There Aren’t Many Stocks Under $10 Worth Buying Right Now. These are Three Exceptions.
Before I get into the best stocks under $10 to buy right now, let me start with this disclaimer: share price doesn’t really matter.
As Warren Buffett is fond of saying, “Price is what you pay, value is what you get.” That’s true. Still, for someone starting a portfolio with just a couple thousand dollars, investing in 50 shares of a $10 stock seems way more appealing than investing in one share of a $1,000 stock.
If you want to diversify, you don’t want to devote half your portfolio to one share of Amazon (AMZN) or Google (GOOG). You can create a portfolio of 10 stocks even if you only have $2,000 or $3,000 to invest.
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To do it, however, you need to find low-priced stocks.
From there, it depends on what you’re looking for in your investments: long-term gains or a quick return in a prime turnaround stock candidate.
If you want to find the best stocks under $10 that you can buy and hold for a while, you should start with stocks that have already been trending upward for some time. A strong chart, after all, is one of the best indicators of future gains. For that, I screened for U.S. stocks with share prices under $10, that are up double digits this year. There weren’t many that met that criteria.
Here are the three U.S. companies with the highest valuations that made the list:
Best Stocks Under $10: ADT Inc. (ADT)
ADT is the leader in home security systems – chances are you might have one in your own home. And with people mostly in their homes for the past year, many people have taken the opportunity to add alarms, cameras, or other security measures to the place where they spend the vast majority of their time these days. As a result, ADT’s sales hit new quarterly records above $1.3 billion in the first and second quarters of 2020, and topped that number again in the fourth quarter. Meanwhile, profit growth is returning after years of slipping earnings.
The resurgence has injected much-needed life into ADT’s share price, which had gone nowhere but down since its January 2018 IPO. Since bottoming last March, however, ADT stock is up 149%, and the share price (9.62) remains below 10.
As the chart shows, the stock nosedived in late February in early March, but has recovered quite nicely, and is pushing up against six-month highs. It looks buyable right here.
Best Stocks Under $10: Coty (COTY)
A 117-year-old beauty company whose share price peaked six years ago doesn’t sound like the most appealing stock. Indeed, Coty’s strength so far this year (+41%) comes on the heels of the stock dipping as low as $2 a share in September 2020. But the rebound also has to do with this being a bona fide reopening stock – as retail stores have opened their doors to customers worldwide, Coty (which owns 77 brands that sell in beauty shops around the world) has benefitted; the company’s sales went from -$1.1 billion in the second quarter of 2020 to gaining $1.4 billion in the fourth quarter. Analysts expect sales growth to return by next year.
Best Stocks Under $10: Plains All American Pipeline (PAA)
With sector rotation in full swing, energy stocks have gotten a huge push from investors after years of being beaten down. And this mid-cap master limited partnership (MLP) has been no different. Plains All American is involved in pipeline transport, marketing and storage of liquefied petroleum gas and petroleum in the U.S. and Canada. The stock is up nearly 14% year to date, despite a whole lot of choppiness; going back further, it’s up more than 70% since late September. Add in a very high dividend yield (7.9%) and double-digit sales growth expected this year (+21%), and there’s a lot to like about PAA right now.
At a share price of 9.37 as of this writing, it might not qualify as a stock under $10 for long though…
Investment analyst and Chief Analyst of Cabot Wealth Daily, Chris Preston brings you all the latest from the investing world. Sign up to get updates and breaking news delivered FREE to your inbox. Get unlimited access to our library of complimentary investing reports.Sign up now!
*This post has been updated from an original version, published in 2017.