DKS

3 Extremely Cheap Stocks You’ll Regret Not Buying in May

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Finding extremely cheap stocks to buy can be an enticing venture for those looking to maximize returns. As May comes to an end, the stock market presents an array of opportunities for discerning investors. 

The appeal of these companies lies in their significant growth potential and attractive valuations. This month, investors are focusing on stocks within sectors showing resilience and adaptability, such as technology, healthcare and infrastructure. By carefully selecting promising candidates, investors can capitalize on the unique opportunities that undervalued stocks have to offer.

Now, here are the best cheap stocks to buy in May 2024!

Caterpillar (CAT)

Image of a yellow construction vehicle with the Caterpillar (CAT) logo on it

Source: astudio / Shutterstock.com

Caterpillar (NYSE:CAT) renowned as the largest construction equipment manufacturer in the world is off to a great start in 2024. After delivering record FY 2023 earnings results, the company delivered impressive Q1 FY 2024 result too.

Caterpillar has established a formidable presence across the globe. The company’s robust financials, including a healthy balance sheet and strong cash flow generation, make it a compelling investment proposition. Their diversified product portfolio, ranging from heavy machinery to power systems, caters to a wide array of industries. In FY 2023, the company saw record revenue, EPS and FCF from operations. Despite slower top-line growth projected in 2024, Caterpillar delivered noteworthy bottom-line growth in the first quarter. In Q1 2024, revenue was flat due to lower sales volume and price realization. However, net earnings increased 47% YOY to $2.86 billion, or $5.75 per share. Additionally, operating margin expanded by 500 bps to 22.2%. With a forward P/E of 16.5, CAT stock remains one of the best cheap stocks to buy now.

Deere & Co (DE)

Several John Deere vehicles are parked outside of a building.

Source: Jim Lambert / Shutterstock.com

Deere & Co (NYSE:DE), another industrial giant, is synonymous with agricultural and heavy construction equipment. The company’s strong brand recognition and cheap valuation make it a strong contender for the top extremely cheap stocks to buy in May.

What makes DE stock appealing is its strong moat and the long term tailwinds of global infrastructure spending. The company is set to get a large piece of the pie, as their equipment and heavy machinery is crucial to move the world forward. Their extensive network of dealers and service centers helps ensure consumer satisfaction and brand loyalty. Moreover, their attractive dividend yield and strong dividend growth gives it a strong appeal to income-oriented investors. In FY 2023, revenue increased 16.5% YOY to $61.25 billion. Net income increased 42.56% YOY to a record $10.16 billion, or $34.63 per share. Despite lower projected growth in 2024, DE stock trailing P/E of 12 makes it a no-brainer bet on management’s ability to drive long term profitable growth.

DICK’s Sporting Goods (DKS)

Exterior of Dick's Sporting Goods retail store including sign and logo.

Source: George Sheldon via Shutterstock

DICK’s Sporting Goods (NYSE:DKS), a prominent sporting goods retailer, has capitalized on the burgeoning athleisure trend. The company’s vast selection of sporting goods, apparel, footwear and outdoor equipment has contributed to their growth over the last several years. 

Investors might sometimes be scared of investing into retailers. This is because the sector can often be highly cyclical, and be at the mercy of the global economy. However, during tough times there are some retailers that are thriving, even despite rising inflationary pressures tempering demand for non-essentials. DICK’s Sporting Goods is clearly doing something right, with their omni-channel strategy driving comparable sales growth in both online and physical stores. In FY 2023, revenue increased 5% YOY to $12.98 billion. EPS grew 13% from the year prior, with comparable sales up a modest 2.4%. The company has maintained steady growth, and recently increased its dividend by 10% to $1.10 per share. With a strong balance sheet and a trailing P/E of 15, DKS stock is set to build on its momentum in the years ahead.

On the date of publication, Terel Miles 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.

Terel Miles is a contributing writer at InvestorPlace.com, with more than seven years of experience investing in the financial markets.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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