Recently, we unveiled a comprehensive list titled "11 Ridiculously Cheap Stocks to Invest In." This article aims to delve deeper into the current standing of Upland Software, Inc. (NASDAQ: UPLD) compared to other stocks deemed remarkably affordable.

Investing, much like hunting for bargains in the commodity market, involves astutely comparing relative prices, identifying discounted opportunities, and ultimately acquiring the products that deliver the highest value for your dollar. Just as consumers seek the best prices for tangible goods, savvy investors aim to uncover undervalued stocks in the financial market. Here, the cost of investment becomes a crucial factor in deciding which stocks to pursue.

In an era characterized by inflated stock prices, the ability to recognize a hidden gem can set a discerning investor apart from one who acts impulsively. The distinction lies in the understanding that value does not merely revolve around what you buy but significantly leans towards what you pay for it. An investor who comprehends this principle has a much higher chance of pinpointing a stock that, despite being overlooked by many, possesses considerable intrinsic value.

To grasp what constitutes a "cheap stock," we must first define the term accurately. There are two prevalent interpretations of what makes a stock cheap. The first is a straightforward approach, where a stock is considered cheap simply due to its low share price. The more nuanced definition, however, refers to an undervalued stockone that is priced below its intrinsic value, which can be determined by analyzing earnings, revenue, or total assets. This perspective resonates with our analysis, indicating that a cheap stock is one that is trading at a discount compared to its true potential, thus making it an attractive investment option.

One of the key metrics for identifying these undervalued stocks is the forward price-to-earnings (P/E) ratio. This ratio serves as a valuable indicator for investors, revealing how much they are effectively paying for every dollar of a company's earnings. When the P/E ratio is low in comparison to that of competitors, historical averages, and the broader market, it often signals a stock that may be undervalued.

A report from Hoover Capital Management (HCM) sheds light on the historical performance of value versus growth stocks, utilizing the French High Minus Low (HML) factor for analysis. The report, which compiled data over an impressive span of 97 years, from July 1926 to December 2023, presents compelling evidence in favor of value investing. According to their findings, value stocks have produced cumulative returns that eclipse growth stocks by a staggering 3,000%. This translates to value investing yielding returns that are 30 times greater than those from growth strategies.

Moreover, research conducted by Economist Victoria Galsband further corroborates these findings, revealing that cheap stocks consistently outperformed their growth counterparts in every single G7 nation between 1975 and 2010. This includes prominent economies such as Canada, the United States, Japan, and leading European countries.

Furthermore, an extensive analysis examining the implications of adding or removing companies from the S&P index has provided further insights into stock valuations. The study indicated that removals tend to be associated with stock undervaluation, while additions often reflect overvaluation. Stocks that have been removed from the index have demonstrated a remarkable ability to outperform the market. Research Affiliates conducted a study that revealed stocks relegated from the S&P between 1990 and 2022 outperformed those newly added by over 5% annually. These findings lend substantial weight to our assertion that undervalued stocks, which we categorize as cheap stocks, have a higher likelihood of generating impressive returns.