Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

How to Screen for Cheap Growth Stocks

By Zacks Investment ResearchStock MarketsMay 20, 2021 01:44AM ET
How to Screen for Cheap Growth Stocks
By Zacks Investment Research   |  May 20, 2021 01:44AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

Welcome to Episode #236 of the Value Investor Podcast

Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.

With the market weakness, especially in the NASDAQ, hitting the growth stocks yet again, it’s time for value investors to poke around in the carnage to see if there are any deals.

Perhaps some growth stocks are now values?

But how do you find them?

Screening for Cheap Growth Stocks

It shouldn’t be a surprise, that one way to screen for growth AND value is using the PEG ratio.

The PEG ratio was a favorite of Benjamin Graham (NYSE:GHM), considered the father of value investing.

The PEG is the forward P/E divided by the long-term growth consensus estimate.

A PEG under 1.0 usually indicates value.

Additionally, adding the Zacks Ranks of #1 (Strong Buy) and #2 (Buy) should give you companies with rising earnings estimates.

If you want to get more value, adding a P/B ratio under 3.0 will narrow it further.

This screen produced 67 stocks, which means you’ll have a big selection of cheap growth stocks to go through.

5 Cheap Growth Stocks with High Zacks Rank

1. Vishay Intertechnology (NYSE:VSH) VSH is one of the world’s largest manufacturers of discrete semiconductors and passive components. It’s cheap, with a forward P/E of just 10.7. Earnings are expected to soar 135% in 2021. That gives it a PEG ratio of just 0.5.

2. PulteGroup (NYSE:PHM) PHM is one of the largest home builders in the United States. This Zacks Rank #1 (Strong Buy) is trading with a forward P/E of just 7.3 even though shares are up 30% year-to-date. After a strong 2020, earnings are expected to jump another 47% in 2021. Are the home builders too cheap to ignore?

3. Lumber Liquidators (NYSE:LL) LL is the largest specialty retailer of hardwood floors in America. Shares have fallen 25% year-to-date which has pushed it into “value” territory. It has a PEG ratio of just 0.8. Are these shares on sale?

4. ManpowerGroup (NYSE:MAN) MAN is a global staffing company which has a P/B ratio of just 2.8. Earnings are expected to soar 67.9% and revenue is forecast to rise 14% in 2021. It has a PEG ratio of just 0.9. Will the staffing companies be the big 2021 winners?

5. Huntsman (NYSE:HUN) Corp. HUN is a specialty chemical company. As the global economy reopens, earnings are expected to jump 176% in 2021. It remains dirt cheap, with a PEG ratio of just 0.2. The company recently raised its dividend 15%. It now yields 2.5%. Is there more room to run for the industrial companies?

What else do you need to know about finding cheap growth stocks?

Tune into this week’s podcast to find out.

Legal Marijuana: An Investor’s Dream

Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.

Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.

Download Marijuana Moneymakers FREE >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

ManpowerGroup Inc. (MAN): Free Stock Analysis Report

PulteGroup, Inc. (PHM): Free Stock Analysis Report

Lumber Liquidators Holdings, Inc (LL): Free Stock Analysis Report

Huntsman Corporation (HUN): Free Stock Analysis Report

Vishay Intertechnology, Inc. (VSH): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research
How to Screen for Cheap Growth Stocks

Related Articles

How to Screen for Cheap Growth Stocks

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email