Cheap stocks are like piles of gold covered in mud trading at the price of peanuts. On a regular day, it’s difficult to spot the shining value hidden underneath these businesses. But through careful analysis, it’s possible to uncover explosive investment opportunities for my portfolio.

I have previously discussed several cheap stocks to buy under $5. However, since then, I’ve uncovered three more businesses that look set to thrive in the coming years. Let’s explore.

A cheap stock for value investors

The American pharmaceutical company Merck (NYSE:MRK) is an excellent choice of investment for value investors, in my opinion. Its molnupiravir drug, an anti-viral medicine that can be used to treat Covid-19, has exhibited excellent results so far. And with applications beyond the pandemic, I believe this new product, if approved by regulators, can generate millions of dollars in revenue over the coming year.

The growth drivers for the pharma company include continuous implementation of new and innovative therapies along with multiple mergers and acquisitions side by side. As a result, the company reported $12.9bn in sales for the nine-month ending September 2021. This represents a roughly 12% year-on-year increase – not bad, I feel.

However, operating in the pharmaceutical sector is quite a challenging environment. Beyond high expenses, clinical trials can very quickly go south, wiping out millions or even billions of dollars of investments. Merck is no exception to this risk. However, given the growth potential of its product pipeline, I feel it’s a risk worth taking for my investment portfolio. And its 14% share price drop in November is making the stock look relatively cheap to me. That’s why I think now could be an excellent buying opportunity.

A cheap stock in the travel sector

National Express (LSE:NEX) grabbed my attention with its recent quarterly results. The company reported an 83% increase in revenue compared to the same period in 2019. Considering the pandemic is still ongoing, that’s pretty impressive.

Initially, Covid-19 wreaked havoc on this business, sending its share price plummeting. But since then, the demand for public transport has largely recovered, allowing for revenues to steadily rise.

However, there remain several challenges ahead. The industry-wide challenge of the driver shortages is dampening the company’s efforts towards improvement. With demand for such drivers being high, the company is somewhat forced to offer higher salaries. That’s great news for employees, but not so much for the bottom line. And it could damper long-term performance.

Yet, even with this threat, I can’t ignore that the stock looks far too cheap in my eyes. With revenues on the rise and liquidity strengthening, National Express is my pick amongst the best cheap stocks to buy right now.

Driving growth through 5G adoption

Verizon (NYSE:VZ) is on my list of cheap stocks because it is low in price and high in earnings, from what I can tell. The company reported total wireless service revenue of $17.1bn, representing a 3.9% increase year-over-year. Furthermore, the accelerated deployment of the 5G network across the US will likely boost the growth momentum, in my opinion. Verizon’s forecasts that the total reach of its 5G network will spread to 15 million homes in the US by the end of the current fiscal year.

Despite the immense growth, Verizon needs to focus more on adding more postpaid customers. Not only it is lagging from its competitors in this area, but this segment is also vital for the growth of a wireless network operator. While this is a potentially severe long-term problem, I can’t deny the stock is looking cheap at the moment. That’s why I am considering it for my portfolio.

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Saima Naveed does not own shares in any of the companies mentioned. The Money Cog has no position in any of the companies mentioned. Views expressed on the companies, assets and strategies mentioned in this article are those of the writer and, therefore, may differ from the opinions of analysts in The Money Cog Premium services.