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Best Stocks Under $5

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Searching for quality stocks under $5 is a lot like bargain hunting. Low prices allow you to buy these stocks in large quantities without stretching your wallet. The payoffs can be huge, but so can the volatility. 

We’ve put together everything you need to know about stocks under $5. Take a look at our top picks for bargain stocks that show the most potential. 

Highlighted Stocks Under $5

Symbol Company Change Price
NIO NIO
+ 0%
$4.68
PLUG Plug Power
+ 0%
$4.15
CPRX Catalyst Pharmaceuticals
+ 0%
$4.50
NOK Nokia
+ 0%
$4.31
APHA Aphria
– 0.33%
$4.48

Overview: Stocks Under $5

Stocks that trade under $5 are considered cheap stocks. But unlike stocks under $10 or stocks under $20, stocks under $5 are in a separate category. The Securities and Exchange Commission (SEC) considers stocks that trade under $5 to be penny stocks. 

Let’s say you invest $300 for 100 shares of a stock trading at $3. If that stock price goes up by only $3, you will have made 100% in profit, or $300. Huge payoffs for little upfront capital is what makes cheap stocks an attractive investment. 

A strategy for spotting potential in stocks under $5 is to look out for undervalued companies. Companies that have suffered a crisis might see stock prices dip into the low single digits. Executive mismanagement, high debt, pricing pressures and increased competition are some of the factors that spook investors and send a company’s stock sinking. 

But the company might be able to turn things around. Management can change, debt can be restructured or the market could shift in the company’s favor. Everyone loves a comeback — especially if you’ve scooped up that stock for a bargain.

Another way to spot a potential winner is by looking at companies that have major growth potential. A stock could trade under $5 because the company is small. But that small company could also be rapidly growing.

Take a look at how the market is performing. These strategies are just the beginning. Always do your due diligence when investing in stocks under $5. 

Best Online Brokers for Stocks Under $5

The right online broker can help you execute your investment strategy and make trading cheap stocks seamless. Take a look at some of Benzinga’s favorites. 

Commissions
Free
Account Min
$0
Get started securely through Webull’s website
Commissions
Free
Account Min
$0
1 Minute Review

Best For
Pros
Cons
TD Ameritrade
Commissions
$0 $6.95 for OTC Stocks
Account Min
$0
Get started securely through TD Ameritrade’s website
Commissions
$0 $6.95 for OTC Stocks
Account Min
$0
1 Minute Review

This publicly listed discount broker, which is in existence for over four decades, is service-intensive, offering intuitive and powerful investment tools. Especially, with equity investing, a flat fee is charged, with the firm claiming that it charges no trade minimum, no data fees, and no platform fees. Though it is pricier than many other discount brokers, what tilts the scales in its favor is its well-rounded service offerings and the quality and value it offers its clients.

Best For
  • Novice investors
  • Retirement savers
  • Day traders
Pros
  • World-class trading platforms
  • Detailed research reports and Education Center
  • Assets ranging from stocks and ETFs to derivatives like futures and options
Cons
  • Thinkorswim can be overwhelming to inexperienced traders
  • Derivatives trading more costly than some competitors
  • Expensive margin rates
JP Morgan Chase
Commissions
$0
Account Min
$0
Get started securely through JP Morgan Chase’s website
Commissions
$0
Account Min
$0
1 Minute Review

Chase You Invest is the retail brokerage arm of JP Morgan Chase, the largest bank in the United States. While most of the firm’s products are targeted toward wealthy clientele, You Invest gives novice investors a chance to learn about markets, select the best securities and plan for future goals like retirement. No futures, forex, or margin trading is available, so the only way for traders to find leverage is through options. 

Not all investors will appreciate the basic setup and simplistic trading suggestions, but plenty more want to learn about markets but just don’t know where to get started. Chase You Invest provides that starting point, even if most clients eventually grow out of it.

Best For
  • Investors using Chase banking products
  • Mobile traders
  • Retirement savers
Pros
  • Easy to navigate
  • Functional mobile app
  • Cash promotion for new accounts
Cons
  • No forex or futures trading
  • Limited account types
  • No margin offered

Features to Look for in Stocks Under $5 

Here are some things you may want to consider as you gather stocks under $5 into your basket:

  • Earnings per share: A great way to get a sense of a company’s profitability is by looking at its earnings per share (EPS). You can find a company’s EPS by subtracting the preferred dividends from net income and then dividing the difference by outstanding stockholder shares. If you spot a stock with EPS that has been growing, it can signal growth potential. 
  • Trading volume: A stock’s trading volume will tell you how many shares are traded during the day. If the trading volume isn’t high enough, you may not be able to sell your position. Stocks that have a trading volume of at least 1 million tend to be safer. Keeping an eye on the trading volume will also help you spot stocks that may be on the uptick. 
  • Management: A management team that is set on turning the company around can be the reason a stock under $5 enjoys a boost. A company’s focus on capitalizing on a growing market is another sign of potential. Look into the company’s strategic business plan to understand the mindset of management.

