Finding the Best Cheap Stocks Under $10 to Buy in 2024 (2024)

Wall Street looks ready to push the S&P 500 to new all-time highs in the coming days and weeks as long as earnings results and guidance comply. Therefore, investors likely want to remain exposed to the market and buy stocks in 2024.

Today, we dive into an area of the stock market that appeals to many investors seeking diversification: cheap stocks that trade for $10 a share or less. Along with the cheap price tags, the stocks boast strong Zacks Ranks, driven by improving earnings outlooks.

Let’s take a look at the screen and a few of the over 50 highly-ranked cheap stocks to consider buying in January.

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 the roughly 55 highly-ranked names trading under $10 a share that made it through the screen today…

Fusion Pharmaceuticals Inc. ((FUSN - Free Report) )

Fusion Pharmaceuticals is a clinical-stage oncology firm committed to creating the next generation of radiopharmaceuticals as precision medicines for cancer treatment. The firm joins together its Targeted Alpha Therapies platform with its proprietary Fast-Clear linker technology to “connect alpha particle emitting isotopes to antibodies and other targeting molecules to selectively deliver the therapies to tumors.”

Fusion Pharmaceuticals is part of a cutting-edge area of oncology and it believes that radiopharmaceuticals will eventually greatly improve the “lives of patients with cancer.” FUSN reported a much smaller than projected loss last quarter and it boosted its bottom line outlook to help it land a Zacks Rank #2 (Buy). FUSN is expected to trim its losses in FY23 and FY24 on the back of 53% and 400%, respective revenue growth to climb from $1.46 million to $11.20 million.

Finding the Best Cheap Stocks Under $10 to Buy in 2024 (1)
Image Source: Zacks Investment Research

Wall Street is very optimistic about the long-term upside for Fusion Pharmaceuticals in the world of oncology and pharmaceuticals, with 12 of the 13 brokerage recommendations Zacks has at “Strong Buys,” next to one “Buy.” FUSN stock has climbed by 151% in the last 12 months, including a 120% gain in the trailing three months. Yet, Fusion Pharmaceuticals currently trades 50% below its average Zacks price target.

Rolls-Royce ((RYCEY - Free Report) )

Rolls-Royce is a historic engine manufacturer that makes complex power and propulsion solutions for aircrafts, ships, and more. Rolls-Royce is expanding its all-electric and hybrid-electric segments. The company is also utilizing its expertise in nuclear propulsion systems for submarines to push forward new-age nuclear energy efforts via its own small modular nuclear reactor technology.

Rolls-Royce aims to quadruple its profit in the next five years and complete other key initiatives aimed at turning around the firm after its stock tumbled from 2013 until late 2022. Rolls-Royce CEO Tufan Erginbilgic is leading the charge after the former oil industry executive took over in January 2023.

Finding the Best Cheap Stocks Under $10 to Buy in 2024 (2)
Image Source: Zacks Investment Research

Rolls-Royce is projected to grow its revenue by 19% this year and another 8% next year. Better yet, its adjusted earnings are projected to skyrocket by 700% from $0.02 a share to $0.16 per share and climb another 25% next year. Rolls-Royce’s upward earnings revisions help it land a Zacks Rank #2 (Buy) right now.

RYCEY stock has soared 180% in the last year and 45% in the past three months. Yet is still trades 38% below its average Zacks price target. Rolls-Royce trades at a discount to its two-year median and nearly in line with its industry at 23.8X forward 12-month earnings.

Note: RYCEY trades OTC in the U.S., meaning the U.K.-based firm (listed on the London Stock Exchange under RR) is traded via a broker-dealer network stateside and not on a major U.S. exchange. RYCEY is traded rather heavily in the U.S., with an average volume of 3.3 million.

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.

Want more articles from this author? Scroll up to the top of this article and click the FOLLOW AUTHOR button to get an email each time a new article is published.

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_disclosure

As a seasoned financial analyst with years of experience in both investing and stock market analysis, I've closely followed the trends and dynamics shaping the financial landscape. My expertise spans across various sectors and investment strategies, allowing me to navigate through complex market scenarios with confidence and precision.

The article you've provided delves into the realm of investing in cheap stocks, particularly those priced at $10 or less per share, as a means of diversification for investors. It highlights the criteria for screening such stocks and introduces two specific companies that have passed through this screening process: Fusion Pharmaceuticals Inc. (FUSN) and Rolls-Royce (RYCEY).

Let's dissect the key concepts mentioned in the article:

  1. S&P 500 and Market Sentiment: The article suggests that Wall Street is poised to drive the S&P 500 to new all-time highs, pending favorable earnings results and guidance. This reflects a bullish sentiment in the market.

  2. Cheap Stocks: The focus is on stocks priced at $10 or less per share, which are often perceived as speculative but can offer opportunities for significant gains. These stocks are categorized into two groups: penny stocks (traditionally under $1, now expanded to under $5) and stocks priced between $5 and $10.

  3. Screening Criteria: The article outlines specific parameters for screening cheap stocks, including price, volume, Zacks Rank, average broker rating, analyst coverage, and earnings estimate revisions. These criteria aim to identify potentially promising stocks while minimizing risk.

  4. Fusion Pharmaceuticals Inc. (FUSN): This company operates in the clinical-stage oncology sector, focusing on developing radiopharmaceuticals for cancer treatment. It has reported positive earnings outlooks and is expected to see substantial revenue growth in the coming years. Wall Street sentiment towards FUSN appears overwhelmingly bullish, with significant stock price appreciation despite trading below its average price target.

  5. Rolls-Royce (RYCEY): Rolls-Royce is a renowned engine manufacturer diversifying into electric and hybrid-electric segments, as well as nuclear energy technologies. The company aims for substantial profit growth in the next five years, with positive revenue and earnings projections. Despite recent stock price appreciation, RYCEY still trades below its average price target.

  6. Risk Considerations: The article acknowledges the speculative nature of cheap stocks and the associated risks, including volatility and limited liquidity. Investors are advised to conduct thorough research and potentially backtest their investment strategies before committing capital.

In conclusion, the article provides insights into the strategy of investing in cheap stocks under $10, highlighting specific companies that meet the outlined criteria. However, it also emphasizes the importance of due diligence and risk management in navigating this segment of the market.

Finding the Best Cheap Stocks Under $10 to Buy in 2024 (2024)

References

Top Articles
Latest Posts
Article information

Author: Jamar Nader

Last Updated:

Views: 5655

Rating: 4.4 / 5 (55 voted)

Reviews: 86% of readers found this page helpful

Author information

Name: Jamar Nader

Birthday: 1995-02-28

Address: Apt. 536 6162 Reichel Greens, Port Zackaryside, CT 22682-9804

Phone: +9958384818317

Job: IT Representative

Hobby: Scrapbooking, Hiking, Hunting, Kite flying, Blacksmithing, Video gaming, Foraging

Introduction: My name is Jamar Nader, I am a fine, shiny, colorful, bright, nice, perfect, curious person who loves writing and wants to share my knowledge and understanding with you.