In this article, we will look at the 14 Best Cheap Stocks to Buy for Beginners.
On September 11, Rich Saperstein, Treasury Partners’ founding principal and CIO, appeared on CNBC’s ‘Closing Bell’ to talk about how he’s advising his clients and much more.
He holds a bullish outlook and is invested in equities, stating that the current environment reinforces the benefits of holding stocks at this time. Inflation is moderating, the Fed is being accommodating, and the market saw a great Q2, GDP, and earnings.
READ ALSO: 13 Best Growth Stocks Under $50 to Buy Now and 10 Best Airport and Air Services Stocks to Buy.
Saperstein further stated that next year, we are going to have the benefits of deregulation, tax policy, and ease of permitting. Stocks, therefore, are at an all-time high to reflect a lot of the benefits in the investment climate, according to him.
He added that his clients are “fully invested” with an overweight in large-cap technology right now.
With these trends in view, let’s look at the best cheap stocks to buy for beginners.
Our Methodology
We sifted through ETFs and financial media reports to compile a list of the best beginner-friendly stocks with a forward P/E below 20. We then selected companies with a 10-year revenue CAGR of 7% to 15% (high single digits to mid-teens is our definition of a mature and reliable grower), which were the most popular among elite hedge funds, as of Q2 2025.
Note: All data was sourced on September 10.
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).
14 Best Cheap Stocks to Buy for Beginners
14. Royal Bank of Canada (NYSE:RY)
Forward P/E: 14.32
10-Year Revenue Growth: 6.97%
Number of Hedge Fund Holders: 28
Royal Bank of Canada (NYSE:RY) is one of the best cheap stocks to buy for beginners. On September 5, CIBC downgraded Royal Bank of Canada (NYSE:RY) to Neutral from Outperform, keeping the price target the same at C$208. The analyst noted that the firm considers consensus estimates for the sector “conservative”, and believes that the Canadian banks can continue to beat expectations.
However, Matthew Lee from Canaccord Genuity maintained a Buy rating on Royal Bank of Canada (NYSE:RY) on September 4, keeping the price target at C$219.00. Royal Bank of Canada (NYSE:RY) has an analyst consensus of Strong Buy.
Royal Bank of Canada (NYSE:RY) provides banking and financial services. The company’s operations are divided into the following segments: Personal and Commercial Banking, Wealth Management, Insurance, Capital Markets, and Corporate Support.
13. Stifel Financial Corp. (NYSE:SF)
Forward P/E: 15.59
10-Year Revenue Growth: 8.46%
Number of Hedge Fund Holders: 31
Stifel Financial Corp. (NYSE:SF) is one of the best cheap stocks to buy for beginners. On August 29, TD Cowen analyst William Katz maintained a Hold rating on Stifel Financial Corp. (NYSE:SF) and set a price target of $118.00.
Similarly, in a report released on July 31, Michael Cho from J.P. Morgan maintained a Hold rating on Stifel Financial Corp. (NYSE:SF), setting a price target of $125.00.
However, Citi upgraded Stifel Financial Corp. (NYSE:SF) to Buy from Neutral the same day, raising the price target to $135 from $115.
Stifel Financial Corp. (NYSE:SF) has an analyst consensus of Moderate Buy, and the stock’s median price target of $113.12 implies an upside of 12.71% from current levels.
Stifel Financial Corp. (NYSE:SF) provides investment banking, securities brokerage, investment advisory, trading, and related financial services. The company’s operations are divided into the following segments: Global Wealth Management, Institutional Group, and Other.
12. TD SYNNEX Corporation (NYSE:SNX)
Forward P/E: 12.37
10-Year Revenue Growth: 15.82%
Number of Hedge Fund Holders: 36
TD SYNNEX Corporation (NYSE:SNX) is one of the best cheap stocks to buy for beginners. In a report released on September 5, Joseph Cardoso from J.P. Morgan maintained a Hold rating on TD SYNNEX Corporation (NYSE:SNX), setting a price target of $160.00.
