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 so far in 2020. As you might expect in this historically volatile year, there aren’t many that meet that criteria.
Here are the three U.S. companies with the highest valuations that made the list:
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 8 after topping 9 a couple months ago, for the first time since its first year of trading, and is up 31% in 2020 alone.
Meanwhile, the company expects to grow sales by 43.7% and earnings per share by 42.3% this year. That’s a very good trend! In terms of an entry point, however, I’d give the stock a few days to see how it reacts after such a sharp drop in the last week.
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 the year. As a result, OPK stock is up more than 150% this year, despite a big August pullback. With the stock now trading right at its 50-day moving line – and demand for COVID testing not waning anytime soon – this could be an ideal entry point.
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 ($2.67 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 6.65 in August. It has since dipped back to the low 5s, but is still up 48% for the 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.