In this article, we will look at the 13 Cheap Stocks with Huge Upside Potential.
On July 11, Jurrien Timmer, Fidelity Investments’ director of global macro, appeared on CNBC’s ‘Squawk Box’ to talk about the state of the equity market.
He stated that the episode of the last six months showed just how brutally efficient the price discovery process is, in any market but especially the US stock market. The market saw a right tail scenario after the election to a moderately left tail scenario in April, and back to a right tail scenario in July.
READ ALSO: 13 Best Healthcare Stocks to Buy Under $10 and 10 Cheap Large Cap Stocks to Buy According to Hedge Funds.
While he acknowledged that it is difficult to predict which shape the tariff tantrum will take, markets are overall adopting a wait-and-see attitude after the continuous back-and-forth lurching. Timmer further stated that there is a good chance for the earnings numbers to go back up again, and that the overall health of the market is pretty good.
With these positive trends in view, let’s look at the 13 cheap stocks with huge upside potential to add to your portfolio.
A view of a financial trading floor with multiple traders observing stock market performance.
Our Methodology
We used Finviz to make a list of stocks with a forward P/E below 15 and selected the top 13 with the highest analyst upside potential. We also added the number of hedge fund holders for each stock as of Q1 2025, sourcing the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of analyst upside potential.
Note: All data was recorded on July 11.
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. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
13 Cheap Stocks with Huge Upside Potential
13. Novavax Inc. (NASDAQ:NVAX)
Analyst Upside: 40.85%
Forward P/E: 3.49
Number of Hedge Fund Holders: 26
Novavax Inc. (NASDAQ:NVAX) is one of the best cheap stocks with huge upside potential. On June 11, BTIG maintained a Buy rating on Novavax Inc. (NASDAQ:NVAX) with a $19 price target.
BTIG analyst Thomas Shrader told investors following the company’s announcement of the results of the initial cohort of its COVID-19-Influenza Combination and stand-alone trivalent hemagglutinin nanoparticle seasonal influenza Phase 3 trial that the primary goal was to exhibit that the immunogenicity of both the COVID-19 and Influenza vaccines was within the protective range with “interference” not being a strong factor.
He stated that the first CIC data “looks unremarkable – exactly what we hoped for,” adding that the “most positive signs from today’s data” were stronger immunogenicity for the Novavax flu vaccine for some antigens compared to the “gold-standard” flu vaccine FLUZONE-HD.
Novavax Inc. (NASDAQ:NVAX) is a biotechnology company that discovers, develops, and commercializes recombinant vaccines.
12. PRA Group, Inc. (NASDAQ:PRAA)
Analyst Upside: 41.63%
Forward P/E: 9.2
Number of Hedge Fund Holders: 22
PRA Group, Inc. (NASDAQ:PRAA) is one of the best cheap stocks with huge upside potential. On May 6, Citizens JMP lowered the firm’s price target on PRA Group, Inc. (NASDAQ:PRAA) to $23 from $30, keeping an Outperform rating on the shares.
The firm reasoned that the company’s positive directional and operational trends in fiscal Q1 2025 were very similar to its operations over the past year. This includes the considerable strength in Europe, strong purchase volumes, improving margins, double-digit collections, and cash earnings growth.
However, the firm also told investors in a research note that the lower-than-expected US collections resulted in a material earnings shortfall. Citizens JMP still believes that PRA Group, Inc. (NASDAQ:PRAA) is enjoying a “sweet spot” in the purchasing and collections cycle, which is characterized by stable employment and collections backdrop, increased supply of charge-offs, excess funding, and weakened competition overseas.
PRA Group, Inc. (NASDAQ:PRAA) is involved in the purchase, collection, and management of portfolios of nonperforming loans in two broad categories: Core and Insolvency. The company also provides fee-based services on class action claims recoveries.
