2 dirt cheap growth stocks for investors to consider this June

Looking for great growth stocks at knock-down prices? Royston Wild discusses a top mining stock and a banking business that look dirt cheap.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Fireworks display in the shape of willow at Newcastle, Co. Down , Northern Ireland at Halloween.

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

UK share prices have risen strongly in recent weeks and months. But there are still many great growth stocks trading well below value.

Here are two I think are worth serious consideration by savvy investors.

Copper play

Base metals miner Central Asia Metals (LSE:CAML) looks dirt cheap across a variety of metrics.

Should you invest £1,000 in B&M right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if B&M made the list?

See the 6 stocks

City analysts think earnings will soar 27% year on year in 2024. And so the company — which owns a copper plant in Kazakhstan and a lead-zinc property in North Macedonia — trades on a forward price-to-earnings (P/E) ratio of 10.2 times.

It also deals on a price-to-earnings growth (PEG) ratio of 0.4. A reading below 1 indicates that a share is undervalued.

Finally, Central Asia Metals carries a huge 8.2% dividend yield for 2024.

Created with Highcharts 11.4.3Central Asia Metals Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

The miner’s bright earnings forecasts are underpinned by a strong outlook for copper prices. The red metal has given up some gains more recently, but is still up significantly this year at around $10,000 per tonne, thanks to favourable demand and supply dynamics.

There may be more bumps in the road for copper prices. But my view is that metal values — and with it profits at businesses like Central Asia Metals — could rise significantly over the long term.

Demand is tipped to soar, thanks to phenomena like renewable energy, electric vehicles (EVs), artificial intelligence (AI) and urbanisation. At the same time, a weak development pipeline suggests price-supportive metal shortages will emerge towards the end of the decade.

With its ultra-low-cost operations — cash costs at its Kounrad copper project were just 74 cents per pound in 2023 — this AIM business could thrive in the years ahead.

Banking giant

Banking giant HSBC Holdings (LSE:HSBA) is a more familiar name to UK investors. Like Central Asia Metals, it also looks cheap when it comes to predicted earnings and dividends.

City analysts are tipping earnings to rise 9% in 2023. This leaves it trading on a corresponding P/E ratio of 7 times. Its PEG multiple is 0.8.

Meanwhile, the dividend yield on HSBC shares sits at 9.1%. To put that in perspective, the FTSE 100 average is well back at 3.5%.

But this is not all. With a sub-1 price-to-book (P/B) ratio of 0.9, the bank also trades at a discount to the value of its assets.

Created with Highcharts 11.4.3HSBC Holdings PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

So why is HSBC’s share price so cheap, you ask? The bank’s focus on Asian economies leaves it especially vulnerable to current troubles in China. These include an enduring property crisis and deflationary pressures.

However, the long-term outlook in these emerging regions is highly encouraging. Financial product penetration rates remain low. And there’s ample scope for growth as personal wealth levels and population sizes increase.

I like the steps HSBC is taking steps to embrace this opportunity too, by selling assets in North America and Europe and investing heavily in Asia. With one of the strongest names in the business, I expect the bank to deliver great earnings growth over the next decade.

But there are other promising opportunities in the stock market right now. In fact, here are:

5 stocks for trying to build wealth after 50

The cost of living crisis shows no signs of slowing… the conflict in the Middle East and Ukraine shows no sign of resolution, while the global economy could be teetering on the brink of recession.

Whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times. Yet despite the stock market’s recent gains, we think many shares still trade at a discount to their true value.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. We believe these stocks could be a great fit for any well-diversified portfolio with the goal of building wealth in your 50’s.

Claim your free copy now

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

HSBC Holdings is an advertising partner of The Ascent, a Motley Fool company. Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended HSBC Holdings. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

4 REITs Fools own for passive income

REITs often have higher-than-average dividend yields compared to other stocks, making them a solid choice to consider for passive income…

Read more »

artificial intelligence investing algorithms
Investing Articles

Up 272% in just a year, is Palantir stock just getting started?

This writer recognises that Palantir has grown its business very well -- but does the stock price offer him an…

Read more »

Runner standing at the starting point with 2025 year for starting in new year 2025 to achieve business planing and success concept.
Investing Articles

Up 50%? The Aston Martin share price forecast is mind-blowing! 

If analysts are right, the Aston Aston Martin share price could absolutely rocket in the year ahead. Harvey Jones says…

Read more »

Investing Articles

As the S&P 500 drops, here are 2 Stocks and Shares ISA holdings I’m watching

Our writer has different views on how President Trump's tariffs might affect these two US holdings in his Stocks and…

Read more »

Surprised Black girl holding teddy bear toy on Christmas
Investing Articles

£10,000 invested in Tesla stock at Christmas is now worth…

Tesla stock has been one of best-performing investments of the past decade. But things haven't gone to plan for investors…

Read more »

Investing Articles

Up 279% in 5 years, could Meta stock keep soaring?

Meta stock has more than tripled in five years. This writer sees lots to like about the business but also…

Read more »

Pink 3D image of the numbers '2025' growing in size
Investing Articles

25% total return in a year? Is now the perfect time to buy BP shares?

BP shares are on the front line of today's global economic and political uncertainty but analysts think they can still…

Read more »

Affectionate Asian senior mother and daughter using smartphone together at home, smiling joyfully
Investing Articles

With Cash ISA changes coming, could now be the time to consider buying shares?

Changes to the Cash ISA could lead to greater investment in the stock market. This could be a good thing…

Read more »