We recently compiled a list of the 10 Cheap Growth Stocks to Buy Now. In this article, we are going to take a look at where VAALCO Energy, Inc. (NYSE:EGY) stands against the other cheap growth stocks.
Growth stocks—those of companies expected to grow at an above-average rate compared to other firms—have historically exhibited cyclical performance patterns. For instance, during the 1990s dot-com era, growth stocks did well, as reported by Hartford Funds.
From 2014 to 2024, growth stocks surged ahead of other market segments, with the Russell Growth Index delivering an annualized return of 17%. This return was more than double that of value stocks (8%), small-cap stocks (8%), and international equities (5%). The broader market, which itself has been heavily influenced by large-cap tech companies, delivered a 13% annualized return. This further amplifies the performance of growth-oriented investments.
This growth-driven rally had profound effects on the composition of traditionally balanced portfolios. A standard 60/40 portfolio (60% equities, 40% bonds) that was left untouched over this period would have seen its growth stock allocation more than double from 20% to 42%, crowding out other investment segments.
As financial markets navigate a stabilizing interest rate environment and moderating inflation, investors are revisiting growth equities with renewed focus. Cheap growth stocks have reemerged as a strategic play in 2025. With the Federal Reserve pausing its tightening cycle and inflation cooling to 2.9% (down from 2022’s 9.1% peak), the macroeconomic landscape now favors selective risk-taking.
Analysts suggest that stocks with a price-to-earnings (P/E) ratio below 15x often present attractive investment opportunities. These stocks may offer a combination of growth potential, driven by strong revenue and earnings expansion, as well as resilience, enabling them to perform well even in uncertain macroeconomic conditions.
As Charlie Munger aptly said, “All intelligent investing is value investing—acquiring more than you are paying for. You must value the business in order to value the stock.” This mindset aligns perfectly with identifying companies with lower P/E ratios, where the value they offer can outweigh the price being paid. Given this, we will take a look at some of the best cheap growth stocks to invest in.
Our Methodology
To compile a list of the 10 Cheap Growth Stocks to Buy Now, we first utilized Finviz stock screener to identify US companies with a Price-to-Earnings (P/E) ratio of 15 or lower and an implied sales growth of over 20% over the last five years. From this selection, we then ranked the stocks according to their P/E ratio.
At Insider Monkey, we are obsessed with hedge funds. 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).
A busy oil & gas rig on the horizon, revealing the depths of the Etame Marin block’s activity.
VAALCO Energy, Inc. (NYSE:EGY)
Price to Earnings ratio: 4.39
VAALCO Energy, Inc. (NYSE:EGY) is an independent energy company engaged in the exploration, development, and production of crude oil, natural gas, and natural gas liquids across multiple regions. EGY is one of the best cheap growth stocks to invest in.
VAALCO Energy, Inc. (NYSE:EGY) has strengthened its West African portfolio with the strategic acquisition of a 70% working interest and operatorship in offshore Block CI-705 in Côte d’Ivoire. The newly acquired block, spanning approximately 2,300 square kilometers in the prolific Tano Basin, is positioned near existing infrastructure and recent hydrocarbon discoveries. This enhances its development potential. The company plans to undertake comprehensive geological and geophysical studies, including seismic reprocessing, to assess the prospectivity of the asset. The company anticipates drilling up to two exploration wells as part of its long-term growth strategy.
VAALCO Energy, Inc. (NYSE:EGY) delivered strong operational results in Q3 2024, with net income reaching $11.0 million and Adjusted net income of $7.9 million. The company reported net revenue interest sales of 2.13 million barrels of oil equivalent, averaging 23,198 barrels of oil equivalent per day, up 20% from Q2 2024. Adjusted EBITDAX increased 28% to $92.8 million, reflecting higher sales, while production expenses dropped 33% to $19.80 per barrel of oil equivalent, reaching the low end of guidance.
Overall EGY ranks 10th on our list of the cheap growth stocks to buy now. While we acknowledge the potential of EGY as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than EGY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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