Investing in stocks, in its simplest form, is about finding cheap stocks to buy and selling them once they’re at higher prices. The stock market has been volatile in 2022, and chances are it will remain that way throughout the year. After the fears of rising interest rates, we now face the risk of a recession.
Cheap stocks are suitable in this context, as they can rally when the broader investor sentiment is positive; that means investors are pouring capital into the market, beating inflation and generating some nice returns.
The following cheap stocks to buy in July 2022 have attractive prices and key financial ratios like price-to-earnings, price-to-earnings growth, and price-to-sales. Check them out if you are interested in picking up some very attractive and cheap stocks with strong fundamentals.
|GIII||G-III Apparel Group||$20.36|
|TMHC||Taylor Morrison Home||$23.37|
Olympic Steel (ZEUS)
Olympic Steel (NASDAQ:ZEUS) is a steel company founded in 1954. Its steel products include flat-rolled metals, tube, pipe and bar products, hot-rolled plates, and specialty metals.
Olympic Steel’s stock has performed admirably this year, with gains of about 9% in 2022. It trades at a trailing 12 months P/E ratio of 2.2, and analysts have a price target of $43.75, or potential gains of 70%.
Compared to the materials sector forward P/E of 10.4, shares of Olympic Steel are trading at a forward P/E of 3.3. ZEUS stock also has a forward enterprise value-to-sales ratio of 0.26 and a forward price-to-sales ratio of 0.12.
In 2021 sales growth surged 87.36% to $2.31 billion and the company reported massive improvement in net income from a loss of $5.6 million to a profit of $121.05 million.
M/I Homes (MHO)
M/I Homes (NYSE:MHO) is a home builder founded in 1976. The firm has built more than 140,000 homes in 16 markets. M/I Homes touts its homes as being sustainable and energy- and water-efficient.
MHO stock has losses of nearly 37% in 2022 presenting a nice investment opportunity now as they trade at a trailing P/E ratio of 3.
Compared to the consumer discretionary sector forward P/E of 12, shares of M/I Homes are trading at a forward P/E of 2.4. The MHO stock also has a PEG ratio of 0.08, a forward EV-sales ratio of 0.43, and a forward price-to-book ratio of 0.54.
The company has had double-digit sales growth in 2020 and 2021, at 21.88% and 22.89% respectively and profitability is equally robust. In 2021 net income growth was 65.45% to $396.87 million.
Analysts are highly bullish on MHO stock, with a one-year target of $85.50, representing potential gains of 116%.
G-III Apparel Group (GIII)
G-III Apparel Group (NASDAQ:GIII) has a diverse portfolio of more than 30 fashion brands both for women’s and men’s fashion and accessories. It owns brands like DKNY, Karl Lagerfeld Paris, Donna Karan and licensed brands such as Calvin Klein, Tommy Hilfiger, Cole Haan and Dockers, among others.
You can get now shares of G-III Apparel Group at a discount as they have fallen approximately 27% year-to-date. The shares trade at a P/E ratio of 5.
GIII stock has a trailing PEG ratio of 0.04, a forward price-to-sales ratio of 0.31, and a forward price-to-book ratio of 0.59.
Sales growth in fiscal year 2022 rebounded to $2.77 billion after a decline of 34.97% in FY 2021. The company is profitable with a net income of $200.59 million in FY 2022, the highest amount tin the past five years, and amazing growth of 751.96%. The firm is also generating strong positive free cash flows.
All these factors will help it reach the target price of $33.40, a gain of 64%.
Lazydays Holdings (LAZY)
Lazydays Holdings (NASDAQ:LAZY) is a recreational vehicles dealer founded in 1976 that sells and services RVs. The firm has a plethora of RV brands from leading manufacturers and accessories and parts covering all the needs of an RV owner.
Shares of Lazydays Holdings have declined about 46% in 2022 and now trade at a very low trailing P/E ratio of 2.7.
Compared to the consumer discretionary sector forward P/E of 12, shares of Lazydays Holdings trade at a forward P/E of 3.1. The stock has a forward P/S ratio of 0.12 and a forward EV/S ratio of 0.37.
Sales and net income growth have both been positive and have accelerated in the past two consecutive years. In 2021, sales grew 51.15% to $1.24 billion and net income growth was 365.98% to $55.28 million.
The 1-year target of $20.50 represents potential gains of 74%.
Meritage Homes (MTH)
Meritage Homes (NYSE:MTH) has built homes since 1985. It has delivered more than 145,000 homes across nine states.
MTH stock has lost nearly 41% of its value in 2022. This is not a contrarian play, though — it’s just a good, cheap stock. The trailing P/E ratio of 3.5 is very low.
The stock has a target price of $110.22 for an upside potential of nearly 51%. With net income growth of 69.62% in 2020 and 74.14% in 2021 and earnings per share increasing from $11 in 2020 to $19.29 in 2021 this stock is not a value trap. It delivers massive EPS growth.
The stock has a trailing PEG ratio of 0.05 and a forward price-to-sales ratio of 0.4.
This is a definition of a very cheap stock with strong fundamentals.
Taylor Morrison Home (TMHC)
Taylor Morrison Home (NYSE:TMHC) is a home builder covering several major U.S. markets like Atlanta, Tampa, Denver, Houston, Orlando and Seattle among many others. You’ve probably noticed that this is the third home builder stock in this list of cheap stocks to buy. It’s often easy to find cheap stocks in the residential construction industry.
Having lost nearly 36% of its value in 2022, TMHC stock has many similarities to the other home builder companies. The trailing P/E ratio of 4 is very low and is the first signal of a cheap stock.
The shares have a trailing PEG ratio of 0.04, a forward P/B ratio of 0.56 and a forward P/S ratio of 0.3.
Sales growth is robust, as in 2021 it was 22.38% after growing another 28.71% in 2020.
The firm is a net income generator, which is very bullish. In 2021, net income grew 172.36% to $663.03 million. The free cash flow trend is positive but highly volatile. This stock could hit its target of $34.25, for gains of about 47%. It has sales, net profit and valuation in its favor.
Unum Group (UNM)
Unum Group (NYSE:UNM) is an insurance company offering services like financial protection from disability, accident and critical illness and covering hospital, vision and dental costs. The stock has gained nearly 38% in 2022 and it’s very possible this momentum will continue.
There’s much to like about Unum, starting with the trailing P/E ratio of 7.5 and add a forward dividend yield of 3.5%.
There is more good news. Check the trailing PEG ratio of 0.44 and the forward P/S ratio of 0.57.
Then look at the profitability trend. In 2019, 2020 and 2021 Unum Group reported net income of $1.1 billion, $793 million and $824.2 million respectively. The insurance company has steadily increased its dividend almost every year besides 2021. This is great news.
UNM stock has been resilient to the stock market sell-off and can keep moving higher. The forward P/B ratio of 0.61 signals a bargain stock now. Take a closer look at it.
On the date of publication, Stavros Georgiadis, CFA did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.