Is Helen of Troy Limited (HELE) the Undervalued Gem You Should Be Investing In?

We recently released a list of 11 Extremely Affordable Stocks Worth Considering for Investment In this piece, we will examine how Helen of Troy Limited (NASDAQ:HELE) measures up against other extremely undervalued stocks worth considering for investment.

As we search for deals in the commodities market — Comparing price ratios, spotting reduced-price items, and selecting the product with the highest value for your budget — Investing in the financial markets is not distinct in this aspect. In both types of investment, the price is crucial.

In a market where stocks often come with hefty price tags, identifying undervalued treasures sets apart savvy investors from those acting on impulse. The individual who grasps that true worth lies not merely in selecting which stock to purchase, but also in determining how much to pay for it, will be better positioned to uncover under-the-radar yet valuable securities.

Let’s start by clarifying what we mean by a "cheap" stock. Generally, this term can have one of two meanings. Firstly, a stock might be considered inexpensive simply because it has a low share price. Alternatively, when people talk about a cheap stock, they often refer to an undervalued stock. In our examination, we align ourselves with the latter definition: a cheap stock is one that trades beneath its inherent worth determined by metrics such as profits, sales, or property holdings. Therefore, within financial circles, stocks deemed "inexpensive" compared to their actual potential are seen as attractive buys for investment purposes.

A method to identify a stock trading at a discount is via the forward price-to-earnings ratio. Investors use this metric to determine what amount they are investing per dollar of anticipated future earnings from the company. If this ratio is low relative to peers, past performance, and general market levels, it could indicate that the stock might be underpriced.

According to a report published by Hoover Capital Management (HCM), the analysis of value versus growth stocks using the French High Minus Low (HML) factor reveals compelling evidence favoring value investing. Over a period spanning 97 years—from July 1926 to December 2023—the aggregate returns indicate that value stocks exceeded those of growth stocks by an astounding margin of 3,000%, equating to a thirtyfold increase over growth investments. Additionally, economist Victoria Galsband’s findings underscore this trend, noting that inexpensive stocks performed better than their high-growth counterparts between 1975 and 2010 across all seven major economies within the Group of Seven: Canada, the United States, Japan, as well as key nations in Europe.

A different analysis examined how including or excluding firms from the S&P index affects their valuation metrics. It found that when businesses get dropped from this benchmark, they often become underpriced relative to their intrinsic value; conversely, being included tends to result in overvaluation. According to research conducted by Research Affiliates, shares delisted from the S&P during the period spanning from 1990 through 2022 consistently beat those listed by an annual margin exceeding five percent. This supports our belief that equities considered inexpensive stand a better chance at delivering superior financial outcomes.

Our Methodology

We've put together a list of 11 extremely affordable stocks using the Finviz screening tool. The selection process focused on identifying stocks with a Price-to-Earnings (P/E) ratio below 5. This collection spans various sectors including consumer goods and natural resource extraction. The stocks are arranged based on their P/E ratios, starting from the highest down to the lowest.

At Insider Monkey, we have an intense fascination with hedge funds. We focus on the stocks these hedge funds accumulate because the rationale behind this interest is straightforward: our studies indicate that mimicking the leading stock choices from premier hedge funds allows us to exceed market performance. Each quarter, our quarterly newsletter employs a strategy that chooses 14 small-cap and large-cap stocks, achieving returns totaling 373.4% since May 2014, surpassing its benchmark by 218 percentage points. ( see more details here ) .

A woman in a spa setting, using Health & Wellness products.

Helen of Troy Limited (NASDAQ: HELE )

Forward P/E as of April 17: 4.13

Helen of Troy Limited (NASDAQ:HELE) is a leading global consumer products company with a focus on creative solutions through well-diversified and widely recognized brands. Headquartered in Hamilton, Bermuda, the company mainly operates through the Home and Outdoor and Beauty and Wellness segments. HELE emphasizes product innovation, product quality, and competitive pricing.

The purchase of Olive & June, an upscale nail care company, by Helen of Troy Limited (NASDAQ:HELE), positions it favorably for growth. This move highlights their strategy to broaden their product range beyond their conventional lineup of hair tools and skincare items. The firm projects that this acquisition could bring in between $17 million and $19 million in revenues during the last quarter, with potential increases forecasted in subsequent years. Speaking on this development, Noel Geoffroy, who serves as CEO, stated the following:

There is substantial room for expansion within Olive & June as the team keeps strengthening the brand’s appeal and focus on consumers, along with pushing boundaries through innovative marketing strategies and new products. Additionally, utilizing Helen of Troy’s resources will aid in broadening market reach via enhanced distribution channels.

Helen of Troy Limited (NASDAQ:HELE) continues to invest heavily in both product development and marketing, which form the backbone of effective strategic planning for top-tier businesses. Coupled with increased revenues from products related to influenza, expanded market reach, and contributions from recent acquisitions, these efforts could drive favorable financial performance for the firm over the next few quarters.

Despite being highly vulnerable to tariffs due to significant imports from China, the adverse effects could potentially be offset by achieving cost reductions via Project Pegasus, increased sales volumes, synergies gained from mergers, and thoughtful price adjustments over time. The performance of Helen of Troy Limited (NASDAQ:HELE) in fiscal year 2026 hinges largely upon minimizing expenses, much like what was executed successfully in fiscal year 2025 within the framework of the Project Pegasus program.

The projected price target of $78.33 within a year indicates an impressive 135% rise from the current stock value. Given this outlook, HELE seems destined for substantial and enduring expansion, making it one of the top inexpensive stocks worth considering for investment.

Overall, HELE ranks 6th on our list of ridiculously cheap stocks to invest in. While we acknowledge the potential of cheap stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than HELE but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock .

READ NEXT: 20 Top AI Stocks You Should Consider Purchasing Today and 30 Top Stocks to Purchase Currently as Recommended by Billionaires .

Disclosure: None. This article is originally published at Insider Monkey .