- Investing in stocks priced under $10 can offer potential growth opportunities without the need for significant capital.
- Unfortunately, many of them also come with serious red flags.
- These 10 cheap stocks have plenty of upside according to the InvestingPro models as well as analyst price targets.
- Secure your Black Friday gains with InvestingPro's up to 55% discount!
- Thursday’s Closing Price: $7.40
- Fair Value Estimate: $9.87 (+33.4% Upside)
- Market Cap: $14.1 Billion
- Thursday’s Closing Price: $5.03
- Fair Value Estimate: $7.25 (+44.2% Upside)
- Market Cap: $5 Billion
- Thursday’s Closing Price: $7.61
- Fair Value Estimate: $11.94 (+56.9% Upside)
- Market Cap: $3.3 Billion
- Thursday’s Closing Price: $7.09
- Fair Value Estimate: $9.44 (+33.2% Upside)
- Market Cap: $3.2 Billion
- Thursday’s Closing Price: $8.04
- Fair Value Estimate: $12.30 (+53% Upside)
- Market Cap: $3 Billion
- Thursday’s Closing Price: $3.32
- Fair Value Estimate: $4.54 (+36.9% Upside)
- Market Cap: $1.84 Billion
- Thursday’s Closing Price: $8.12
- Fair Value Estimate: $11.84 (+45.8% Upside)
- Market Cap: $1.1 Billion
- Thursday’s Closing Price: $3.62
- Fair Value Estimate: $4.73 (+30.7% Upside)
- Market Cap: $1 Billion
- Thursday’s Closing Price: $5.78
- Fair Value Estimate: $8.69 (+50.4% Upside)
- Market Cap: $921.8 Million
- Thursday’s Closing Price: $8.45
- Fair Value Estimate: $10.50 (+25.3% Upside)
- Market Cap: $563.3 Million
Investing in the stock market doesn't always require hefty capital. For investors seeking opportunities without breaking the bank, stocks under $10 present an intriguing avenue.
However, identifying high-quality stocks with a share price of less than $10 is few and far between. A low stock price could be an indicator that something serious is wrong with a company’s underlying business.
With that being said, I used the InvestingPro Stock Screener to search for cheap, high-quality stocks that could be excellent buying opportunities for frugal investors.
I scanned for stocks with InvestingPro ‘Fair Value’ upside greater than 25% that also possess a Wall Street “buy” consensus rating, and at least $500 million in market capitalization.
Source: InvestingPro
Despite a difficult near-term outlook, the stocks chosen for this list demonstrate attractive business metrics and long-term growth potential. As such, here are 10 of the best stocks to buy under $10, according to InvestingPro.
1. Nio - Electric Vehicles
Why It's Attractive: Nio (NYSE:NIO), which is one of China’s largest electric vehicle manufacturers, is a leading player in the EV market. Its innovative EV offerings, technological advancements, and expanding market share in China’s EV landscape position it as a compelling choice for investors.
NIO stock is currently trading at a bargain valuation, according to the InvestingPro model. Shares could see an increase of 33.4% from Thursday’s closing price, bringing it closer to its ‘Fair Value’ of $9.87 per share.
Additionally, Wall Street has a long-term bullish view on NIO, with 26 out of 27 analysts surveyed by Investing.com rating the stock as either a ‘buy’ or a ‘hold’.
2. iQiyi - Streaming Services
Why It's Attractive: iQIYI (NASDAQ:IQ), often termed as China's Netflix (NASDAQ:NFLX), is a key player in the streaming industry. Despite recent challenges, its extensive content library and potential growth in China's digital entertainment market make it an intriguing stock in the streaming services space.
The present valuation of IQ stock suggests it's a bargain, as per the InvestingPro model. There's potential for a 44.2% surge from yesterday's close, aligning it with its 'Fair Value' estimated at $7.25 per share.
Moreover, Wall Street remains optimistic on the company, as per an Investing.com survey, which revealed that 17 analysts have a Buy-equivalent rating on the stock vs. seven Hold-equivalent ratings and no Sell-equivalent ratings.
3. Under Armour - Apparel and Sports Equipment
Why It's Attractive: Under Armour (NYSE:UA), a prominent sports apparel company, could benefit from renewed consumer spending on fitness and athletic wear. Its brand recognition and product offerings position it well in the apparel industry.
According to the InvestingPro model, UAA stock is presently priced well below its 'Fair Value.' Anticipated growth of 56.9% from yesterday's closing price could bridge the gap to $11.94 per share.
In addition, the sentiment among 28 analysts surveyed by Investing.com for Under Armour's future remains upbeat, with 27 advocating either a 'buy' or 'hold' position for the stock.
