Investing in stocks under $10 could significantly increase the returns on your portfolio, especially if you pick the right stock. Also, if you select the stocks of companies in promising industrial sectors or those that have a unique and popular product or service, you stand a much better chance of selling your stock for a tidy profit after the shares have had a chance to appreciate.
Highlighted Stocks Under $10:
Overview: Best Stocks Under $10
Our diversified list of the best stocks in this category includes stocks representing a gold miner, a mobile gaming platform, a telecommunications company, a biopharmaceuticals firm, and an engineering products and industrial services company.
- Gold Fields Ltd. is an international gold producer that operates nine mines in Australia, Peru, Chile, and South and West Africa.
- Zynga Inc. is an online gaming platform and a leading developer of some of the most popular social games played on the internet. Millions of people use this gaming platform every day.
- Vonage Holdings Corp. is one of the original providers of the Voice over Internet Protocol (VoIP) that allows users to make telephone calls over the internet. Vonage provides an excellent unified communications platform for businesses.
- Altimmune Inc. is a clinical stage pharmaceutical company specializing in developing treatments for liver disease, chronic hepatitis B, cancer and intranasal vaccines.
- Harsco’s history dates back to 1853 when its predecessor, the Harrisburg Car Manufacturing Company, produced railroad freight cars. The company’s services now include providing material processing and environmental services to the global metal and steel industries, as well as railway track maintenance services worldwide.
Another advantage of stocks under $10 is that some of these stocks can make a good choice for short and medium-term trading strategies. Buying shares of a lower dollar amount also limits your exposure to risk, since the stock already sells for a low price. The lowest that price can go is zero. Investing in high-priced stocks means you generally have a lot more to lose in the event of a sharp stock market downturn as traders have seen in the recent past.
Investing in any stock carries the inherent risk of the insolvency of the company and other adverse events that can lead to a decline in the stock’s value. This can cause you to lose your entire investment. Some stocks under $10 can suffer from liquidity issues, which can adversely affect your ability to transact large amounts.
Best Online Brokers for Best Stocks Under $10
If you want to start buying stocks under $10, as well as stocks under $20 and stocks under $5, any reputable broker that can facilitate stock transactions on U.S. exchanges can buy stock for you. Some of them will even let you trade commission-free, such as Robinhood, for example.
Other commission-free online brokers you can buy stocks under $10 with include TD Ameritrade and E*TRADE. More experienced, well-funded and active traders can use Interactive Brokers, although that broker does charge inactivity fees and has a high minimum deposit requirement.
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Features to Look for in Best Stocks Under $10
- Desirable product or service: When selecting a lower-priced stock, one of the first considerations for an investor is whether the company makes a product or service currently in demand and that holds promise for future earnings.
- Good financials: The financials of a lower-priced stock show the company’s assets and liabilities, so you want to look for a company with a solid financial situation. Reviewing financial statements might also indicate any challenges the company is facing that have caused the stock to sell off or if the company’s earnings per share (EPS) have yet to reflect future business possibilities.
- Liquidity: Since liquidity can be an issue with low-priced stocks, you should typically look for those with a minimum daily volume of at least 1 million shares. Liquidity in the stock allows you to transact shares quickly and it gives you the opportunity to trade short-term strategies that work well for inexpensive stocks.
Best Stocks Under $10 to Watch Out for This Year
Benzinga’s best stocks under $10 list includes firmly established companies as well as relatively new companies with a viable product or service.
1. Gold Fields Ltd (NYSE: GFI)
Gold Fields Ltd stock is definitely a gold play. The company operates mines around the world and could be a good way to diversify your portfolio to indirectly include exposure to the price of gold. Because of a recent rise in geopolitical uncertainty, the price of gold has appreciated considerably in recent months. Gold Fields stock has also been upgraded by a number of analysts to a “strong buy” and it has shown rising earnings due to the rally in gold prices.
2. Zynga Inc. (NASDAQ: ZNGA)
According to 13F filings made with the Securities and Exchange Commission (SEC), Zynga stock was revealed to be favored by hedge funds. The company’s trailing 12-month (TTM) EPS are $0.06. Despite trading close to the top of its yearly range, Zynga’s stock price could see a breakout to higher levels.
3. Vonage Holdings Corp. (NASDAQ: VG)
Vonage Holdings Corp. has been a name to reckon within the field of VoIP and now has an integrated unified communications network used by thousands of businesses worldwide. The company prides itself on operating the world’s most flexible cloud communications network, although it competes with similar free and low-cost services like Google Voice. While this company’s TTM EPS are currently negative at -$0.09, many analysts consider the tech company’s stock a viable investment given its current low price level.
4. Altimmune Inc. (NASDAQ: ALT)
Altimmune emerged as the developer of a single-dose intranasal vaccine against COVID-19 during the recent coronavirus pandemic and it also has an influenza vaccine candidate called NasoVAX. Altimmune stock shot up in February of 2020 after news that the company had completed the design and synthesis of its coronavirus vaccine. The closely-watched product is now advancing towards tests on animals despite the ethical issues with doing so and the possible inapplicability to humans. The company has recently appointed former Pfizer and GlaxoSmithKline executive Diane Jorkasky to its board of directors.
5. Harsco (NYSE: HSC)
Harco specializes in specialty industrial machinery and railroad track maintenance, which makes the low-priced stock highly-defensive in the event of a market downturn. With a wide 52-week range of $4.19 to $27.97, Harsco stock also has intrinsic value at its current level in the form of earnings and assets. The stock currently shows a decent EPS of $6.09 and trades at just 1.86 times earnings, so it should make a decent investment over the medium or long term if you can purchase it below $10 a share.
Biggest Stocks Under $10 Movers of the Day
Any of the stocks listed above could have big moves as a result of extraordinary earnings, a takeover bid by another company or other impacting news releases. With respect to big premarket movers, Gold Fields would be the most likely stock to show considerable action before markets open due to its exposure to the gold market that trades around the clock.
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Are Stocks Under $10 Worth Buying?
The answer to this question is a resounding “Yes!” A low-priced stock with a viable product or service, decent financials and a liquid market can provide you with a good store of wealth, an appreciating asset and/or an adequate vehicle for short-term trading.
You do have to choose carefully since some stocks under $10 are definitely headed for insolvency and you could lose your entire investment. Still, depending on your risk profile and your financial goals, buying stocks under $10 as an investment could make a lot of sense and could provide you with a handsome return if you pick the right stock.
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