3 Ultracheap Stocks to Buy for Big Gains


  • Wall Street tends to focus on the short-term, but there are many long-term ultracheap stocks to buy. 
  • Rivian (RIVN): Rivian could easily become even bigger and better than Tesla (TSLA). 
  • StoneCo (STNE): This Brazilian fintech player is growing rapidly but has a low valuation.
  •  EVgo (EVGO): EVGO could easily become the Exxon (XOM) of the future.
ultracheap stocks - 3 Ultracheap Stocks to Buy for Big Gains

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I generally have two methods for deciding whether stocks are ultracheap. The first method involves comparing the name’s price-earnings or price-sales ratio to its previous growth, and its expected growth in future years. Generally, if a company is growing very rapidly but its valuation is slightly above average or lower, I would view it as very cheap. Similarly, if a firm is expanding at an average rate and its valuation is way below average, I’d consider it to be ultracheap.

My second method for identifying cheap stocks involves companies that I believe have tremendous potential. Specifically, if I think that a relatively small firm can easily become the leader of its sector, I try to estimate how much its valuation would probably increase if it achieved that milestone. If I think that the shares would increase at least 300% in such a scenario, I view them as ultracheap. With that said, here are three ultracheap stocks to buy for big gains.

Rivian (RIVN)

A new Rivian R1T truck is seen at a Rivian service center in South San Francisco, California. Rivian Automotive, (RIVN) is an electric vehicle automaker. RIVN stock price predictions
Source: Tada Images / Shutterstock.com

Rivian (NASDAQ:RIVN) looks poised to become the next Tesla (NASDAQ:TSLA). And RIVN may ultimately become even more successful than Tesla!

Rivian delivered an impressive total of over 15,560 EVs last quarter, way up from 6,584 deliveries in the same period a year earlier. So the firm is clearly growing tremendously, while the demand for its EVs remains very strong. Moreover, the online reviews of its EVs range from very good to excellent, indicating that users are quite happy with their cars.

One reason why I believe that Rivian could ultimately become more successful than Tesla is that two huge companies seem to love Rivian’s EVs. Amazon (NASDAQ:AMZN) is deploying tens of thousands of Rivian delivery vans, and AT&T (NYSE:T) recently agreeing to test the start-up’s vans and trucks.

I don’t remember any large firms buying Tesla’s vehicles early in its existence, and even now, the only businesses that seem enamored with Teslas are car rental companies. By selling a large number of EVs to both consumers and companies, Rivian could, within several years, become one of the world’s largest automakers.

Even after the recent rally of RIVN stock, the shares have a market capitalization of just $21.5 billion, many times below Tesla’s $800 billion. Given that disparity, I view RIVN as one of the best ultracheap stocks to buy.

StoneCo (STNE)

Cellphone with logo of Brazilian fintech business Stone Company (StoneCo) on screen in front of website
Source: T. Schneider / Shutterstock.com

StoneCo (NASDAQ: STNE) provides financial technology and software solutions that facilitate e-commerce in Brazil.

Specializing in serving small-and-medium businesses, it already has 2.5 million customers, and its top line jumped 25% last quarter versus the same period a year earlier to roughly $630 million. The firm’s net income, excluding some items, soared 300% year-over-year to about $87 million.

Despite STNE’s rapid growth, its forward price-earnings ratio is just 15.2, which is well below the average P/E ratio of the S&P 500.

Also noteworthy is that Bank of America (NYSE:BAC) recently upgraded STNE stock, citing the company’s impressive Q3 results. The bank expects the company’s bottom line to grow at a compound annual rate of 31% between 2024 and 2027.


EVgo fast charging station
Source: Sundry Photography / Shutterstock.com

Like Rivian, EVgo (NASDAQ:EVGO) is growing very rapidly and looks poised to transform from a fairly small start-up to a huge company in the not-too distant future.

Owning and operating one of the largest networks of EV fast chargers in the U.S., EVgo’s top line soared an incredible 234% last quarter versus the same period a year earlier to $35.1 million.

Moreover, EVgo is partnering with multiple, major automakers and receiving subsidies from state governments for the construction of hundreds of EV charging stations. As a result, EVGO will have a huge network of EV chargers, while millions of EV drivers will be incentivized by automakers to use its chargers. Consequently, I expect the company to continue growing very quickly for the foreseeable future.

Meanwhile, recently agreeing with my belief that the slowdown in EV demand has been greatly exaggerated was investment bank Piper Sandler. Specifically, the firm expects EV sales to reach 33% of the U.S. market in 2025, up from about 9% currently.

EVgo should be one of the huge beneficiaries of this development. As a result, it could become the Exxon (NYSE:XOM) or the Chevron (NYSE:CVX) of the 2030s and 2040s. While operating EV chargers won’t be nearly as lucrative as selling oil, there are obviously some similarities between the two businesses.

On the date of publication, Larry Ramer held long positions in EVGO and RIVN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been SMCI, INTC, and MGM. You can reach him on Stocktwits at @larryramer.

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