10 Cheap Stocks To Buy Under $10

| January 16, 2020 | 0 Comments
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These stocks are cheap now, but they are all well-positioned to soar higher

[Editor’s Note: This article is regularly updated to include the most relevant information available.]

For new investors, looking at companies like Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and even fast-casual restaurant Chipotle (NYSE:CMG) can be disconcerting. These well-respected names come with massive price tags. Although these stocks have long histories of solid returns and great growth potential still ahead, they may not be realistic first investments for someone just starting out. However, cheap stocks, like those under $10, offer both learning opportunities and huge upside potential.

There’s also something exciting about investing in cheap stocks. It seems like everyone wants to find the few names that will truly soar, bringing in unbelievable returns in one month or one year. But many of these names are highly volatile, and for good reason. Some even deserve to fall further. These cheap stocks are often cannabis or biotech plays, banking on hot market concepts or a drug still waiting for U.S. Food and Drug Administration approval. While many of these will fall, some will soar.

In evaluating cheap stocks to buy, it is important to look at more than just the price. What is the company? What is its potential to grow and profit in the coming years? How does Wall Street feel? The last time I pulled together a list of stand-out cheap stocks, some proved to be winners. Boingo Wireless (NASDAQ:WIFI) surpassed the $10 mark. But the analyst community has soured on others, pulling their consensus ratings from “strong buy” to “moderate buy.”

That’s why I’m here with an update for InvestorPlace readers. The following 10 stocks all have “strong buy” consensus ratings and price targets that imply greater than 15% upside from their current share prices. They’re cheap stocks with rich paths ahead.

Cheap Stocks to Buy: SmileDirectClub (SDC)

Projected 12-Month Upside: 34%

SmileDirectClub (NASDAQ:SDC) went public in September 2019 at $23 per share. Since its IPO, its price chart hasn’t exactly been pearly white. SDC stock is down 33% since September, but it may be straightening things up (pun intended). The company recently turned things around, rallying almost 40% from lows near $8. And analysts like what they see, offering a 12-month price target of $17.73 per share.

SmileDirectClub also has a compelling narrative to back up the hype. The company offers a unique approach to orthodontics that allows patients to get straight teeth from the comfort of their homes. That’s right, embracing telemedicine — or teledentistry — patients can sign up for online consultations with licensed doctors, receive their aligning trays in the mail and complete teeth-straightening treatment without appointments and all the metal. The cost is also significantly cheaper than traditional orthodontics. National averages for braces run between $6,000-$8,000 but you can get an SDC treatment for just under $2,000.

Still feeling a bit skeptical? History has SDC’s back. Although it operates under a slightly different model (patients still have to make in-person appointments), Align Technologies (NASDAQ:ALGN) has been a stellar success. You might be more familiar with its Invisalign product, which has driven the company’s returns. The company is up 380% in the last five years and almost 2,000% since its January 2001 IPO.

Promising convenience and big potential, SmileDirectClub is an excellent cheap stock to buy.

The Meet Group (MEET)

Projected 12-Month Upside: 15%

Once taboo, dating apps are now a thing of the mainstream. Heck, it’s not uncommon for couples to end up in long-term relationships — and even marriages — after a swipe or two on their favorite platform. That’s where The Meet Group (NASDAQ:MEET) comes in. The company operates what it calls human connection applications under brands such as MeetMe, Lovoo, Skout, Tagged and Growlr.

With a share price just over $5, MEET stock is up almost 50% over the last six months. And analysts agree that the next 12 months are also rich with potential. The stock has a “strong buy” consensus rating and a 12-month price target of $6.19, implying another 15% of upside.

So why are analysts in love with this cheap stock? The answer is two-fold.

When the company reported earnings Nov. 7, things were looking up. Earnings of 13 cents per share beat consensus estimates, and revenue of $52.6 million was up from $45.7 million a year ago. This quarter’s earnings beat wasn’t a one-off, either. It marked the fourth-straight quarter of earnings beats for Meet Group stock.

