The best cheap stocks to buy now.
Ten years into a bull market that's coincided with the longest economic expansion in American history, cheap stocks can seem hard to find. While a company's share price being in the single digits can by no means assure investors the stock is a steal, the rise of free stock trading apps like Robinhood has made investing accessible to millions of previously excluded Americans. Whether you don't have much to invest or you just enjoy the psychological allure of a low-priced stock, here are 10 of the best cheap stocks to buy under $10.
Sirius XM Holdings Inc. (ticker: SIRI)
Since Sirius and XM Radio merged in 2008, the combined Sirius XM Holdings has enjoyed a near-monopoly on satellite radio. It's built on that with the recent acquisition of Pandora, helping reignite rapid revenue growth; its audio products now reach more than 100 million people. Through the first quarter, SiriusXM had more than 29 million self-pay net subscribers, and expects to add around 1 million more in 2019. The company's returned nearly $900 million to shareholders between Jan. 1 and April 22, and expects record revenue of $7.7 billion in 2019. Recurring subscription revenue and partnerships with the auto industry to pre-install SiriusXM in new models should drive growth further.
Zynga, like Sirius, is one of just three stocks to repeat on U.S. News' annual list of the best cheap stocks to buy under $10 this year. The $5.8 billion mobile and online game developer saw a nice uptick in first quarter revenue last quarter, with sales jumping 27%. Bookings grew 64% and the company posted its best mobile and bookings performance ever. Two 2018 acquisitions of Gram Games and Small Giant Games help further diversify Zynga's revenue base, with five games (including Farmville, Slots, and Zynga Poker) each accounting for between 10% and 21% of revenue.
Century Casinos (CNTY)
The next of the best cheap stocks to buy below $10 is the second-smallest publicly traded resort and casino company on Wall Street. Century Casinos, a $280 million Colorado Springs-based gaming company, owns and operates Canadian racetracks and casinos in three different countries, and operates 10 ship-based casinos to boot. CNTY has a number of bullish factors in its favor: great long-term price appreciation, a low forward price-earnings ratio (16) and a decent chance of being acquired by a larger competitor in the coming years. Insiders think CNTY is cheap at $7 per share, having quickly bought up shares when CNTY breached that level last year. CNTY isn't far above that price floor today.
Nokia Corp. (NOK)
Cheap stocks to buy don't often come in the form of well-established global companies worth upwards of $28 billion. Nokia, the Finnish communication equipment giant, is one of the rare exceptions. Often companies that trade around the $5 level have undergone some major corporate or market-based trauma, but NOK is doing just fine; sales have grown 14% annually for the last five years. NOK will be one of the 5G stocks to watch in coming years, as it should benefit from helping telecoms upgrade their networks. On top of it all, Nokia pays a hefty 5.7% dividend and trades for a modest 13 times earnings.
Glu Mobile (GLUU)
One of Wall Street's more niche lessons in recent years is that it rarely pays to underestimate the demand for trivial entertainment. Billion-dollar businesses have been built on relatively small portfolios of mobile games, with Gluu Mobile fitting that mold. Current hit games include "Design Home," "Covet Fashion," and the "Tap Sports Baseball" franchise. Even without "Kim Kardashian Hollywood" as its bread and butter, revenue rose 18% in the first quarter, and analysts expect top-line growth above 16% in both 2019 and 2020. Zero debt, a nice pipeline and a forward P/E of 14 make GLUU an attractive cheap stock to buy, especially after a recent pullback.
Vipshop Holdings Limited (VIPS)
Vipshop is a well-established Chinese online discount retailer worth around $5.2 billion. Once a growth machine with eye-popping surges in revenue reminiscent of Alibaba Group Holding (BABA), Vipshop's growth rapidly decelerated in recent years and investors soured on the name. That's excellent news for patient, long-term investors looking for undervalued cheap stocks to buy. After all, VIPS is still growing both revenue and earnings; it also has practically zero debt and goes for just 9.4 times forward earnings. Despite its quality business, VIPS' price-sales ratio (0.44) is the lowest of any publicly traded Chinese retailer. A recent acquisition of Shan Shan Outlets gives it a foothold in offline retail as well.
Vereit is a $9.1 billion real estate investment trust. Its focus is U.S. single-tenant commercial properties, with an incredibly large and diversified portfolio of nearly 4,000 locations spanning 49 states and Puerto Rico. It has over 650 different tenants in 42 industries, which largely insulates it from wild volatility associated with more concentrated portfolios. Like all landlords, VEREIT prefers reliable tenants, which is why its top 10 lessees are all well-known businesses; those lessees include the likes of Walgreens Boots Alliance (WBA), Family Dollar (DLTR) and CVS Health Corp. (CVS). VER currently boasts a 6.1% dividend yield. A 98.9% occupancy rate and 8.7-year weighted average remaining lease term should provide some long-term stability.
Israeli tech company Camtek designs, manufactures and markets highly accurate inspection and measurement systems for the semiconductor industry. Conducting quality assurance for semiconductor wafers isn't an aspect of industry that immediately comes to mind, but it's an important service for a high-volume business where performance is the selling point. Camtek's solutions are a great tool for achieving a "six sigma" manufacturing process, a gold standard for minimizing error in which 99.999966% of all production is expected to be defect-free. At 10 times forward earnings and no debt, CAMT's business, which is seeing double-digit sales growth, looks attractive. Granted, the small-cap ($322 million market cap) carries above average volatility risk.
MFA Financial (MFA)
The third name to make a repeat appearance as one of the 10 best cheap stocks to buy under $10 is mortgage REIT MFA Financial. First off, there's no denying that the quality of MFA's mortgage-backed securities portfolio isn't the easiest thing to interpret -- the 2008 crisis taught investors how tricky those could be. But for investors willing to hold and monitor the general health of the mortgage industry, MFA has tended to be a low-volatility, extremely high dividend stock for years. Trading between $6 and $9 a share for five years, sustained low interest rates bode well for MFA's leverage-centric business model. It currently yields 11%.
Celsius Holdings (CELH)
The last of the cheap stocks under $10 is Celsius Holdings, a $250 million Florida company that makes health drinks under the Celsius brand. It currently offers 13 flavors, some sparkling and some carbonated, with seven also available in powdered form. Checking all the boxes for the consumer trend toward more health-conscious living, Celsius-brand drinks are gluten-free, soy-free, kosher, non-GMO, and free of preservatives and high fructose corn syrup. Sales have soared from $14.6 million in 2014 to an expected $66 million in 2019, and shares have also run up from under $1 to over $4 in that time, though the company is not yet consistently profitable.
The best stocks to buy that are less than $10:
-- Sirius XM Holdings Inc. (SIRI)
-- Zynga (ZNGA)
-- Century Casinos (CNTY)
-- Nokia Corp. (NOK)
-- Glu Mobile (GLUU)
-- Vipshop Holdings Limited (VIPS)
-- Vereit (VER)
-- Camtek (CAMT)
-- MFA Financial (MFA)
-- Celsius Holdings (CELH)
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