5 Hot Dirt-Cheap Growth Stocks To Buy Now

As we all know, growth has been hot for the last few years.

But what if you could find a growth stock that was growing its revenue by the double digits, but that was also cheap?

A growth stock that is also a value stock.

Does such a unicorn stock exist?

Growth and value is a powerful combination. Surely, the Street would be gobbling up these stocks if they were out there.

How to Screen for Cheap Growth Stocks

It’s not easy to screen for companies that have strong revenue growth in addition to other solid fundamentals.

First, if you’re going to screen for a unicorn, you might as well find one that is also seeing rising earnings estimates. The first component of the screen is stocks that are Zacks Rank #1 (Strong Buys).

That will make this a narrow screen as there are only just 229 Zacks Rank #1 (Strong Buy) stocks right now.

Then, to find growth, you can add the Zacks Growth Style Score of A, which is the top score.

You can screen for revenue growth by comparing this year’s and taking the difference with next year.

To keep out the micro caps, add average volume over 100,000 shares.

And finally, to find the “cheap” aspect, screen for companies with a forward P/E under 15.

This screen returned 13 dirt-cheap growth stocks, even with the narrow requirements.

5 Hot Dirt-Cheap Growth Stocks to Buy Now

1.       MI Homes, Inc. (MHO - Free Reportis a small-cap home builder which is trading with a forward P/E of just 7. Sales are expected to grow 10.5% this year as housing demand exploded higher due to the COVID pandemic and the low mortgage rates. Shares are up 17% year-to-date but earnings are expected to rise 36.7% this year.

2.       Meritage Homes (MTH - Free Reportis a mid-cap home builder whose shares have soared 70% year-to-date as housing demand has remained strong. Sales are expected to jump 16.4% this year. Yet it remains dirt cheap with a forward P/E of just 11.

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Disclaimer: Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the  more

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