Stock market

Consider 2 dirt cheap growth stocks for investors this June.

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

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

Copper game

Base Metals Miner Metals of Central Asia. (LSE:CAML) looks dirt cheap across various metrics.

City analysts expect annual revenue to grow by 27% in 2024. And so the company – which owns a copper plant in Kazakhstan and a lead-zinc property in North Macedonia – trades at a forward price-to-earnings (P/E) ratio. 10.2 times the ratio

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

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

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

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

Demand is tipped to increase thanks to phenomena such as renewable energy, electric vehicles (EVs), artificial intelligence (AI) and urbanization. At the same time, a weak development pipeline suggests shortages of the price-supporting metal will emerge by the end of the decade.

With its ultra-low-cost operations – its Conrad copper project has cash costs of just 74 cents per pound in 2023 – it the aim Business can grow in coming years.

The banking giant

The 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 projected earnings and profits.

City analysts are pointing to 9% earnings growth in 2023. This makes it trading at the same 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 into perspective, FTSE 100 The average has returned to 3.5%.

But that 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.

So why is HSBC’s share price so cheap, you ask? The bank’s focus on Asian economies makes it particularly vulnerable to current difficulties in China. These include the persistent property crisis and inflationary pressures.

However, the long-term outlook in these emerging regions is extremely encouraging. Penetration rates of financial products remain low. And there is plenty of room for growth as personal wealth levels and population sizes increase.

I like the steps HSBC is taking to embrace this opportunity 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 grow earnings tremendously over the next decade.


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