The most important rule of investing is to buy low and sell high. However, the current market cannot exactly be described as cheap. Nonetheless, I’ve scoured around for some deals, and here are 3 cheap growth stocks to buy and avoid those at all-time highs.

1. NIO

Nio - 3 cheap growth stocks to buy

Nio’s story is bleak at the moment. The stock has pulled back about 35% from its all-time highs early this year, and while October was a great month for EV stocks, Nio was somewhat left behind. For instance, while Tesla and Lucid rose 43% and 45%, Nio only gained 10%. To make matters worse, Nio announced a drastic drop in delivery numbers for October, citing supply chain issues and manufacturing lines upgrades. The total number of deliveries was at 3000, a 65% decrease from the previous month. 

But why does Nio deserve to be on your “to buy list”? 

First and foremost, it’s cheap. It’s impossible to buy any other EV stock right now without feeling like it’s a rip-off. 

Secondly, Nio is growing fast, maybe even faster than Tesla. In the first nine months of 2021, Nio delivered 66,395 vehicles, a growth of over 150% year-over-year. Even though they’ll only deliver less than 150,000 vehicles this year compared to Tesla’s 625,000, the company is working off a smaller base and has grand expansion plans. And as part of its expansion plans, Nio has made its initial move into the European market by setting up shop in Norway. It plans to establish its entire ecosystem in five major cities in the country, including the famous ‘Nio Houses’ and the convenient battery swapping stations. 

Thirdly, demand for Nio EVs is at an all-time high. The company set a new record for monthly sales in September when they surpassed the 10,000 units mark for the first time. Nio sold a total of 10,628 vehicles, the previous monthly record being a bit over 8,000. Additionally, Nio reported that its order backlog reached a new all-time high in October. 

Compared to other EV companies’ gains in recent weeks, Nio is still a beat-down dog. Nio investors are therefore eager to see Nio stock catch up with the rally. 

Read More: 11 High-Growth IPOs to Watch in Q4-2021


Despite being an industry disruptor, this stock seems to be massively underperforming. Lemonade, the insurance technology company, is down 62% from its highs early this year when it peaked at $188. The stock price is currently just under $70, and while it’s still not extremely cheap, the stock deserves a closer look.

For the longest time, the insurance business has been bland and particularly unappealing to millennials and Gen-Z. So Lemonade is striving to streamline the complex process of purchasing insurance by using an AI-powered mobile app. App users can get insured in as little as 90 seconds and get their insurance claims processed within three minutes. 

But here’s why you should seriously consider adding Lemonade to your portfolio: Lemonade just launched Lemonade Car, its highly anticipated auto insurance service. 

Even though Lemonade has over 1 million customers on its platform, most of its revenue (about 56%) comes from the low-cost renter’s insurance, where the average policy costs about $15 a month. Car insurance premiums are about ten times higher, and the recent launch of Lemonade Car promises to boost the company’s revenue significantly.

Read More: Inflation is rising! Here’s how you can profit from inflation and protect your money.


Paypal is another beaten-down stock yet arguably the best stock in the fintech space. The stock has dropped more than 10% since rumors about Pinterest acquisition came out. Needless to say, the stock is still down even after the company quashed the rumors. 

So why is Paypal a strong buy? 

  1. First-mover advantages – As a pioneer in the fintech space, Paypal has a substantial advantage over its competitors. The company has been around for about two decades and already has over 400 million customers using its platform. Therefore, the company is in an excellent position to use its existing customer base to scale up its business, especially by launching new and innovative products like Venmo and the buy now, pay later feature. 
  2. Reasonable valuation – Compared to other fintech companies like Square, Paypal’s valuation is quite reasonable. The stock trades at a forward PE of 38, yet analysts expect double-digit growth of up to 23% in 2022. 
  3. High profits and a large cash pile – In Q3, Paypal announced a GAAP net income of $1.087 billion, up 6% year-over-year. The company’s free cash flow increased to $1.28 billion from $213 million in the same period last year. 
  4. High Agility – Having a large amount of free cash enables Paypal to quickly take advantage of emerging trends; for example, Paypal promptly jumped onto the buy now, pay later wagon that offers excellent growth opportunities. A recent announcement by Paypal revealed a deal with Amazon that will make the feature(Buy Now, Pay Later) available to Amazon customers very soon. 

Read More: 5 Things to Do When the Stock Market Crashes.

The Bottom Line

The stocks mentioned above are the top three stocks I’m currently adding to my portfolio, and here’s a summary of why: 

  • They are in rapidly growing industries
  • Have vast growth potential
  • Are presently trading at a bargain. 

Disclosure: Centessential has long positions in Nio, Lemonade and Paypal.

Disclaimer: None of this is meant to be construed as financial advice, it’s for educational purposes only. Links may include affiliate referrals and I may receive compensation from partnering websites. The content is accurate as of the posting date but may not be accurate in the future.

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