Stocks Under $5 to Watch Out for This Year

There’s no guarantee that a stock trading under $5 will skyrocket. Some are likely to be more successful investments than others. These stocks are all trading for a few dollars at the moment but show the potential for more. 

1. Aphria (NYSE: APHA)

Symbol Company Change Price
APHA Aphria
– 0.33%
$4.48

Aphria is a pharmaceutical company based in Leamington, Canada, that researches, produces and distributes marijuana. It is 1 of the largest marijuana companies in the Canadian market, which recently legalized recreational marijuana use. The company targets both the medical and recreational marijuana market segments.

Aphria remains committed to capitalizing on the emerging Canadian and global marijuana market. The company has invested heavily in product innovation and expanding operations worldwide. Acquisitions of LATAM holdings and CC Pharma have allowed it to enter Latin American and German markets.

2. Catalyst Pharmaceuticals Inc. (NYSE: CPRX) 

Symbol Company Change Price
CPRX Catalyst Pharmaceuticals
+ 0%
$4.50

Catalyst Pharmaceuticals is a biopharmaceutical that researches, develops and commercializes FDA-approved treatments for patients with rare neuromuscular and neurological diseases. 

Located in Coral Gables, Florida, the company’s latest FDA-approved drug, Firdapse, treats adults with LEMS. LEMS is an autoimmune disorder in which the body’s immune system attacks the body’s own tissue. The drug is currently in clinical trials for the treatment of other diseases like myasthenia gravis and spinal muscular atrophy. 

Catalyst Pharmaceuticals reported its 1st positive annual EPS in 2019. Its most recent EPS came in at $0.30. The company boasts a robust balance sheet with over $101 million in cash and investments with no funded debt. 

3. Nio Inc. (NYSE: NIO) 

Symbol Company Change Price
NIO NIO
+ 0%
$4.68

Nio designs, manufacturers and sells premium electric vehicles, autonomous vehicles and related technologies and services. 

NIO has competed in the ABB FIA Formula E Championship since its beginning in 2014. The company also secured the inaugural FIA Formula E Drivers’ Championship in July 2015. Its most recent initiatives include a clothing line collaboration with fashion designer Chalayan. 

The Shanghai, China-based company focuses heavily on product innovation and customer experience. The lack of accessibility to charging stations is 1 of the major roadblocks to large-scale electric vehicle adaptation. NIO helps eliminate this problem by offering charging solutions that include home charging stations, battery swaps and a 24-hour on-demand pick up and drop off service. The company reported an EPS of $-44.1.

4. Nokia (NYSE: NOK) 

Symbol Company Change Price
NOK Nokia
+ 0%
$4.31

Nokia is a multinational telecommunications, information technology and consumer electronics company based in Espoo, Finland. Nokia engages with service providers, industry, public sector and consumers worldwide. It remains committed to innovation and next generation technology with a focus on developing and deploying 5G networks. 

The company has undertaken many acquisitions to cement its position as a global leader in next-generation technology innovation. These include award-winning Bell Labs, SpaceTime Insight and Elenion. The company has recently reported an EPS of $-0.19. 

5. Plug Power Inc. (NASDAQ: PLUG)

Symbol Company Change Price
PLUG Plug Power
+ 0%
$4.15

Plug Power is an electrical equipment manufacturing company based in Latham, New York. The company designs and manufactures hydrogen fuel cell technology. Hydrogen fuel cell technology is a sustainable energy alternative to traditional batteries that vehicles and heavy equipment machinery can efficiently use. 

Plug Power’s largest customers include Amazon and Walmart. Its technology helps power forklifts and other machinery in the warehouses of these retail giants. 

The company has achieved over 300% revenue growth since 2013. Its EPS has significantly increased over the past several years. It’s most recent EPS came in at $-0.35. 

Biggest Stocks Under $5 Movers of the Day

Make sure to periodically check premarket movers of the day to identify stocks that are outperforming others. 

