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How to Find the Best Cheap Stocks Under $10 to Buy in July
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Wall Street has been rather quiet to start the second week of July as the big money waits for June inflation data and the start of corporate earnings season. Despite the unknowns around the corner, the bulls remain in control.
Both the S&P 500 and the Nasdaq continue to trade above their 50-day and 200-day moving averages. And the shorter-term 21-day moving average has proved to be a bullish line in the sand for both the benchmark and the tech-heavy index that Wall Street is holding to start the second half.
Inflation data is due out Wednesday morning, with Core CPI projected to come in at 5% vs 5.3% in May. Meanwhile, the headline CPI figure is expected to slip to 3.1% YoY vs. 4% in May. These estimates mark the continuation of cooling inflation, which peaked at 9.1% in June 2022.
Image Source: Zacks Investment Research
The big banks such as JPMorgan unofficially kick off the second quarter earnings season on Friday, though PepsiCo and others report on Thursday. The most recent Zacks data shows an earnings picture that’s holding steady and slowly improving for some sectors. And earnings are set to bottom in the soon-to-be-reported second quarter.
On top of that, other areas of the market outside of big tech are finally taking part in the rally, with all 11 S&P 500 sectors up in June. That means investors might want to hunt for stocks outside of the mega-cap tech winners for July and beyond.
Today we dive into a pocket of the stock market that many investors like to own as part of diversified portfolios: cheap stocks trading for $10 a share or less.
Along with the cheap price tag, the stocks we explore today boast high Zacks Ranks given their improving earnings outlooks.
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 nearly 60 highly-ranked names trading under $10 a share that made it through the screen today…
Marqeta is a financial tech or fintech company that helps provide developers with advanced infrastructure and tools to build “highly configurable payment cards.” The Marqeta platform and its open APIs are designed for businesses “who want to easily build tailored payment solutions to create best-in-class experiences and power new modes of money movement.” Marqeta aims to help customers across many different areas create advanced and cutting-edge payment solutions.
Marqeta posted 45% revenue growth last year and it’s projected to grow its top line by another 22% in FY23 and 17% higher in FY24 to reach $1.1 billion. Zacks estimates call for Marqeta to report an adjusted loss of -$0.35 a share this year and then cut that down to -$0.27 a share in FY24. Plus, its improving FY24 earnings outlook helps it land a Zacks Rank #2 (Buy) right now.
Image Source: Zacks Investment Research
Marqeta shares have surged over 30% since early May and MQ trades around 20% below its average Zacks price target at the moment at around $5.10 per share. It is worth noting that MQ traded as high as $30 a share in the fall of 2021, following its June 2021 IPO. Marqeta is now back above its 50-day moving average and it recently found support at its 21-day moving average.
Marqeta is set to release its Q2 2023 results on August 8.
Hims & Hers is a digital-native health and wellness brand and platform. Hims & Hers and its array of offerings aim to help with hair loss for both men and women, as well as skincare and much more. Hims & Hers sells treatments for sexual health issues such as erectile dysfunction. The company has also expanded its offerings to tackle more “everyday health” concerns, with offerings for allergies, cold & flu, and much more.
Hims & Hers aims to “normalize health & wellness challenges—and innovates on their solutions—to make feeling happy and healthy easy to achieve.” The firm also boasts that it offers personalized care.
HIMS posted 94% revenue growth in 2022. Zacks estimates call for it to post another 57% sales expansion this year to climb from $527 million to $828 million in FY23 and then hit $1 billion in FY23.
Image Source: Zacks Investment Research
Hims & Hers is projected to cut its adjusted loss from -$0.32 a share to -$0.21 a share in 2023 and then shrink that to -$0.10 next year. The company’s adjusted earnings outlook helps it land a Zacks Rank #2 (Buy) right now.
HIMS stock has climbed 61% over the last 12 months and 35% YTD. HIMS stock has slipped recently and it is trading below neutral RSI levels, which could provide it plenty of runway since it trades 53% below its average Zacks price target. And Hims & Hers trades at 1.9X forward 12-month sales, which marks a 50% discount to the S&P 500 and 20% value compared to the Zacks Medical sector.
Investors should note that HIMS comes with a bit more built-in risk and volatility since it is rather heavily shorted at the moment—around 15% of the float.
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.
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.
