Image source: Flickr user Jim Makos.

While the market was in nearly nonstop rally mode for most of the past six years, investors didn't need to look far to uncover an abundance of growth stocks. But not all growth stocks are created equal. While some look poised to deliver extraordinary gains going forward, the recent market turbulence has crushed some that were overvalued, burdening their shareholders with hefty losses.

What exactly is a growth stock? I'll define it as any company forecast to grow profits by an average of 10% or more annually during the next five years -- although that's an arbitrary number. To gauge what's "cheap," I'll use the PEG ratio, which compares a company's price-to-earnings ratio to its forecast future growth rate. A PEG of around one or less could signal a cheap stock.

Here are three companies that fit that bill.

Taiwan Semiconductor
The technology sector is known for its high-growth stocks, but you won't always find a "good value." With contracted chip manufacturer Taiwan Semiconductor Manufacturing Company (TSM -3.45%), I believe you get a solid representation of growth and value.

Image source: Taiwan Semiconductor Manufacturing Company.

Despite being valued at approximately $130 billion, there could still be ample upside in this semiconductor giant. One of the primary reasons why has to do with the market for semiconductors still touching the tip of the iceberg. Based on data aggregated by Statista, more than 1.4 billion smartphones were sold to end users last year. That's an increase of nearly 1 billion since 2011, and this figure is likely going to head higher, albeit at a more modest pace.

There's more to Taiwan Semiconductor's growth opportunity than just smartphones chip contracts. Think about the Internet of Things and how everything electronic within our homes and our cars could soon be communicating with one another. This will mean appliances, heating systems, automobiles, and numerous other opportunities to develop and manufacture chips. Based on forecasts from Gartner, "connected things" are expected to rise from 6.4 billion in use worldwide this year to 20.8 billion by 2020. That's a huge opportunity for TSMC, which controls a good chunk of the contracted semiconductor market.

Image source: Taiwan Semiconductor Manufacturing Company.

It's also important to understand that as technology device makers grow, they may not rely on manufacturing their own chips. Apple is a good example, as it forged a deal with TSMC back in 2014 to manufacture its processors -- a deal expected to continue with new model iPhones. Companies are increasingly relying on contracted chip manufacturers to provide new chip innovations so they can focus instead on brand-building and design.

Along those same lines, TSMC is able to use its size and new innovations to bring new products to market at a remarkable pace. We may not be seeing the same historic jumps in power or performance improvements with each new innovation, but TSMC is certainly able to deliver new levels of innovation at a faster pace than many of its foundry rivals.

Valued at a PEG of 0.9, Taiwan Semiconductor could be just what cheap growth investors ordered.

Essent Group
Next up, I'd suggest investors who are looking for a good deal and substantial growth consider private mortgage insurance provider Essent Group (ESNT 1.50%).

As you might imagine, the entire mortgage insurer industry still conjures up bad memories for most investors. The housing bubble from the end of last decade, and the massive wave of ensuing foreclosures, nearly put a number of big mortgage guarantors out of business. However, housing sales and prices have rebounded, and the industry is profitable once more. What makes Essent Group stand out from the crowd is that it was formed at the tail end of the housing crisis, meaning it was able to begin its operations without a strained balance sheet or bad legacy policies, unlike its peers.


Image source: Pixabay.

But there's more to Essent (and this industry) than just its perfect timing. The Federal Reserve's now long-term stance on keeping rates near historic lows has been a real savior for the mortgage insurance and reinsurance industry. With fourth-quarter GDP in the U.S. growing slower than expected, the Fed is unlikely to make any hasty moves when it comes to lending rates, and the lower rates stay, the less likely I'd presume homeowners are to default as long as unemployment remains within its historically normal range.

Additionally, Fannie Mae and Freddic Mac have been increasing their guarantee fees. This shouldn't come as a big shock with the government looking to shore up these agencies from potential future downturns. However, pushing higher fees could very easily push business away from Fannie and Freddie and into the arms of private insurers like Essent Group. As we witnessed in 2015, insurance in force rose by nearly 30% year over year, and net income grew by 78% with expenses as a whole dropping from 2014.

Currently, Essent is valued at a PEG of just 0.4, and Wall Street projects it could be pushing its EPS above $4 for the full year by the end of the decade. Those are numbers worth seriously considering.

Sibanye Gold
There's no need to adjust your eyes or glasses; that really is a gold-mining company, Sibanye Gold (SBSW -3.76%).

Image source: Sibanye Gold.

Gold miners, especially African-based resource miners, have had a rough go since 2011. Gold, silver, copper, and practically every metal imaginable has been in a multi-year decline, which is bad news for an industry that expanded without any thought to cost in the late 2000s and early 2010s. Many African mining companies were left with unsustainably high all-in sustaining costs (AISC) when gold prices dropped, pushing some to the brink. Sibanye Gold, South Africa's largest gold miner, has been perhaps the biggest success story to emerge from the near-rubble.

First, Sibanye Gold is benefiting from a number of catalysts in physical gold. Growth uncertainty in the U.S. and Europe, and slowing growth in China, has sent both big and small investors to gold as a safe-haven investment. Additionally, the aforementioned low-yield environment is great news for gold since it doesn't pay a dividend. Persistently low yields and, in some instances, negative interest rate policies make buying and holding gold appear much more attractive. This could be why central banks have been gobbling up the lustrous metal in recent months.

Image source: Sibanye Gold.

Another key point for Sibanye is that it's managed to improve its operations while keeping its workers happy. Earlier this month, the company struck a deal with South Africa's Association of Mineworkers and Construction Union to increase wages for more than 40% of Sibanye's 46,000 employees. Doing so helps the company avoid a costly strike and, even with the wage hikes, should allow Sibanye to reap substantial margins between its falling AISC and the recently rising price of physical gold on a per ounce basis.

Also, the depreciation of the South African rand has helped South African miners in a big way. Whereas most U.S. companies overseas are reporting adverse currency effects, gold miners in South Africa are witnessing margins expand rapidly as the dollar rises in value relative to the rand.

Looking forward, Sibanye Gold has a microscopic PEG ratio and a forward P/E of less than seven. Cheap growth stock investors would be wise to add this company to their watchlists.