Only a Few Stocks Under $10 are Worth Buying Right Now. And One in Particular Stands Out.
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 stocks with share prices under $10, that are up double-digits so far this year.
Here are the only three U.S. companies that made the list:
Best Stocks Under $10: Sprint (S)
Remember Sprint, the Kansas-based telecommunications company that seemingly went out of style with the flip phone? Well, it’s not dead yet – and neither is Sprint stock. Shares of S are up 23% year to date, and the stock has been trading above its moving averages since a big earnings-fueled gap up in May. Despite the good year, S stock still trades in the $7 range.
As for the company, it’s still the fourth-largest mobile-network operator in the U.S. And while Sprint will never regain its dot-com era prominence – when the stock traded well over $70 a share! – it’s in better shape now than it was a year ago, though I wouldn’t necessarily add it to your long-term investment portfolio, with earnings on steady decline.
Best Stocks Under $10: VEREIT, Inc. (VER)
As you may have guessed from the name, VEREIT is a REIT (Real Estate Investment Trust). More specifically, it’s a REIT with $15.6 billion in assets and 3,980 properties covering 94.7 million feet. Its top 10 tenants include Red Lobster, Walgreens, Family Dollar, FedEx, CVS and PetSmart.
With the U.S. retail climate improving, VER stock is climbing: it’s up 23% year to date despite a fairly sharp drop-off in the last month. And yet it still fits our criteria at just $8 per share.
Best Stocks Under $10: Zynga (ZNGA)
Yep, Zynga. This maker of social media video games was a complete disaster in its first year as a public company, in 2011-12. After rising to $14 in the first two months following its IPO, ZNGA completely cratered, dipping all the way to $2 by the end of 2012. It was below $2 as recently as 2016; now it’s up to $6 for the first time since its first year of trading, and is up a whopping 63% in 2019 alone.
Meanwhile, the company expects to grow sales by 52% and earnings per share by 35% this year. That’s a very good trend!
The Best Stock Under $10
While these are the best stocks under $10 to buy now, there wasn’t a ton of competition. These are the only three U.S. large-cap stocks with double-digit returns so far this year. So while a stock like ZNGA does look mighty appealing for the long term all of a sudden, given its top- and bottom-line growth and serious share price momentum, Sprint is far more iffy given its lack of growth and more modest stock chart.
You could buy all three of these low-priced stocks. But if I had to pick one, ZNGA is the easy choice.
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.