Best stocks under $10 to buy in August 2023
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BLUEPRINT
Updated 6:00 a.m. ET Aug. 2, 2023
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Identifying high-quality stocks with share prices of less than $10 can be like navigating a minefield of horrible investments. That’s because a low share price could be an indicator that something major is wrong with a company’s underlying business.
“When you’re selecting what stocks to buy, focus on analyzing whether it’s a good business. Look at key ratios like profit margins, return on equity and revenue growth,” says Alvin Carlos, a certified financial planner and managing partner at District Capital Management.
But there are some unpolished gems in the $10 stock market bargain bin. The stocks chosen for this list demonstrate attractive business metrics, including profitability and long-term growth potential.
We identified stocks with share prices of $10 or less with strong fundamentals, Wall Street “buy” consensus, at least $50 million in market capitalization and forward earnings of less than 14.
Why trust our investing experts
Experienced stock analysts select our best stock selections based on screening for several must-have metrics. These metrics often include but are not limited to forward price-to-earnings, risk, earning stability and Wall Street “buy” consensus. Among all of our 70-plus stock selections, the average return beats the S&P 500. But investors should note that before purchasing any stocks, it’s important to do plenty of research and ensure their selections align with their financial goals and risk tolerance. You can read more about our methodology below.
Compare the best stocks under $10
Methodology
The best stocks under $10 included above all trade on a major U.S. stock exchange and meet the following criteria:
- An Altimeter overall grade of B or higher (as of March 2023). The overall grade considers profitability, earning stability, valuation, and earning expectations. Grades of B or higher for both are stocks ranked in the top quarter of nearly 5,000 stocks in Altimeter’s stock database, which indicates that these companies have strong valuations and can improve returns.
- Market capitalization of at least $50 million. Stocks with microcaps under $50 million are considered nanocap stocks and are often among the most volatile and risky stocks listed on major exchanges. Nanocap stocks often have low trading volumes and limited liquidity.
- Consensus analyst recommendation of “buy” or better. A strong number of analyst “buy” ratings indicates an expectation the stock will outperform the overall market. At least one “buy” rating by a Wall Street analyst is a vote of confidence from a professional stock picker.
- Forward earnings multiple of less than 14. Based on analysts’ projected future earnings, stocks with low forward earnings multiples are considered attractively valued.
Why other stocks didn’t make the cut
Just because a stock has a low share price doesn’t mean it is an attractive buying opportunity. Good stocks that are priced at $10 or less are few and far between. Companies with low share prices often have challenged business models.
To access business fundamentals, we screened for a stock’s earning power for profitability in relation to its asset base and whether the company is improving its earning power.
Final verdict
Buying stocks priced under $10 is not for the faint of heart. Many of these stocks are extremely volatile and high-risk speculative investments, but some diamonds in the rough have the potential for extremely large long-term gains.
You can limit the risks of investing in cheap stocks by diversifying your portfolios rather than making large bets on one or two stocks.
You can buy cheap stocks or fractional shares of expensive stocks for as little as $10. The key to long-term investing success is not about how much money you start with but about compounding returns and consistent contributions.
The ability to make money off $10 stocks depends on various factors, such as market conditions, the company’s financial performance, and the stock’s potential for growth. While investing in lower-priced stocks may provide an opportunity for higher returns, it also comes with risks, such as increased volatility and the potential for significant losses.
It’s essential to carefully evaluate the potential risks and rewards before investing in any stock, regardless of its price.
Investing in cheap stocks can provide valuable lessons for investors, especially beginners.
By investing in lower-priced stocks, investors can learn about market conditions, company fundamentals, and the risks and rewards associated with investing. Additionally, investing in cheap stocks provides an opportunity to diversify their portfolio and achieve higher returns.
But it’s important to approach investing in cheap stocks with caution and a solid understanding of investment principles, as they can also come with increased risks.
Any brokerage that allows fractional stock trading allows its users to invest in any qualified stock for as little as $10. Remember that some brokerages may restrict fractional trading of certain stocks, such as those with lower share prices or smaller market capitalizations.
Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.
Blueprint has an advertiser disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.
