to pluck some undervalued stocks from the great melon patch of the USA by filtering through the Descriptive and Fundamental sections. For Fundamental, we set the P/E Ratio to “Under 15” (no high rollers here!), Price/Book Ratio to “Under 2”, and PEG Ratio to “Under 1”. In Descriptive, we filtered by Price (like, say, Under $15) to keep our eyes on the cheaper stuff.
After applying these filters, we rolled up our sleeves, dove into the numbers, charts, and the latest gossip to make investment decisions that wouldn’t make our grandmas shake their heads.
Let’s dive in…
What are the 7 Best Cheap Stocks to Buy Now?
Here are the most promising low-cost stocks at this time:
The Manitowoc Company Inc. (NYSE: MTW)
The Manitowoc Company, Inc. is a worldwide provider of engineered lifting solutions, specializing in crankin’ out cranes. They’ve got a whole circus of mobile hydraulic cranes, lattice-boom crawlers, boom trucks, and tower cranes strutting their stuff under hotshot brands like Grove, Manitowoc, and Potain.
Manitowoc recently unveiled its full-year 2024 earnings, revealing a dip in key metrics compared to 2023. Adjusted EPS took a nosedive of 73% to $0.41, missing the Zacks Consensus Estimate of $0.45, while total revenue stumbled down 4.4% to $2.18 billion.
Their operating cash flow took a dip from $63 million in 2023 to $49 million in 2024. Long-term debt did a tiny hop to $377 million from $359 million, while operating expenses rolled down a hill to $79 million—an 11.5% drop year-over-year.
Peeking into the crystal ball, Manitowoc anticipates 2025 revenue between $2.175-$2.275 billion, with adjusted EPS somewhere between $0.15-$0.85 and adjusted EBITDA ranging from $120-$145 million—serving up a dollop of cautious optimism in the face of recent hurdles.
AG Mortgage Investment Trust Inc. (NYSE: MITT)
AG Mortgage Investment Trust, Inc. is a residential mortgage REIT on a quest to build a diversified pile of mortgage-related goodies within the U.S. housing market. They primarily invest in and securitize the freshest residential mortgage loans, especially in the non-agency playground.
The company recently spilled its Q3 2024 results, flaunting a 3.9% economic return on equity and a book value of $10.58 per share. Net income pranced in at $0.40 per diluted share, with earnings available for distribution hanging out at $0.17 per share.
MITT’s investment portfolio stands tall at $6.8 billion, bolstered by $6.4 billion in financing, $5.6 billion of which is non-recourse. Liquidity is as strong as your morning coffee at $119.7 million, and the company successfully retired $79.1 million in convertible notes—talk about spring cleaning!
Lument Finance Trust, Inc. (NYSE: LFT)
Lument Finance Trust, Inc. is a real estate investment trust (REIT) that specializes in moseying through commercial real estate (CRE) debt investments. They pay particular attention to transitional floating rate CRE mortgage loans, especially in the middle-market multifamily borough.
In their recent Q3 2024 earnings report, Lument announced a GAAP net income of $5.1 million, equal to $0.10 per share, right on the money with distributable earnings also hitting $5.5 million ($0.10 per share). They remain committed to their commercial real estate debt investments, showcasing their focus on floating rate loans in the middle-market multifamily zone. While LFT stands behind a steady dividend policy, it keeps an eye on distributable earnings as the trusty metric for financial performance and dividends.
First Guaranty Bancshares, Inc. is like the proud parent (or at least a jolly aunt) of First Guaranty Bank, supplying a smorgasbord of financial services across 36 locations in Louisiana, Texas, Kentucky, and West Virginia. Their mission? Building robust client relationships while serving local communities with everything from deposit accounts to lending solutions.
The company just shared its full-year 2024 earnings, proudly waving a net income of $12.4 million, reflecting a 35% leap from $9.2 million in 2023. EPS also sprouted to $0.81 from last year’s $0.62. Total assets swelled to $4.0 billion, up $420 million from 2023, while total deposits hopped up 15.5% to $3.5 billion.
