If you ask anybody on the street how to accrue wealth, most would tell you to invest in the stock market. While this is good advice, it doesn’t inform you of much. For instance, how do you invest in the best stocks without going broke?
Unfortunately, it’s a little late for most people to invest in Apple, Google, and Microsoft. Buying multiple shares with any of these companies can become pricy.
Instead, new investors can benefit from finding the cheapest stocks on NYSE (New York Stock Exchange). Cheap stocks allow you to invest in starting companies.
Who knows? The company you invest in could be the next Google. So, we’ll explore how to find the cheapest stocks in the guide below!
Table of Contents
Choose a Stock Screener to Find the Cheapest Stocks on NYSE
The first step in finding cheap stocks is to find a stock screener. The majority of stockbrokers have these screeners, including those with the NYSE. These screeners let you sort stocks by several criteria.
These criteria can be quite specific. For example, you can search for stock based on their annual sales growth at certain levels.
Searching for a stock based on its current value is one of the most standard types of screening. However, you can also search by more advanced criteria by choosing high-level screeners. You can have a look at some screeners online to find the best option.
Set a Target For Your Future Growth Rate
People invest in companies for several reasons. However, most people invest in companies at least in part because they believe the stock will gain value.
The faster a company grows, the more valuable it becomes to investors. So, use your screener to find a company’s future earnings growth rate. Look for a growth rate that falls between 10% and 20%.
P/E Ratio to Find Undervalued Investments
When you look for an inexpensive company, understand “inexpensive” to mean “undervalued. Some companies have cheap stocks because they’re likely going to fail. Others, however, have cheap stocks because they haven’t reached their full notoriety.
When you search for cheap stocks, look for this second kind. You can discover undervalued companies by using the P/E ratio.
This ratio divides a stock’s current price by the annual earnings per share. The lower this ratio is, the cheaper the company’s stock will be.
Some screeners allow you to search for stocks based on their P/E ratio. Finding affordable stock can become much easier if you use this function.
Examine the Market Cap
Following the first three criteria should give you a list of several cheap stocks to purchase. However, you can narrow this list down further by setting the minimum company size. You can find this by measuring its market capitalization.
Following this approach helps you avoid riskier companies. The smaller a corporation’s market cap, the risker it is.
Find Cheap Stocks Today!
Finding the cheapest stocks on NYSE becomes much easier when you follow these tips. So, find a screener you can trust and start looking for cheap stocks today!
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