The second part of this love story is The Meet Group’s cutting-edge dating technology. On Oct. 29, the company announced the release of a brand new livestreaming dating game. Inspired by TV dating shows, the game NextDate matches current users in a group and features a “Love-o-meter” to help with ranking “contestants.” If you see someone you like, you can select to be paired with him or her for a one-on-one livestreaming date.

This game, and online dating in general, play on major themes of technology that will thrive through the rest of 2020 and beyond. This means MEET stock should stay on any list of cheap stocks to buy for the foreseeable future.

Angi Homeservices (ANGI)

Projected 12-Month Upside: 31%

Shares of Angi Homeservices (NASDAQ:ANGI) stock began trading in October 2017, following a merger of Angie’s List and HomeAdvisor. Now, ANGI encompasses those brands as well as Handy, CraftJack and HomeStars.

Although it’s not exactly breaking news that e-commerce — and Amazon — is disrupting everything, it’s still important to note that the trend weighed on the home services market. But now, it looks like Angi’s Homeservices is ready to make a comeback.

A quick trip to the Angie’s List website can match you with air duct cleaning, floor repair or holiday decorating specialists, just to name a few. And this streamlined home services process is exactly what will keep boosting ANGI stock.

To be fair, since 2017, ANGI stock hasn’t had the smoothest run. But when the company reported earnings Nov. 6, shares climbed 21.5%. Reflecting on the third quarter, CEO Brandon Ridenour also said that Angi’s Homeservices was once again on the path to growth.

So what’s behind this resurgence?

It seems like consumers and businesses are embracing the online business model, allowing for future growth. Some estimate that this home-improvement services market is worth as much as $400 billion — and the global market for home services “is expected to grow by a compound annual growth rate of 52% through 2022.”

So, as more people hop to their phones to find a service provider, Angi’s Homeservices and ANGI stock will continue this turnaround. With a share price just over $9 and a 12-month price target of $12.20, the future looks bright.

Vonage (VG)

Projected 12-Month Upside: 49%

Vonage (NYSE:VG) is getting a makeover, and boy, does it need one.

After the company’s 2006 IPO, Vonage customers filed a class-action lawsuit after early investors lost money. By the end of the year, VG stock was down almost 60%.

And 2019 wasn’t much prettier, bringing a 20% share-price decline. But things might finally be looking up. Since the start of the new year, VG shares have been in the green, up 2%. And after a long history of transformations and failures, Vonage shareholders are probably crossing their fingers that this makeover sticks.

From a residential telecommunications provider to a voice over internet protocol (VoIP) services provider, Vonage is a company that had already transformed once. Now, inspired by big names like Salesforce (NYSE:CRM) and Oracle (NYSE:ORCL), the company is switching to the software-as-a-service world.

On Oct. 30, Vonage announced several new products, a new logo and a fresh marketing campaign designed to make one thing very clear: The company plans on being a leader in this new software era.

These days, it looks like Wall Street agrees with CEO Alan Masarek’s plans to reinvent global communications. Plus, the notion of disrupting existing technology is now more than a buzz-worthy notion — it’s something investors are actively looking for in stocks to buy. If Vonage can manage to pull of this transition, it just might reach its $13.11 12-month price target, implying more than 49% upside.

Ovid Therapeutics (OVID)

Projected 12-Month Upside: 257%

It would be almost impossible to talk about promising cheap stocks to buy without mentioning at least one biotech name. That’s because these high-risk, high-reward companies perfectly underline both the pros and cons of this type of investing. Just as a biotech company could bring in 100%-plus returns, it could crash and burn with negative trial results.

But looking at cheap biotech stocks, Ovid Therapeutics (NASDAQ:OVID) looks to be a strong buy for a reason. Highlighting its “Bold Medicine” approach that focuses on transforming the lives of its patients, Ovid seems to take a more moralistic approach to biopharma. The company specializes in developing treatments for rare neurological disorders, and has a robust pipeline with four candidates.

