What cheap stock should i buy now

Screening Filters

1. Market Cap ≥ $500,000,000

   • Purpose: Focus on established, mid-sized and larger companies rather than very small, highly speculative names.
   • Rationale:
     • “Inexpensive” often implies value, not tiny penny stocks with outsized risk.
     • A minimum market cap helps filter out microcaps and illiquid names that can be extremely volatile and easily manipulated.
     • Companies above this size are more likely to have stable operations, better disclosure, and analyst coverage.

2. Share Price Between $2 and $20

   • Purpose: Capture lower-priced stocks that most investors would colloquially call “cheap” per share, while excluding extreme penny stocks.
   • Rationale:
     • Many investors think of “inexpensive” in terms of per-share price in addition to valuation multiples.
     • Setting a floor at $2 avoids the riskiest sub-$1 “penny stock” territory where bid/ask spreads and risks jump sharply.
     • Capping at $20 ensures we stay in a price range that feels accessible and “low-priced” to most retail investors.

3. Region: United States

   • Purpose: Limit the universe to U.S.-based companies or stocks listed in the U.S. market.
   • Rationale:
     • You explicitly asked for “US stock,” so this keeps the results aligned with your geographic preference.
     • It also helps ensure U.S. regulatory standards, reporting formats (SEC filings), and generally familiar accounting practices.

4. Exchange: XNYS, XNAS, XASE (NYSE, NASDAQ, NYSE American)

   • Purpose: Focus on major, reputable U.S. exchanges.
   • Rationale:
     • These exchanges have listing standards for financial strength, minimum share price, and reporting, which improves overall quality.
     • Excluding OTC and pink sheet markets helps avoid many highly speculative or poorly regulated securities.

5. Debt-to-Equity Ratio ≤ 1.5

   • Purpose: Screen for companies with moderate or lower leverage (not heavily indebted).
   • Rationale:
     • An “inexpensive” stock that is cheap because it’s overloaded with debt can be a value trap.
     • Capping debt/equity at 1.5 filters out the most leveraged firms, reducing balance-sheet risk and sensitivity to rising interest rates.
     • Healthier capital structures make it more likely that low valuations reflect opportunity rather than distress.

6. P/E (TTM) Between 5 and 18

   • Purpose: Target reasonably valued or undervalued stocks on an earnings basis, while avoiding both extreme distress and overvaluation.
   • Rationale:
     • A low-to-moderate price/earnings multiple is a classic definition of “inexpensive” from a valuation standpoint.
     • Minimum of 5: avoids ultra-low P/Es that can signal severe trouble, one-off earnings spikes, or data anomalies (e.g., 1–2x P/E often means something is structurally wrong).
     • Maximum of 18: keeps you away from high-growth, richly valued names and focuses on more moderately priced companies relative to their earnings.

7. Price-to-Book (P/B) Ratio ≤ 2.5

   • Purpose: Ensure you’re not overpaying relative to the company’s net assets.
   • Rationale:
     • A lower P/B multiple is another classic marker of “value” or “inexpensive” stock pricing.
     • Capping P/B at 2.5 screens out companies trading at very high multiples of their book value, which are less likely to be considered “cheap” on an asset basis.
     • This is particularly useful for capital-intensive sectors (financials, industrials, etc.) where book value is a meaningful anchor.

Why Results Match Your Request

• The price range ($2–$20) directly addresses your desire for an “inexpensive” stock in per-share terms.
• The P/E and P/B limits frame “inexpensive” in valuation terms, focusing on stocks that are not richly valued relative to their earnings and assets.
• Market cap and exchange filters keep you in the realm of better-established, more liquid U.S. companies, reducing the odds of landing on ultra-speculative penny stocks that are “cheap” only because they’re very risky.
• The debt/equity cap helps ensure that the “cheapness” is more likely due to mispricing or moderate sentiment, rather than dangerous financial leverage.

Together, these filters aim to find U.S. stocks that are:

• Lower-priced per share,
• Reasonably valued vs. earnings and book value, and
• Financially and structurally sound enough to be considered for investment.