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There's little question that the stock market is currently expensive. Cheap stocks in this environment are few and far between. But if you look hard enough, there are still some bargains to be found. BBBY , Acacia Communications NASDAQ: CBI are all trading at depressed valuations. All three stocks come with significant risks, and all three could burn you if things go wrong.

But there's plenty of upside if the worst-case scenarios fail to play out. Fourth-quarter comparable sales grew by 0. The bottom line, however, is different story.

BBBY data by YCharts. Slumping earnings have dragged down the stock price, creating an interesting situation for investors looking for cheap stocks. The market is betting that things keep getting worse, and they very well may. There's significant risk here, especially if sales begin to decline. But the valuation makes opening a small position tempting.

Acacia Communications makes optical interconnect products, counting cloud infrastructure providers and communication service providers as customers. Like with any small tech company, predicting the future is next to impossible.

But Acacia has enjoyed both strong growth and impressive profitability over the past few years, and the stock is priced at what looks like a pessimistic level.

ACIA data by YCharts. The culprit is weak demand in China, which is affecting not only Acacia but the entire industry.

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The company expects this to be a temporary slowdown, with growth returning during the second half. If the China slowdown turns out to be truly temporary, the stock could soar as the company returns to revenue and earnings growth in But if weak demand persists for longer than expected, the stock could tumble further. If a cheap small-cap tech stock is what you're after, Acacia is one to consider. Second, weak demand for its services, particularly in the energy sector, has led to slumping revenue and profits.

CBI data by YCharts. On top of that, the company will need to turn its business around and return to earnings growth. A new CEO is taking the helm on July 1, with a challenging task ahead.

There's a lot of uncertainly and a lot of risk, but a single-digit earnings multiple should put the stock on your radar. Timothy Green has no position in any stocks mentioned. The Motley Fool has a disclosure policy. Tim writes about technology and consumer goods stocks for The Motley Fool. He's a value investor at heart, doing his best to avoid hyped-up nonsense. Follow him on Twitter: Skip to main content The Motley Fool Fool.

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