In this article, we will discuss the 10 Cheap Stocks That Are About to Explode.
On June 30, Diana Avigdor, Portfolio Manager & Head of Trading at Barometer Capital Management, appeared on BNN Bloomberg to discuss market performance as Q2 and H1 2026 conclude. Avigdor advised that investors with well-performing portfolios should avoid the temptation to make major changes. She explained that the immediate outlook is complex due to several moving parts, including month-end, quarter-end, and semi-annual-end rebalancing. Asset allocators may sell outperforming equities to maintain specific asset allocation targets, which acts as a form of profit-taking. Additionally, upcoming market closures (Canada being closed on the following day and the US on Friday) combined with the approach of an important earnings season suggest a quiet yet potentially volatile period.
Avigdor pointed out that Q1 was extremely excellent and saw earnings exceed already high expectations. Consequently, she expressed uncertainty regarding how Q2 earnings will compare, especially considering elevated oil prices that reached $70 during the quarter. Her primary recommendation for the next 2 to 4 weeks is for investors to sit on their hands and maintain dry powder until market conditions become clearer. She expressed a desire to wait for the holiday week and current rebalancing efforts to pass. She specifically highlighted the risk posed by $200 billion in levered ETFs, which provide 3x the exposure of certain indices and could exacerbate market movements on the downside.
Our Methodology
We used screeners to identify stocks that are trading below a forward P/E of 15 and have an average upside potential of at least 50%. We limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite hedge funds.
Note: All data was sourced on June 30.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Insider Monkey’s quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
10 Cheap Stocks That Are About to Explode
10. Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR)
Average Upside Potential: 41.68%
Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR) is one of the cheap stocks that are about to explode. On June 22, Petrobras announced it had received board approval for a $1.2 billion investment to construct a new biofuels facility at the Presidente Bernardes Refinery in Cubatão, Brazil. The project, which is scheduled to begin construction by the end of 2026, is designed to produce 15,000 barrels per day of bio-jet fuel and renewable diesel, with operations expected to start in 2030.
This initiative is a core component of the company’s 2026–2030 Business Plan and aligns with Brazil’s Future Fuel Law. By focusing on renewable energy production, Petrobras aims to support international aviation standards, such as the Carbon Offsetting and Reduction Scheme for International Aviation/CORSIA, while advancing a broader energy transition strategy.
The development follows recent announcements of significant investments in the state of Amazonas, including logistics infrastructure and drilling operations at the Urucu field. These moves reflect a growing commitment to modernizing production capabilities and strengthening supply chains to meet both domestic regulatory requirements and international sustainability goals.
Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR) is involved in exploration, production, and distribution activities involving oil and gas. The company’s operations are divided into the following segments: Exploration and Production; Refining, Transportation, and Marketing; and Gas and Low Carbon Energies.
9. Amentum Holdings Inc. (NYSE:AMTM)
Average Upside Potential: 47.56%
Amentum Holdings Inc. (NYSE:AMTM) is one of the cheap stocks that are about to explode. On June 30, Amentum announced it was awarded NASA’s Consolidated Spaceflight Mission Operations and Systems/COSMOS contract through its joint venture with Aerodyne Industries, known as ASCEND. This partnership will provide critical mission operations, systems engineering, and training support to the Flight Operations Directorate at NASA’s Johnson Space Center in Houston, Texas.
Under this contract, Amentum Holdings Inc. (NYSE:AMTM) will support high-profile initiatives including the International Space Station, the Artemis program for lunar exploration, and the Orion and Space Launch System programs. The company’s expertise will facilitate astronaut and instructor training, flight controller readiness, and the development of mockup environments that replicate complex, real-world conditions for deep-space missions.
This award strengthens Amentum’s role in advancing US space exploration and technology. By delivering mission-ready systems and training solutions, the company will play a key part in NASA’s efforts to expand human access to low-Earth orbit and sustain a human presence on the lunar surface.
Amentum Holdings Inc. (NYSE:AMTM) is a business services company that specializes in engineering and technology solutions through two segments: Digital Solutions and Global Engineering Solutions.
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