When you’re trading stocks online, you would realize that there is nothing more enticing for investors than a cheap growth stock. In the current state of the stock market it isn’t hard to find plenty of growth stocks, though not all of these are equally gainful. Some are significantly overvalued while others could dish out significant losses.

The following cheap growth stock, suggested by Motley Fool is based on the principle that a growth stock is a company that is forecasted to improve its profits annually at the rate of 10% or more in the successive five years. Cheapness of the stock is defined by the PEG ratio that compares the price-to-earnings ratio of a company to its growth rate in the future, with a figure around 1 or below indicating a cheap stock.

An Ammunition Stock at Just the Right Stage

Vista Outdoor ($VSTO) has a 0.6 PEG and is a midcap company that manufactures ammunition and firearm accessories for sport, hunting, and law enforcement. Its Q1 results can be held responsible for its shares being cheaper now than three months before. Its adjusted EPS for Q1 2017 was at $0.48m, while in the year-ago period it was $0.53. The company did hang on to its full-year forecast, but the stock market was expecting a Q1 2017 EPS of $0.69. The reason for this miss was attributed by the company to an overall slacking of retail sales all over the country. As a result, a quarter of the company’s valuation has been erased since August. However, this does present a great buying opportunity.

This opportunity ironically comes as a result of the possibility of the Federal government planning to bring into effect tougher laws on gun control, following various shooting incidents that have occurred in the country recently. But while such laws may seem to reduce sales of ammunition and adversely affect Visa Outdoor, they could have the opposite effect. The anticipation of tougher gun ownership regulations is already pushing consumers to stock up on ammunition and firearms while the laws are still relaxed. This anticipation could drive sales for a significant period, though it certainly won’t last forever. Vista Outdoor is currently witnessing a massive spike in sales.

This trend therefore makes $VSTO worth checking out at this stage. The company’s long terms plans seem to revolve around mergers and acquisitions. It had announced the $412.5 million acquisition of CamelBak, the personal hydration business. It has also entered the cycling market with its buyout of BRG Action Sports for $400 million. More recently, it has acquired Camp Chef, the outdoor cooking solutions manufacturer, for $74 million.

So you’re looking at a company that is on a significant sales growth pattern in the high single digit or low double digits.

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