In its third-quarter earnings report, the company had positive updates on OV935, which is in co-development with Takeda Pharmaceutical (NYSE:TAK). According to Ovid’s management, in a current trial, the therapy has been found to reduce seizure frequency in the difficult-to-treat patient population.

While none of the company’s drugs are on the market yet, clinical trial results are worthy of optimism. As long as these trials continue to go well, Ovid Therapeutics should be safely on its way to reach its $13 price target. That 12-month price target implies over 257% upside from its current share price near $4. Plus, since I last wrote about the biotech name, OVID stock has returned 60%.

Noodles & Company (NDLS)

Projected 12-Month Upside: 36%

If you’re reading this, you’re probably hungry for big returns from cheap stocks. And hopefully you’re also hungry for some noodles. Restaurant chain Noodles & Company (NASDAQ:NDLS) might seem like an odd choice for this list, but analysts are positive about its potential. After a rough year — down about 22% in 2019 — can NDLS stock make a comeback?

An often-cited issue with Noodles & Company is that it’s a niche chain in a competitive industry. Companies like Chipotle, Domino’s (NYSE:DPZ), Restaurant Brands International (NYSE:QSR) and Yum! Brands (NYSE:YUM) offer everything a drive-thru or pick-up diner could want. Plus, in an age where plant-based meat and health-conscious alternatives are thriving, a bowl full of noodles might not be the most attractive option. But fortunately for NDLS stock, there’s upside potential (and some veggies) ahead.

Noodles & Company added some health-conscious menu items in 2019 that are set to boost NDLS stock in 2020 and beyond. After success adding zucchini noodles, or “zoodles” as an alternative to traditional pasta in 2018, 2019 brought an even more out-of-the-box option. Cauliflower noodles — yes, nicknamed “caulifloodles” got analysts excited in the fall. That’s because traffic surged with zoodles back in 2018, and many expect similar results from the new veggie option.

B2Gold (BTG)

Projected 12-Month Upside: 27%

With a $4 billion market capitalization, B2Gold (NYSEAMERICAN:BTG) is not the largest in the gold-mining realm, but it’s picking up sparkle. In the last month, several analysts have hopped on board with “buy recommendations” for the Canadian company, citing its potential.

In 2007, after Kinross Gold (NYSE:KGC) acquired Bema Gold, B2Gold’s story started. After the acquisition, a few executives from Bema founded BTG, and began making mine purchase around the world. Now it holds mining properties in Nicaragua, the Philippines, Mali, Colombia, Burkina Faso and Namibia. BTG stock has almost doubled in the past five years, and returned almost 40% gains in 2019. But analysts think it can grow another 30% or so in 2020, with a 12-month price target just north of $5.

That’s not surprising. Gold has been a hot topic in the last week or so, thanks to its reputation as a safe haven investment. After news the U.S. military killed one of Iran’s top military generals in an airstrike, gold rallied. Those tensions haven’t exactly disappeared, either. President Donald Trump appears eager for peace, or at least is currently focusing on economic sanctions, but another hint of violence could help gold. As a result, BTG stock and its peers should climb higher.

Glu Mobile (GLUU)

Projected 12-Month Upside: 19%

Got games on your phone? If so, you might be like the other 2.4 billion-plus consumers that are estimated to have games on their phone this year. And those gamers are responsible for the $68.5 billion mobile gaming market. For Glu Mobile (NASDAQ:GLUU), these statistics might be just the lifeboat the company needs to turn its narrative around.

It’s safe to say the video game industry is undergoing massive changes. On the more traditional side, consoles are becoming obsolete and streaming subscriptions for games are on the rise. These broader shifts are providing a nice tailwind for mobile gaming companies like Glu Mobile. As gamers care more about accessibility, free-to-play games that they can easily access on any smartphone are garnering attention.