Image: Bigstock
How to Find the Best Cheap Stocks Under $10 to Buy in July
Wall Street has been rather quiet to start the second week of July as the big money waits for June inflation data and the start of corporate earnings season. Despite the unknowns around the corner, the bulls remain in control.
Both the S&P 500 and the Nasdaq continue to trade above their 50-day and 200-day moving averages. And the shorter-term 21-day moving average has proved to be a bullish line in the sand for both the benchmark and the tech-heavy index that Wall Street is holding to start the second half.
Inflation data is due out Wednesday morning, with Core CPI projected to come in at 5% vs 5.3% in May. Meanwhile, the headline CPI figure is expected to slip to 3.1% YoY vs. 4% in May. These estimates mark the continuation of cooling inflation, which peaked at 9.1% in June 2022.
Image Source: Zacks Investment Research
The big banks such as JPMorgan unofficially kick off the second quarter earnings season on Friday, though PepsiCo and others report on Thursday. The most recent Zacks data shows an earnings picture that’s holding steady and slowly improving for some sectors. And earnings are set to bottom in the soon-to-be-reported second quarter.
On top of that, other areas of the market outside of big tech are finally taking part in the rally, with all 11 S&P 500 sectors up in June. That means investors might want to hunt for stocks outside of the mega-cap tech winners for July and beyond.
Today we dive into a pocket of the stock market that many investors like to own as part of diversified portfolios: cheap stocks trading for $10 a share or less.
Along with the cheap price tag, the stocks we explore today boast high Zacks Ranks given their improving earnings outlooks.
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 nearly 60 highly-ranked names trading under $10 a share that made it through the screen today…
Marqeta ((MQ - Free Report) )
Marqeta is a financial tech or fintech company that helps provide developers with advanced infrastructure and tools to build “highly configurable payment cards.” The Marqeta platform and its open APIs are designed for businesses “who want to easily build tailored payment solutions to create best-in-class experiences and power new modes of money movement.” Marqeta aims to help customers across many different areas create advanced and cutting-edge payment solutions.
Marqeta posted 45% revenue growth last year and it’s projected to grow its top line by another 22% in FY23 and 17% higher in FY24 to reach $1.1 billion. Zacks estimates call for Marqeta to report an adjusted loss of -$0.35 a share this year and then cut that down to -$0.27 a share in FY24. Plus, its improving FY24 earnings outlook helps it land a Zacks Rank #2 (Buy) right now.
Image Source: Zacks Investment Research
Marqeta shares have surged over 30% since early May and MQ trades around 20% below its average Zacks price target at the moment at around $5.10 per share. It is worth noting that MQ traded as high as $30 a share in the fall of 2021, following its June 2021 IPO. Marqeta is now back above its 50-day moving average and it recently found support at its 21-day moving average.
Marqeta is set to release its Q2 2023 results on August 8.
Hims & Hers Health ((HIMS - Free Report) )
Hims & Hers is a digital-native health and wellness brand and platform. Hims & Hers and its array of offerings aim to help with hair loss for both men and women, as well as skincare and much more. Hims & Hers sells treatments for sexual health issues such as erectile dysfunction. The company has also expanded its offerings to tackle more “everyday health” concerns, with offerings for allergies, cold & flu, and much more.
Hims & Hers aims to “normalize health & wellness challenges—and innovates on their solutions—to make feeling happy and healthy easy to achieve.” The firm also boasts that it offers personalized care.
HIMS posted 94% revenue growth in 2022. Zacks estimates call for it to post another 57% sales expansion this year to climb from $527 million to $828 million in FY23 and then hit $1 billion in FY23.
Image Source: Zacks Investment Research
Hims & Hers is projected to cut its adjusted loss from -$0.32 a share to -$0.21 a share in 2023 and then shrink that to -$0.10 next year. The company’s adjusted earnings outlook helps it land a Zacks Rank #2 (Buy) right now.
HIMS stock has climbed 61% over the last 12 months and 35% YTD. HIMS stock has slipped recently and it is trading below neutral RSI levels, which could provide it plenty of runway since it trades 53% below its average Zacks price target. And Hims & Hers trades at 1.9X forward 12-month sales, which marks a 50% discount to the S&P 500 and 20% value compared to the Zacks Medical sector.
Investors should note that HIMS comes with a bit more built-in risk and volatility since it is rather heavily shorted at the moment—around 15% of the float.
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.
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/.