TD SYNNEX Corporation (NYSE:SNX) announced on September 3 that it signed a strategic collaboration agreement with Amazon Web Services (AWS) designed to accelerate cloud migration and modernization, AI adoption, and marketplace growth across Latin America, North America, and the Caribbean.
TD SYNNEX Corporation (NYSE:SNX) is involved in the aggregation and distribution of solutions in the IT ecosystem, with its offerings including IT hardware, software, and systems. The company’s operations are divided into the following geographical segments: Americas, Europe, and Asia-Pacific and Japan.
11. Everest Group, Ltd. (NYSE:EG)
Forward P/E: 7.24
10-Year Revenue Growth: 11.66%
Number of Hedge Fund Holders: 38
Everest Group, Ltd. (NYSE:EG) is one of the best cheap stocks to buy for beginners. On September 4, Everest Group, Ltd.’s (NYSE:EG) insurance division Everest Insurance announced the launch of EverBuild™, which is an “enhanced Builder’s Risk coverage form”.
Management reported that the new offering highlights Everest Group, Ltd.’s (NYSE:EG) long-standing commitment to the construction industry with specialized and innovative solutions and focus on crafting coverage solutions evolving with the needs of its clients. William Hazelton, President, North America Insurance at Everest Group, Ltd. (NYSE:EG), stated the following about the announcement:
“We have built this form to provide clarity, flexibility, and resilience for today’s construction challenges, to support our clients as a trusted partner.”
Everest Group, Ltd. (NYSE:EG) provides reinsurance and insurance services. The company operates through the following segments: Reinsurance and Insurance.
10. ICON Public Limited Company (NASDAQ:ICLR)
Forward P/E: 13.42
10-Year Revenue Growth: 17.93%
Number of Hedge Fund Holders: 42
ICON Public Limited Company (NASDAQ:ICLR) is one of the best cheap stocks to buy for beginners. On September 9, Jefferies analyst David Windley downgraded ICON Public Limited Company (NASDAQ:ICLR) to Hold from Buy, bringing the price target down to $175 from $220.
The firm told investors in a research note that it now sees “too many headwinds” for ICON Public Limited Company (NASDAQ:ICLR) to keep recommending the shares, and while the stock is “cheap”, another guidance cut may be forthcoming.
The firm’s channel checks are continually reflecting wallet share losses for ICON Public Limited Company (NASDAQ:ICLR), which, according to Jefferies, is undermining momentum from the four partnership wins since the PRA Health merger.
It added that customer cancellations are likely near $1 billion in the third quarter, and may remain high in Q4.
ICON Public Limited Company (NASDAQ:ICLR) is a clinical research organization that provides outsourced development services to the biotechnology, pharmaceutical, and medical device industries.
It specializes in managing, developing, and analyzing programs that support clinical development. The company operates in Ireland, the Rest of Europe, the US, and Other geographical segments.
9. ONEOK, Inc. (NYSE:OKE)
Forward P/E: 13.16
10-Year Revenue Growth: 10.94%
Number of Hedge Fund Holders: 44
ONEOK, Inc. (NYSE:OKE) is one of the best cheap stocks to buy for beginners. In a report released on September 8, Jean Ann Salisbury from Bank of America Securities reiterated a Buy rating on ONEOK, Inc. (NYSE:OKE) and set a price target of $109.00.
The analyst based the optimistic rating on the company’s growth potential and strategic positioning, stating that management’s detailed explanation of the synergy potential stemming from recent deals reflects focus on high-return projects and cost reduction.
The synergies, expected to fall between $600 million to $1.15 billion, include considerable infrastructure connections and insurance savings that are anticipated to boost operational efficiency and bring costs down.
ONEOK, Inc. (NYSE:OKE) gathers, fractionates, processes, transports, stores, and markets natural gas. The company’s operations are divided into the following segments: Natural Gas Gathering and Processing, Natural Gas Liquids, and Natural Gas Pipelines.
8. International Flavors & Fragrances Inc. (NYSE:IFF)
Forward P/E: 15.57
10-Year Revenue Growth: 13.91%
Number of Hedge Fund Holders: 45
International Flavors & Fragrances Inc. (NYSE:IFF) is one of the best cheap stocks to buy for beginners. On September 8, Wolfe Research upgraded International Flavors & Fragrances Inc. (NYSE:IFF) to Peer Perform from Underperform without assigning a price target.