4. Melco Resorts & Entertainment - Hospitality and Gaming
Why It's Attractive: Melco Resorts & Entertainment (NASDAQ:MLCO) operates in the hospitality and gaming industry, particularly in Asia. As global travel resumes, Melco's exposure to the tourism and entertainment sectors could offer growth potential.
MLCO stock is trading at a bargain valuation, as indicated by the InvestingPro model. There's a possibility of a 33.2% increase from last night’s closing price, moving it closer to its 'Fair Value' set at $9.44 per share.
Furthermore, all 11 analysts surveyed by Investing.com rate Melco’s stock either as ‘buy’ or ‘neutral’, reflecting a bullish recommendation.
5. Playtika - Mobile Gaming
Why It's Attractive: Playtika (NASDAQ:PLTK) is a significant player in the mobile gaming industry. With a portfolio of popular games and the expanding reach of mobile gaming, Playtika represents potential growth in this thriving sector.
As per the InvestingPro model, PLTK stock is currently priced at a substantial discount. There's potential for a 53% climb from Thursday's closing price, edging it towards its 'Fair Value' of $12.30 per share.
In addition, Wall Street remains optimistic on Playtika, as per an Investing.com survey, which revealed that all 14 analysts covering the stock rated it as either a ‘buy’ or ‘hold’.
6. Dish Network - Telecommunications
Why It's Attractive: Dish Network (NASDAQ:DISH)'s entry into the wireless market positions it for potential growth in the telecom sector. Its efforts to build a 5G network and diversify its services present intriguing possibilities for investors.
Currently trading at a bargain according to several valuation models on InvestingPro, Dish Network’s stock presents an affordable opportunity for investors seeking exposure to the telecom sector. The ‘Fair Value’ price target for DISH stands at about $4.50, a potential upside of 36.9% from the current market value.
Moreover, according to the survey conducted by Investing.com among 19 analysts, the consensus on DISH remains largely bullish, with 16 suggesting either a 'buy' or 'hold' for the stock.
7. Zuora - Subscription Management
Why It's Attractive: Zuora (NYSE:ZUO) provides subscription management software, enabling companies to manage subscription-based business models. As businesses increasingly adopt subscription services, Zuora's solutions could see heightened demand.
The InvestingPro model indicates ZUO stock is currently extremely undervalued. There's a possibility of a 45.8% gain from the current price, bringing its towards its 'Fair Value' estimation of $11.84 per share.
Also, Wall Street remains optimistic on Zuora, as per an Investing.com survey, which revealed that five analysts have a Buy-equivalent rating on the stock vs. three Hold-equivalent ratings and zero Sell-equivalent ratings.
8. Petco Health and Wellness - Pet Care
Why It's Attractive: Petco Health and Wellness Company's (NASDAQ:WOOF) focus on pet care, along with the increasing trend of pet ownership, makes it an interesting player in the pet industry. As pet-related spending continues to rise, Petco's services will continue to be in demand.
Petco stock's valuation, as per the InvestingPro model, denotes it is trading at bargain levels. There's a projected increase of 30.7% from last night’s close, moving WOOF closer to its 'Fair Value' benchmark of $4.73 per share.
Despite the downtrend, Wall Street still has an optimistic view on Petco, with 14 out of 15 analysts surveyed by Investing.com rating WOOF stock as either a ‘buy’ or a ‘hold’.
9. Yalla Group - Social Media
Why It's Attractive: Yalla Group (NYSE:YALA) operates the largest social networking platform in the Middle East and North Africa. As digital connectivity grows in these regions, Yalla Group's platform could capitalize on this expanding market.
YALA stock is extremely undervalued, according to the quantitative models in InvestingPro, making it an enticing option for investors. Shares could see an upswing of 50.4% from Thursday’s closing price of $5.78.
10. 1-800-Flowers.com - E-Commerce
Why It's Attractive: 1-800-Flowers.com (NASDAQ:FLWS) has successfully adapted to the digital era, capitalizing on the e-commerce boom. Its diverse portfolio of gifting brands and solid online presence could position it well for continued growth.
It should be noted that the InvestingPro 'Fair Value' price projection for FLWR is $10.50 per share, suggesting a prospective gain of 25.3% from yesterday’s price.
Before investing in any stock, especially those priced under $10, thorough research and consideration of your investment goals are highly recommended. It's crucial to consider the company's financial health, industry trends, and your own risk tolerance before making any investment decisions.
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Disclosure: At the time of writing, I am long on the S&P 500, and the Nasdaq 100 via the SPDR S&P 500 ETF (SPY), and the Invesco QQQ Trust ETF (QQQ). I regularly rebalance my portfolio of individual stocks and ETFs based on ongoing risk assessment of both the macroeconomic environment and companies' financials.
The views discussed in this article are solely the opinion of the author and should not be taken as investment advice.