Gainers

Session: Jun 1, 2020 4:00 pm – Jun 2, 2020 3:59 pm
Symbol Open Close Change Change % Volume
Buy AMRH Stock – Trade for Free AMRH
Ameri Holdings
1.34 2.87 1.53 114.17% 42.37M
Buy PGEN Stock – Trade for Free PGEN
Precigen
2.16 3.97 1.81 83.80% 16.69M
Buy BHTG Stock – Trade for Free BHTG
BioHiTech Global
1.12 1.73 0.61 54.46% 2.85M
Buy GNUS Stock – Trade for Free GNUS
Genius Brands Intl
2.62 3.98 1.36 51.72% 81.43M
Buy MREO Stock – Trade for Free MREO
Mereo BioPharma Group
1.27 1.90 0.63 49.75% 1.32M
Buy LTM Stock – Trade for Free LTM
LATAM Airlines Group
1.21 1.66 0.45 37.19% 23.77M
Buy ARTL Stock – Trade for Free ARTL
Artelo Biosciences
1.20 1.61 0.41 34.17% 1.31M
Buy MOGU Stock – Trade for Free MOGU
MOGU
1.24 1.62 0.38 30.40% 14.07K
Buy MTC Stock – Trade for Free MTC
MMTEC
2.15 2.80 0.65 30.23% 47.80K
Buy MGI Stock – Trade for Free MGI
MoneyGram
2.59 3.37 0.78 30.08% 18.85M
Buy IRIX Stock – Trade for Free IRIX
Iridex
1.92 2.48 0.56 29.17% 12.93K
Buy HYRE Stock – Trade for Free HYRE
HyreCar
2.25 2.80 0.55 24.44% 62.65K
Buy NNDM Stock – Trade for Free NNDM
Nano Dimension
2.48 3.06 0.58 23.29% 14.32M
Buy PLYA Stock – Trade for Free PLYA
Playa Hotels & Resorts
2.82 3.45 0.63 22.34% 7.56M
Buy SCKT Stock – Trade for Free SCKT
Socket Mobile
1.22 1.48 0.26 21.31% 1.06M
Buy HALL Stock – Trade for Free HALL
Hallmark Financial Servs
2.30 2.79 0.49 21.30% 32.13K
Buy ALNA Stock – Trade for Free ALNA
Allena Pharmaceuticals
2.21 2.68 0.47 21.27% 2.86M
Buy RUHN Stock – Trade for Free RUHN
Ruhnn Holding
3.00 3.63 0.63 21.00% 30.13K
Buy GOL Stock – Trade for Free GOL
Gol Intelligent Airlines
4.83 5.81 0.98 20.29% 1.94M
Buy VTSI Stock – Trade for Free VTSI
VirTra
3.40 4.08 0.68 19.99% 41.02K

Losers

Session: Jun 1, 2020 4:00 pm – Jun 2, 2020 3:59 pm
Symbol Open Close Change Change % Volume
Buy CETX Stock – Trade for Free CETX
Cemtrex
2.58 1.79 -0.79 -30.62% 11.91M
Buy ADRO Stock – Trade for Free ADRO
Aduro Biotech
3.37 2.58 -0.79 -23.44% 1.54M
Buy ALRN Stock – Trade for Free ALRN
Aileron Therapeutics
1.47 1.18 -0.29 -19.80% 1.47M
Buy FMCIW Stock – Trade for Free FMCIW
Forum Merger II Corporation – Warrant
2.88 2.35 -0.54 -18.58% 1.09M
Buy SAMAW Stock – Trade for Free SAMAW
Schultze Special Purpose Acquisition Corp. – Warrant
1.26 1.06 -0.20 -15.79% 56.67K
Buy RNWK Stock – Trade for Free RNWK
RealNetworks
1.73 1.46 -0.27 -15.59% 1.30M
Buy DGLY Stock – Trade for Free DGLY
Digital Ally
1.97 1.69 -0.28 -14.21% 10.64M
Buy ELTK Stock – Trade for Free ELTK
Eltek
4.68 4.02 -0.67 -14.21% 14.58K
Buy NWGI Stock – Trade for Free NWGI
Newgioco Group
3.62 3.14 -0.48 -13.26% 59.40K
Buy MKGI Stock – Trade for Free MKGI
Monaker Group
1.44 1.28 -0.16 -11.11% 12.37K
Buy TLGT Stock – Trade for Free TLGT
Teligent
3.56 3.17 -0.39 -10.96% 28.82K
Buy AFI Stock – Trade for Free AFI
Armstrong Flooring
3.49 3.11 -0.38 -10.89% 14.52K
Buy NTN Stock – Trade for Free NTN
NTN Buzztime, Inc. Common Stock
1.06 0.95 -0.11 -10.38% 22.91K
Buy SLGG Stock – Trade for Free SLGG
Super League Gaming
3.47 3.11 -0.36 -10.25% 40.06K
Buy NES Stock – Trade for Free NES
Nuverra Environmental Solutions, Inc. Common Stock
1.47 1.32 -0.15 -10.20% 0.64K
Buy LTRPA Stock – Trade for Free LTRPA
Liberty TripAdvisor Hldgs
2.97 2.69 -0.29 -9.60% 1.28M
Buy CLRB Stock – Trade for Free CLRB
Cellectar Biosciences
1.47 1.33 -0.14 -9.52% 37.00K
Buy MXC Stock – Trade for Free MXC
Mexco Energy Corporation Common Stock
3.11 2.82 -0.29 -9.32% 1.17K
Buy IMRN Stock – Trade for Free IMRN
Immuron
2.17 1.97 -0.20 -9.22% 3.50K
Buy DFFN Stock – Trade for Free DFFN
Diffusion Pharmaceuticals
1.24 1.13 -0.11 -8.87% 3.06M

Weigh Risk for Stocks Under $5

Cheap stocks have potential growth and a fair share of risks. Stocks under $5 are notorious for major upswings and downfalls. Your risk for loss is also higher if the company hits a difficult roadblock. It’s not unheard of for companies with shares trading under $5 to go under and leave investors with nothing. 

Avoid putting all your money into these stocks and diversify with safer assets like blue-chip stocks or bonds. Stocks under $5 can be a valuable addition to your investment portfolio with your due diligence and diversification.

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