The firm told investors in a research note that International Flavors & Fragrances Inc.’s (NYSE:IFF) current risk/reward warrants a less negative stance, adding that various facets of the firm’s previously bearish thesis have played out.
It believes that investors now have an understanding of the long-term risks the food ingredients companies are facing.
International Flavors & Fragrances Inc. (NYSE:IFF) manufactures and supplies fragrances and flavors used in the beverage, household products, food, and personal care industries.
The company’s operations are divided into the following segments: Nourish, Health & Biosciences, Scent, and Pharma Solutions.
7. Coterra Energy Inc. (NYSE:CTRA)
Forward P/E: 9.43
10-Year Revenue Growth: 14.20%
Number of Hedge Fund Holders: 45
Coterra Energy Inc. (NYSE:CTRA) is one of the best cheap stocks to buy for beginners. On September 5, Siebert Williams Shank & Co. analyst Gabriele Sorbara maintained a Buy rating on Coterra Energy Inc. (NYSE:CTRA) and set a price target of $35.00.
Coterra Energy Inc. (NYSE:CTRA) reported its fiscal Q2 2025 results on August 4, with total BOE (barrels of oil equivalent) and natural gas production for the quarter surpassing the high-end of its guidance ranges, while oil volumes beat the midpoint by around 2%.
The company raised its full-year 2025 total equivalent and natural gas production guidance, maintaining the oil production midpoint.
Coterra Energy Inc. (NYSE:CTRA) is a diversified energy company involved in the development, exploration, and production of natural gas and oil properties. The company’s portfolio includes projects in the Permian Basin, the Marcellus Shale, and the Anadarko Basin.
6. Arch Capital Group Ltd. (NASDAQ:ACGL)
Forward P/E: 11.29
10-Year Revenue Growth: 16.64%
Number of Hedge Fund Holders: 46
Arch Capital Group Ltd. (NASDAQ:ACGL) is one of the best cheap stocks to buy for beginners. In a report released on September 8, David Motemaden from Evercore ISI maintained a Hold rating on Arch Capital Group Ltd. (NASDAQ:ACGL) and set a price target of $97.00.
The same day, Arch Capital Group Ltd. (NASDAQ:ACGL) announced that its Board of Directors raised the “authorization for its existing share repurchase program by $2.0 billion, which, as in the past, may be effected from time to time in open market or privately negotiated transactions.”
Management reported that after accounting for the recent share repurchases in Q3 2025 and the increased authorization, around $2.3 billion of share repurchases are available under the program as of Sept. 4, 2025.
Arch Capital Group Ltd. (NASDAQ:ACGL) provides property and casualty insurance and reinsurance lines. The company’s operations are divided into the following segments: Insurance, Reinsurance, Mortgage, Corporate, and Other.
5. Amgen Inc. (NASDAQ:AMGN)
Forward P/E: 13.42
10-Year Revenue Growth: 7.52%
Number of Hedge Fund Holders: 62
Amgen Inc. (NASDAQ:AMGN) is one of the best cheap stocks to buy for beginners. In a report released on September 5, Vamil Divan from Guggenheim maintained a Hold rating on Amgen Inc. (NASDAQ:AMGN), setting a price target of $288.00.
Amgen Inc. (NASDAQ:AMGN) reported its fiscal Q2 2025 earnings on August 5, with t0tal revenues increasing 9% to $9.2 billion compared to Q2 2024. GAAP earnings per share (EPS) rose 92% from $1.38 to $2.65, primarily attributed to higher revenues.
Amgen Inc. (NASDAQ:AMGN) is a biotechnology company that discovers, develops, manufactures, and markets human therapeutics. It delivers new therapies for patients with complex cancers, especially in areas with significant unmet needs.