And this attention isn’t just coming from those playing games. Tencent (OTCMKTS:TCEHY) invested $126 million in Glu Mobile, representing an almost 15% stake. Companies like Tencent, as well as financial institutions, are waking up to the potential stored within fun, accessible mobile games.

It’s important to note that GLUU stock is coming off a rough year, down almost 30% over the last 12 months. However, it’s packing its pipeline with both original and third-party branded games. Licenses for Kim Kardashian: HollywoodMLB Tap Sports Baseball and Restaurant Dash with Gordon Ramsay use big names to draw in attention. Analysts are looking at partnerships like those with the MLB and World Wrestling Entertainment (NYSE:WWE) to boost Glu Mobile stock in 2020 and beyond.

So, next time you’re scrolling through your phone to play your favorite mobile game, consider adding GLUU stock to your portfolio. With a 12-month price target of $7.38, there’s certainly some winning ahead.

Turtle Beach (HEAR)

Projected 12-Month Upside: 107%

You might find it a little odd that I’m recommending Turtle Beach (NASDAQ:HEAR) after my review of Glu Mobile. Yes, it’s true that gamers are increasingly shifting to mobile and subscription games. But 2020 has a big catalyst for the maker of gaming headsets.

The California-based tech company makes headsets for PC, mobile devices, the Xbox One, PlayStation 4 and Nintendo Switch. And in case you haven’t heard, this will be a big year for gaming consoles. Microsoft (NASDAQ:MSFT) is set to release its next-generation console, Xbox Series X. Sony (NYSE:SNE) will also roll out the PlayStation 5. Both new consoles will be out in time for holiday shopping, which should not only help those two companies, but all associated retailers.

Some analysts already think that 2020 will be a good year for beleaguered game retailer GameStop (NYSE:GME), thanks to the excitement the new consoles will bring. With that in mind, there’s no reason that 2020 shouldn’t also be a good year for Turtle Beach. As gaming attention turns back to hardware and accessories, headsets that support the new consoles should find sales success.

To be clear, Turtle Beach might not be a cheap stock to buy forever. But for 2020, spurred on by big news in gaming, I’d keep a close watch on HEAR stock.

Playa Hotels & Resorts (PLYA)

Projected 12-Month Upside: 43%

There might not be anything quite as relaxing as sunbathing on the beach with a fruity drink in your hand. Playa Hotels & Resorts (NASDAQ:PLYA) seems to know just that. The vacation property company has branded resorts throughout Mexico, Jamaica and the Dominican Republic. And boy, are those properties stunning.

Analysts agree with my simple assessment, but for more reasons than the breathtaking hotels. Macquarie analyst Chad Beynon recently gave PLYA stock an “outperform” rating and $10 price target, implying 30% upside from its current share price. He cites a survey he administered, which found Playa Hotels & Resorts offered “beachfront property at massive discount.” He also said the company was one of the best plays on tourism in Mexico.

But Mexico’s tourism climate suffered in 2020 for a variety of reasons. Would-be travelers were turned off by the gruesome killing of a Mormon family and reports of increased cartel activity. Potentially more damaging is the fact that the Mexican government defunded its tourism board in order to build a new railway. The board ran both domestic and international offices to promote vacationers head to Mexico. Less promotion and more violence aren’t a good combo at the start of 2020, but there is still upside.

Beynon isn’t alone in his appreciation for the beachfront experience, which certainly helps. There will always be travelers thirsting for the all-inclusive resort experience. Additionally, resort groups in Mexico, including one that represents the Yucatan (home to many of PLYA’s properties), are taking matters into their own hands. These resorts are forming their own travel offices in cities like Los Angeles to ensure a steady stream of travelers.

Like Turtle Beach, this might not be a forever investment. But as you’re booking your 2020 travel, consider adding some shares of PLYA stock to your portfolio. It’s a cheap stock that just might pay off.

Sarah Smith is a web editor for InvestorPlace.com. As of this writing, she did not hold any of the aforementioned securities.

 

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