Buying cheap stocks – or perhaps we should call them low-priced stocks – is a widespread investment practice. It’s much easier to buy up many shares of cheap stocks under $10 than to buy a stock priced at $100 or more.
Cheap stocks have other advantages, too. A stock can be cheap because it’s relatively new and unproven. That means that it has massive growth potential should it catch fire. Or, it could be a prime acquisition target should a bigger, better-financed company come along and scoop it up.
Or you may find a cheap stock from a more established company that has fallen on hard times. I tend to look at these names more skeptically because nobody wants to catch a falling knife. It’s not impossible to find great stocks under $10 in this category – but they aren’t common either.
For this exercise, I used the Portfolio Grader to evaluate stocks priced at less than $10 and grade them on an “A” through “F” scale. The Portfolio Grader identified several excellent cheap stocks now based on metrics such as earnings performance, growth, momentum, analyst sentiment and more.
But one warning – stocks under $10 can be volatile, particularly if they are newer companies. But if you know your risk tolerance, you shouldn’t be afraid to make a good investing decision.
Locafy (LCFY)
Headquartered “down under” in Australia, Locafy (NASDAQ:LCFY) was known until 2021 as Moboom Limited.
The company is a search engine optimization specialist and helps companies get better visibility on the web.
SEO is a lifeline for many companies looking to connect with customers. And when search engines change their algorithms, as they do from time to time, it can devastate companies trying to market their products.
Locafy works with local, national and brand-focused businesses. It claims to have more than 1,600 clients and more than 150 resellers that market the company’s SEO technology.
Locafy only reports results twice a year. Earnings for the first half of fiscal 2023 (ending Dec. 31, 2022) include revenue of 2.83 million Australian dollars ($1.85 million), a 58% increase from a year ago.
Monthly recurring revenue was up 40%, and the total user end count was up 79%. Locafy pages had an average Page 1 performance of 59% and appeared in the top three positions of the first search page 41% of the time.
But growth comes at a cost, as the company more than doubled its loss in the period to nearly 4 million Australian dollars.
I’m not worried about the company’s loss as it scales the business, which is why it makes my list of cheap stocks under $10. LCFY stock gets a “B” rating in the Portfolio Grader.
Elys Game Technology (ELYS)
Elys Game Technology (NASDAQ:ELYS) is a business-to-business tech gaming company that provides a betting platform to companies that want to offer sports and virtual betting products, online casinos, slot games, poker, bingo, lottery and interactive games.
The company has more than 82,000 online user accounts in Italy, providing a full suite of gaming products and services, including sports betting, esports, casino games, slots and more.
Now the company’s focused on growing its North America division to help gaming companies get customers offers cybersecurity and payment functions, and provides the software companies need to run sportsbooks.
It’s heavily pushing its brand in the Americas to promote its sports betting platform, hoping to install its sportsbooks in restaurants, bars, and other businesses. It projects that with its national rollout, it will have 750,000 online user accounts and aims to be working with the Ohio Lottery this year.
The gaming industry is competitive but has room to grow – particularly if the online interface is easy to use. ELYS stock has a “B” rating in the Portfolio Grader.
PainReform (PRFX)
PainReform (NASDAQ:PRFX) is now priced at less than $10, but it may not be in this category of stocks under $10 for long. The stock is up more than 1,600% this year and rose as high as $16 per share in early July.
The big driver for this Israeli biotech stock’s growth appears to be the successful closing of a $2.7 million and a subsequent $1.5 million offer this summer. The registered direct offerings were priced at $9 per share and fully subscribed, so the stock price jumped accordingly.
PainReform is in Phase 3 trials for its PRF-110 drug that, if approved, would be deposited onto surgical wounds to provide pain management. Pain management is an essential part of the healing process, so PainReform’s product would have immediate interest.
The stock has a “B” rating in the Portfolio Grader.
ClearOne (CLRO)
ClearOne (NASDAQ:CLRO) is built to prosper in today’s new reality, where people are much more comfortable working from home. Just think about it – how many times before the Covid-19 pandemic did cable news analysts give their opinions on a webcam from a makeshift home office?
The Covid-19 restrictions are long gone, and the state of emergency is over. But workers are still logging on from home, and many companies have decided that a remote or partially remote workforce is just part of who we are now.
ClearOne provides professional-level audio and video products and cloud-based collaboration services for professional home offices and commercial spaces.
While the decline in the demand for video products, combined with supply chain issues, contributed to a drop in revenue this year, I’m heartened by the fact that ClearOne is in solid financial shape. It has only $1.7 million in debt and cash or cash equivalents of $59 million.
The stock is down to less than $1 now, but I think there’s solid potential here. CLRO stock has a “B” rating in the Portfolio Grader.
Jupiter Wellness (JUPW)
Jupiter Wellness (NASDAQ:JUPW) is a Florida-based company that develops over-the-counter treatments for hair loss, psoriasis, vitiligo and women’s health products.
The company used to be in the cannabidiol business but shifted gears in 2022 when it bought Applied Biology, a biotech company specializing in hair and skin products.
Jupiter also bought SRM Entertainment in 2020 in exchange for 200,000 shares of Jupiter stock. SRM has relationships with the amusement park industry and manufactures products to sell in parks around the country. Jupiter is in the process of spinning off SRM into its own company.
The company also has growth opportunities in its hair loss products. Jupiter licensed its minoxidil booster to treat hair loss to Taisho Pharmaceutical for the Japanese market and Cosmofix Technology Sanpellegrino Cosmetics for the Indian market.
Earnings for the first quarter included revenue of $1.12 million, up 55% from a year ago. Earnings came in at a loss of 5 cents per share, a 61% improvement from last year.
JUPW still trades at less than $1 per share, so it’s definitely a cheap stock. But it’s up 120% in the last month and gets a “B” rating in the Portfolio Grader.
United Maritime (USEA)
United Maritime (NASDAQ:USEA) is an international shipping company that had its initial public offering just a year ago. The company, headquartered in Greece, owns one tanker vessel and seven dry bulk vessels.
But it plans to sell its tanker for $37.5 million and buy an eighth dry bulk vessel for $17.8 million. With the sale, United Maritime will have a cargo capacity of 922,054 dead weight tonnage (DWT).
Transaction proceeds are expected to be realized in the third quarter, giving United Maritime an additional profit. USEA is also being aggressive in its dividend payments, already distributing $1.25 per share in cash payouts since November. That’s roughly 48% of United Maritime’s stock price.
Shipping companies can be pretty profitable, and I’ve recommended several in the past. United Maritime is an opportunity to get in on the ground floor of one that appears to be eager to reward shareholders. USEA stock has an “A” rating in the Portfolio Grader.
Superior Drilling Products (SDPI)
Superior Drilling Products (NYSEAMERICAN:SDPI) doesn’t trade on the major indices, but don’t let that scare you off. The Utah company is in the drilling tool technology business to support the oil and natural gas drilling industry.
High energy prices helped energy companies reap record profits in 2022, and while prices dipped this year, they are still high, and the demand for oil and natural gas continues.
Superior Drilling has its own drill tool fabrication facilities, where it can make custom products for its customers and produce its own patented materials.
The company is reporting second-quarter results on Aug. 14. For the first quarter, revenue of $6.28 million was a gain of 52% from a year ago and beat analysts’ expectations for $5.45 million. Earnings came in at 5 cents per share, or $1.51 million.
SDPI stock has an “A” rating in the Portfolio Grader.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