4. D.R. Horton, Inc. (NYSE:DHI)
Forward P/E: 15.58
10-Year Revenue Growth: 13.06%
Number of Hedge Fund Holders: 64
D.R. Horton, Inc. (NYSE:DHI) is one of the best cheap stocks to buy for beginners. Wells Fargo analyst Sam Reid raised the firm’s price target on D.R. Horton, Inc. (NYSE:DHI) to $190 from $175 on September 2, keeping an Overweight rating on the shares.
The firm told investors that it adjusted price targets in the homebuilding group, raising valuations across the board after the recent re-rating of stocks.
It stated that generalists are doing more work on the group, and investors are pricing in some forward optimism on interest rates.
D.R. Horton, Inc. (NYSE:DHI) is involved in the sale and construction of single-family housing. The company’s operations are divided into the following geographical segments: Northwest, Southwest, South Central, Southeast, East, and North.
3. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)
Forward P/E: 14.18
10-Year Revenue Growth: 15.39%
Number of Hedge Fund Holders: 73
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) is one of the best cheap stocks to buy for beginners. In a report released on September 8, Evan Seigerman from BMO Capital maintained a Buy rating on Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN), setting a price target of $640.00.
The analyst cited various factors supporting the optimistic outlook, including the promising results from its recent Phase 3 trials for the cat and birch allergy antibody cocktails.
The data showed considerable symptom reductions, such as skin prick reactivity, ocular itch, and conjunctival redness. Patients with cat allergies driven by the FelD1 allergen exhibited especially strong results.
According to Seigerman, these results suggest robust clinical efficacy with the potential to address a considerable unmet need in allergy treatment.
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) is a pharmaceutical company that develops, discovers, and commercializes therapies for several diseases, including cancer, eye disorders, and allergic conditions.
It has relied on two primary products to drive top-line growth in the past years: Dupixent and Eylea. Dupixent is an eczema treatment whose rights Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) shares with Sanofi. Eylea, which Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) comarkets with Bayer, treats wet age-related macular degeneration.
2. Merck & Co., Inc. (NYSE:MRK)
Forward P/E: 9.53
10-Year Revenue Growth: 7.70%
Number of Hedge Fund Holders: 92
Merck & Co., Inc. (NYSE:MRK) is one of the best cheap stocks to buy for beginners. On September 10, Leerink Partners analyst Daina Graybosch maintained a bullish stance on Merck & Co., Inc. (NYSE:MRK), giving the stock a Buy rating.
The analyst gave the optimistic rating due to Merck & Co., Inc.’s (NYSE:MRK) strategic position in the competitive landscape of antibody-drug conjugates (ADCs) to treat extensive-stage small cell lung cancer (ES-SCLC).
The recent update from the World Conference on Lung Cancer exhibited Merck’s I-DXd as the holder of considerable first-to-market advantage, attributed to the more globally diverse and larger patient population in Merck & Co., Inc.’s (NYSE:MRK) studies. According to the analyst, this supports their plans for accelerated approval.
Merck & Co., Inc. (NYSE:MRK) is a biopharmaceutical company that delivers health solutions to advance the treatment and prevention of diseases in animals and people.
Its Pharmaceutical segment offers vaccines and human health pharmaceutical products, typically therapeutic and preventive agents. Its Animal Health segment develops, discovers, manufactures, and markets a range of vaccines and veterinary pharmaceutical products.
1. Capital One Financial Corporation (NYSE:COF)
Forward P/E: 12.76
10-Year Revenue Growth: 9.18%
Number of Hedge Fund Holders: 132
Capital One Financial Corporation (NYSE:COF) is one of the best cheap stocks to buy for beginners. In a report released on September 10, Sanjay Sakhrani from KBW maintained a Buy rating on Capital One Financial Corporation (NYSE:COF) with a price target of $260.00.
In its fiscal Q2 2025 results, Capital One Financial Corporation (NYSE:COF) announced net loss of $4.3 billion compared with net income of $1.4 billion in the first quarter of 2025. Adjusted net income for the quarter was $5.48 per diluted common share.
Capital One Financial Corporation (NYSE:COF) provides financial products and services. The company’s operations are divided into the the following segments: Credit Card, Consumer Banking, and Commercial Banking.
While we acknowledge the potential of COF to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than COF and that has 100x upside potential, check out our report about this cheapest AI stock.
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