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Find Cheap Stocks Under $10 to Buy in July and Beyond

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The market fell again on Tuesday, as Wall Street took more chips off the table ahead of the June CPI print that’s due out Wednesday morning. The downward turn to start the week followed the Nasdaq’s first five-session winning streak of 2022.

It will likely prove difficult for the market to find any solid footing until Wall Street gains more clarity on multiple fronts. Thankfully, the rest of July should provide key data points, including updated inflation figures and the Fed’s next response, with its upcoming FOMC meeting set for July 26 and 27.  

Beyond consumer prices and the Fed, the heart of second quarter earnings season kicks off this week, with reports from the big banks such as JPMorgan and others. Company guidance is set to play an even bigger role in the coming weeks, as investors look for signs of cooling inflation, a possible recession, supply chain updates, and more.

Acknowledging all of the unknowns and headwinds, investors might still want to buy stocks because holding cash comes with an 8% inflation tax at the moment. And even in a bear market, there are winners to be found and long-term positions to be started.

Taking this all into account, we used one of our Zacks screens to help show investors how to find strong, highly-ranked stocks that are trading for under $10 per share to consider buying in July and later in the second half.

Penny Stocks

One dollar or less used to be the common threshold for what we call “penny stocks.” Today, the SEC has expanded penny stocks to securities that trade for less than $5 a share. Many investors avoid these stocks because they are speculative in nature.

Meanwhile, penny stocks often trade infrequently and hold wide bid/ask spreads. These stocks also carry many other traits that, in many cases, cause excessive volatility. With that said, some penny stocks perform incredibly well, which helps them remain attractive.

Stocks Under $10

Moving on, let’s briefly discuss the next class of cheap stocks. Stocks that trade in the $5 to $10 range are generally less risky than their penny stock counterparts. Investors might be more likely to have heard of these companies or seen the tickers. They are, however, still inherently more speculative than many other higher-priced stocks.

Investors can obviously find winning stocks for under $10 if they are extremely selective. So today, we narrowed the list of thousands of these more speculative stocks down to a more manageable group of $10 and under stocks that might help boost your portfolio.

Screen Parameters

• Price less than or equal to $10

• Volume greater than or equal to 1,000,000

• Zacks Rank less than or equal to 2

(No Holds, Sells or Strong Sells.)

• Average Broker Rating less than or equal to 3.5

(Average Broker Rating of a Hold or Better.)

• # of Analysts in Rating greater than or equal to 2

(Minimum of at least two analysts covering the stock.)

• % Change F1 Earnings Estimate Revisions -- 12 Weeks greater than or equal to 0

(Preferably upward earnings estimate revisions, but definitely no downward revisions.)

Here are two stocks out of over 60 highly-ranked names trading under $10 a share that made it through the screen today…

Newmark Group NMRK

Newmark Group (NMRK) is a commercial real estate mainstay that works within every phase of the property life cycle. The company offers services and products which include investment sales, debt and structured finance and loan sales, agency leasing, property management, valuation and advisory, and loan servicing. Newmark's suite of services and products are personalized to all parties from owners and occupiers to investors and startups and beyond.

The commercial real estate advisory firm’s revenue is projected to climb both this year and next. Plus, Zacks estimates call for Newmark’s adjusted earnings to jump 13% in FY22 and another 10% in 2023. NMRK has crushed our bottom-line estimates in the trailing four quarters and its outlook has held up. And Newmark’s dividend yields 1.2% at the moment.

Nerdy Inc. NRDY

Nerdy Inc. (NRDY) is a leading platform for live online learning, helping connect people of all ages to experts. Nerdy’s robust offerings provide learning experiences across 3,000+ subjects and multiple formats, including one-on-one instruction, small classes, and more. Nerdy’s current flagship offering is Varsity Tutors, which is one of the nation’s largest platforms for live online tutoring and classes. Overall, the firm stands to benefit as people crave more digital-focused learning in order to get ahead in school, advance their career goals, or whatever else their reasoning might be.  

Nerdy’s revenue is projected to climb 19% in 2022 and another 28% in 2023 to pull in $213 million. The company is projected to report a larger adjusted loss this year, but it’s expected to shrink that in FY23. Plus, Nerdy’s overall EPS outlook has improved recently. And seven of the nine brokerage recommendations Zacks has are “Strong Buys” or “Buys.”

Both stocks offer solid growth potential. Yet, it isn’t wise to pack your portfolio full of cheap, $10 or less stocks. Still, these stocks are certainly worth further investigation because grabbing a few of the top names from this list might bolster your returns. And let’s not forget that picking a few cheap stocks can also be quite fun.

Get the rest of the stocks on this list and start screening for the best stocks under $10 for yourself. And don't forget to backtest your strategy so you'll know how successful it's been before you put any of your money at risk.

Click here to sign up for a free trial to the Research Wizard today.

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Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance/.

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