However, total loans slipped by 2% to $2.7 billion as part of their master plan to dial down the commercial real estate loan concentration. Net interest income rose to $88.4 million, although the net interest margin took a dip to 2.47% from 2.69%.
VAALCO Energy Inc. (NYSE: EGY)
VAALCO Energy, Inc. is an independent energy company bursting with excitement for the exploration, development, and production of crude oil, natural gas, and natural gas liquids across several endearing global locations. Their asset portfolio is as diverse as your favorite playlist, spanning Gabon, Egypt, Côte d’Ivoire, Equatorial Guinea, and Canada.
Recently, VAALCO announced Q3 2024 net income of $11.0 million ($0.10 per share) and adjusted net income of $7.9 million ($0.08 per share). Sales reached an impressive 2.13 million barrels of oil equivalent (BOE), averaging 23,198 BOEPD—a dandy 20% jump from Q2 2024, thanks to some additional liftings in Côte d’Ivoire. Adjusted EBITDAX leaped by 28% to $92.8 million, fueled by boosted sales volumes.
The company wrapped up the quarter with $89.1 million in unrestricted cash, post-$6.6 million of dividend payments and $12.4 million in capital spending. VAALCO aims to keep expanding its West African portfolios while optimizing production in Gabon, Egypt, and Canada. And yes, they’re keeping that quarterly dividend of $0.0625 per share intact!
Ellington Credit Company (NYSE: EARN)
Ellington Credit Company, formerly known as Ellington Residential Mortgage REIT, is a closed-end fund that specializes in collateralized loan obligations (CLOs)—fancy talk for playing with debt. The company delights in acquiring, investing in, and managing mezzanine debt and equity tranches within the CLO capital structure.
In their preliminary Q4 2024 results, Ellington revealed an estimated book value per share ranged between $6.52 and $6.54, thanks to dividends of $0.24 per share. They anticipate a net loss per share of $(0.08) to $(0.06) for the quarter but expect adjusted distributable earnings between $0.26 and $0.28 per share.
Total shareholders’ equity stands at $195 million while their CLO and MBS portfolios have grown to $170 million and $510 million, respectively. Capital allocation to CLOs is on the rise, scaling up to 72% from 58% in Q3 2024—in perfect harmony with the company’s plan to transition into a CLO-centric fund by April 1, 2025.
Ameresco Inc. (NYSE: AMRC)
Ameresco, Inc. is a cleantech wizard and renewable energy asset virtuoso that specializes in energy-efficient and sustainable solutions. They’re the superheroes of infrastructure upgrades, renewable energy supply, and asset sustainability services across North America, Europe, and U.S. Federal markets.
Ameresco recently announced full-year 2024 revenues of $1.77 billion, climbing 20.7% year-over-year, powered by growth in all business areas. Their net income rose 14.6% to $56.8 million, with GAAP EPS at $1.07 and non-GAAP EPS at $1.20.
Adjusted EBITDA skyrocketed to $225.3 million, reflecting a jaw-dropping 58.7% improvement compared to last year. They successfully placed 241 MWe of energy assets into service and expanded their project backlog to $2.5 billion—nearly double what it was in 2023!
Despite facing some gross margin headaches due to pesky cost overruns, Ameresco fortified its balance sheet by trimming corporate debt down to $243.1 million and ended the year with $108.5 million in cash. Looking ahead, they’re revved and ready for growth, targeting a nearly $10 billion multi-year revenue pipeline and amplifying their clean energy initiatives.
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Conclusion
In conclusion, the seven cheap stocks highlighted in this blog post represent promising investment opportunities for March 2025.
With their potential for significant growth and favorable market conditions, these stocks could serve as a solid foundation for both seasoned investors and those new to the market.
As always, it is essential to conduct thorough research and consider individual financial goals before making any investment decisions. By carefully evaluating these options, investors can strategically position themselves for success in the evolving landscape of the stock market.
