4 Cheap Growth Stocks On The Rise
Marshall Hargrave: Most investors think of the technology sector when considering growth stocks. The tech sector is full of growth stocks such as Facebook (NASDAQ: FB) and Twitter (NASDAQ: TWTR). But the most attractively priced growth stocks are off the beaten path.
Growth stocks can be great investments. But these are only great investments if the valuation is attractive. In the world of tech stocks, there are many stocks trading at extremely rich prices.
The best growth stocks are names you wouldn’t expect. When looking for cheap growth stocks that can provide superior stock price appreciation, the key is to find proven stocks that are industry leaders.
Today I’ll present five amazing and overlooked growth stocks. All of these stocks have been growing earnings at an impressive rate since 2009, and each is expected to continue growing rapidly. The best part is that these stocks are cheap considering their growth potential.
4 Cheap Growth Stocks On the Rise
Morgan Stanley (NYSE: MS)
Despite many banks being stained by the financial crisis, Morgan Stanley has avoided scandal for the most part. Thanks to its institutional securities franchise, the investment bank’s best performing segment, net revenues have grown by 7% annually over the last five years.
Going forward, Morgan Stanley is expected to grow earnings at over 25% annually for the next five years. However, it’s still trading just below book value and with a P/E to growth ratio that’s only 0.9.
Morgan Stanley also offers a 0.6% dividend yield and it’s only a 15% payout. The company’s balance sheet is clean, with cash equal to 20% of the company’s market capitalization. This leaves plenty of room for increasing its dividend in the future.
Freeport-McMoRan Copper & Gold (NYSE: FCX)
Freeport-McMoRan offers investors the double whammy of investing — income and growth. The world’s largest low-cost molybdenum producer offers investors a dividend yielding 4% and Wall Street expects Freeport to grow earnings at nearly 30% annually over the next five years.
But wait, the story gets even better. Freeport is trading at only 10 times earnings expectations for 2015, putting its PEG ratio at a mere 0.4.
Driving its robust growth expectations is Freeport’s initiative to move beyond the mining space and into the energy sector. Its 2013 acquisitions of Plains Exploration and McMoRan Exploration makes Freeport a force to be reckoned with in the natural resource space. It’s now a copper miner, with oil production (Plains) and natural gas drilling assets (McMoRan).