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 in the last 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 in their homes for most of 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. 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 139%, and the share price (8.90) remains comfortably below 10.
As the chart shows, the stock cooled off a bunch in the fall, but has been inching higher since November, establishing a nice-looking base in the past few weeks. A breakout to the upside looks highly possible.
Best Stocks Under $10: OPKO Health Inc. (OPK)
OPKO Health is a small-cap medical testing company that has performed a lot of COVID-19 tests in recent months. That’s been good for business: sales were up 87% in the most recent quarter, and are expected to grow 52% for full-year 2020 (earnings are due out in February). As a result, OPK stock is up a whopping 217% in the last year, despite a big August pullback.
Best Stocks Under $10: Hecla Mining Company (HL)
Gold and silver prices have been hitting multi-year highs as investors have sought them out as a safe haven against a recession and double-digit unemployment. And that’s been a boon for Hecla, a small-cap ($2.72 billion) junior silver miner based in Idaho. Hecla’s mining operations are prominent in Idaho’s so-called “Silver Valley,” which boasts the second-largest silver deposits in America. After falling for three whole years, HL has rebounded sharply along with many other silver stocks, zooming from a share price as low as 1.61 in March to as high as 6.97 earlier this month. It has since dipped back to the low 5s, but is still up 60% in the last year.
Like most mining stocks, HL is a more speculative play. But if you have the stomach for the potential share price gyrations, the general upward trend in this stock is clear, and this looks like a prime entry point.
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.