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Looking for the best cheap stocks to buy this month? Here are three on my own watchlist this autumn that may be worth investors researching further for their own portfolios.
A cheap defence stock
2025’s seen a sharp re-rating of the Babcock International (LSE:BAB) share price. The business has grown 99% in value in the year to date, an ascent that saw it enter the Footsie in March.
Yet incredibly, the defence giant still looks cheap based on expected earnings. It now carries a forward price-to-earnings (P/E) ratio of 18.9 times.
To put that in context, popular UK defence shares BAE Systems and Rolls-Royce trade on multiples of 23.5 times and 39.9 times respectively. Furthermore, the broader European defence sector trades on a P/E ratio of 27-28 times.
Earnings at Babcock are rising strongly as arms spending from key clients like the UK ramps up. City analysts expect the bottom line to rise another 7% this year (to March 2026) before rising 12% in both 2027 and 2028.
Projections are underpinned by the company’s bulging £10.4bn order backlog. Despite supply chain problems and competitive threats, I think it’s a top blue-chip share to consider.
Banking star
TBC Bank (LSE:TBCG) isn’t just one of the most attractive FTSE 250 value shares, in my view, it’s also one of the best bargains among the UK banking sector.
Trading on a forward P/E ratio of 6.1 times, predictions of a further double-digit earnings rise in 2025 also leave it with a price-to-earnings growth (PEG) ratio of 0.4. Any reading below 1 suggests excellent value. To round things off, TBC’s forward dividend yield is a healthy 5.5%.
I’m not saying its profits explosion is down solely to it being in the ‘right place at the right time’. Heavy investment on the digital side and, more recently, its entry into Uzbekistan, have paid off handsomely.
But TBC’s focus on the fast-growing Georgian economy has proved critical to its long-running growth story. And it’s a trend that looks set to continue — the Asian Development Bank expects Georgia’s GDP to expand 6% this year and by a further 5% in 2026.
Be mindful though, that a global economic slowdown could put these forecasts in jeopardy.
A FTSE recovery play
Vodafone‘s (LSE:VOD) share price swept higher over the summer as investors chased underpriced quality shares. Yet the FTSE 100 telecoms provider still looks cheap across a variety of metrics.
Its forward P/E ratio has sprung up to 13 times from below the bargain watermark of 10 times before its summer bull run. However, a sub-1 price-to-book (P/B) ratio of 0.5 shows Vodafone still trades at a discount to the value of its assets. Finally, the prospective dividend yield here is a juicy 5%.
Vodafone’s turnaround in the key Germany market remains vulnerable to setbacks. Regulatory changes there impacting bundling procedures have hit revenues hard in recent years. Ongoing stress there means City analysts think annual earnings will fall 7% this financial year (to March 2026).
But on balance, I think Vodafone’s in good shape to enjoy a sustained recovery. It’s slimmer following recent divestments and group-wide cost-cutting. Its merger with Three in the UK could deliver significant benefits. And finally, I think its African operations carry significant long-term growth potential.
