3 Absurdly Cheap Stocks to Buy With $1,000 While the Market Is This Nervous

Investors may struggle to make sense of the market. While stock categories such as artificial intelligence (AI) are booming, consumer stocks have become increasingly stagnant.

The good news is that such trends rarely persist, and amid the AI focus, investors are likely overlooking some bargains in the consumer sector. Thus, if one has $1,000 to invest, they may want to consider buying three absurdly cheap consumer stocks.

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1. Chewy

As companies emerged from the pandemic, one-time highfliers like Chewy (NYSE: CHWY) seemed to have become forgotten. During the pandemic, it stood out for its low prices and customer service, which set it apart from e-commerce companies like Amazon. Over time, investors soured on the stock as customers returned to buying pet supplies offline.

However, a closer look at the numbers shows that sales continued to rise, even as the stock fell. Moreover, Chewy has expanded into selling pharmaceuticals for pets and offering virtual and, in a few cases, in-person veterinary visits.

That led to a 6% increase in net sales in fiscal 2025 (ended Feb. 1). Net income rose 21%, and free cash flow increased 24% to $562 million.

Still, despite those improvements, Chewy's stock is down by more than 50% over the last year.

Fortunately, we might soon reach a point where investors recognize Chewy's value. While it currently has a 41 P/E ratio, its forward earnings multiple has fallen to 13.

That forward P/E ratio may finally be what makes Chewy stock an undervalued stock to buy. At such levels, it might pay for investors to allocate $340 of the $1,000 to purchase 16 shares.

2. Target

Admittedly, Target (NYSE: TGT) has looked more like a stock to avoid since the pandemic. Persistently high inventory levels, poor product selection, messy stores, and forays into the political realm are among the missteps that have soured customers and investors on Target.

However, former COO Michael Fiddelke took over as CEO in February. Since that time, he has pledged to invest $5 billion to revamp stores, improve its supply chain, hire more personnel, and invest in technology.

Such efforts might have already helped. After years of sales declines, Target reported a 7% yearly increase in net sales in the first quarter of fiscal 2026 (ended May 2), a dramatic turnaround from the 2% drop in net sales in fiscal 2025.

Indeed, rising selling, general, and administrative expenses led to a 25% drop in net earnings over the same period. Still, as previously mentioned, Target is investing in business improvements to improve sales, which should boost the stock longer term. To that end, Target increased its fiscal 2026 sales growth forecast to 4%, up from 2% in the prior quarter, making it unlikely that the fiscal Q1 results were a one-time occurrence.

That also makes its dividend, which has risen for 54 straight years, more likely to keep increasing. Also, at a 3.7% dividend yield, the improvements could help attract income investors. When also considering Target's 16 P/E ratio, investors might want to consider buying three shares.

3. Campbell's

One of the more surprising investor trends is the turn against packaged food stocks like Campbell's (NASDAQ: CPB). Along with its flagship Campbell's soup, the company owns brands such as Prego, V8, and Pepperidge Farm. Still, Campbell's stock has suffered as consumers increasingly turn to natural and organic foods, and rising input costs have weighed on the company's performance.

However, like other packaged food companies, Campbell's has shifted more of its focus to healthier products. Moreover, it remains a market share leader in sales categories such as soup.

Admittedly, that has not stopped the drop in sales, which fell 5% year over year in the second quarter of fiscal 2026 (ended Feb. 1), more than the 3% pullback in the previous quarter. Amid that drop, net earnings declined by 16% over the same period.

Nonetheless, the stock sell-off seems overdone. The stock trades at its lowest level since the mid-1990s, and amid its struggles, it sells for 11 times earnings.

Additionally, its $1.56-per-share annual dividend yields 7.4%. While it does not increase its payout annually like Target, the payout has trended higher over the years.

Ultimately, given its respected brands, low P/E ratio, and high dividend yield, one might justify investing $274 to buy 13 shares of the consumer staples stock.

Will Healy has positions in Target. The Motley Fool has positions in and recommends Amazon, Chewy, and Target. The Motley Fool recommends Campbell's. The Motley Fool has a disclosure policy.