These stocks under $10 won’t break the bank.
The stock market has struggled in 2022, providing buying opportunities in high-quality stocks. Unfortunately, quality stocks trading for less than $10 per share are few and far between. A stock priced at this level could be a red flag that something is seriously wrong with a company. Many of these stocks have challenged underlying business models or difficult near-term outlooks. That’s not always the case, however, and CFRA Research has identified some cheap, high-quality stocks that could be excellent buys for frugal investors. Here are nine of the best stocks to buy for less than $10 per share, according to CFRA.
Arlo Technologies Inc. (ticker: ARLO)
Arlo Technologies produces smart connected devices, including security cameras, baby monitors and outdoor lights. Analyst Keven Young says Arlo’s shift to a more services-focused business has created value for investors. He says the transition has gone smoothly up to this point. In fact, Arlo reached $125 million in annual recurring revenue in the third quarter, up 56% from the third quarter of 2021. Perhaps even more impressive, Arlo reported 1.67 million paid accounts, up 91% year over year. The company’s growth is particularly encouraging, given its current customer acquisition cost of $0. CFRA has a “buy” rating and $7 price target for ARLO stock, which closed at $3.15 on Dec. 19.
Crescent Point Energy Corp. (CPG)
Crescent Point Energy is a Canadian oil and gas exploration and production company that has assets in Western Canada, Utah and North Dakota. This is the best-performing stock on this list in 2022, with a year-to-date gain of 22.7% through Dec. 19. Analyst Jonnathan Handshoe says Crescent Point is one of many energy companies taking advantage of sky-high oil and natural gas prices by reducing its debt and improving its balance sheet. CFRA has a “buy” rating and 13 Canadian dollar ($9.55) price target for CPG stock, which closed at $6.55 on Dec. 19.
Nokia Oyj (NOK)
Nokia Oyj is a global telecom equipment and digital map data vendor that also licenses intellectual property to third parties. Analyst Keith Snyder says Nokia will continue to benefit from a global 5G infrastructure investment cycle that is both longer and larger than previous cycles. Snyder says Nokia will outgrow its industry in 2022 and potentially regain some North American market share it had lost in 2021. Inflation and supply chain disruptions remain headwinds, but Snyder projects solid 4.1% year-over-year revenue growth for Nokia in 2023. CFRA has a “buy” rating and $6.50 price target for NOK stock, which closed at $4.60 on Dec. 19.
Orange SA (ORAN)
Orange is the leading telecom provider in France. Analyst Adrian Ng says Orange is dealing with a challenging regulatory and macroeconomic environment in Europe, but risks have already been fully priced into the stock. Ng says Orange’s cost-cutting initiatives will support margins, and the company has an opportunity to monetize tower assets worth roughly $10.6 billion. Ng says Africa and the Middle East will continue to be Orange’s main growth contributors. CFRA has a “buy” rating and $12 price target for ORAN stock, which closed at $9.76 on Dec. 19. Shares also pay an attractive 7.5% dividend, a rarity among low-priced stocks.
Oatly Group AB (OTLY)
Oatly is the world’s largest oat milk producer and may be an attractive option for investors looking to buy a cheap stock on the dip. Oatly shares are down 83.2% this year through Dec. 19, the worst performance of any stock on this list. At less than $1.50 per share, analyst Arun Sundaram says Oatly shares are attractively valued, given the company’s positioning in the high-growth oat milk market. Sundaram projects revenue growth will rebound from 10% in 2022 to 50% in 2023 as temporary capacity constraints and macroeconomic headwinds subside. CFRA has a “buy” rating and $3.50 price target for OTLY stock, which closed at $1.34 on Dec. 19.
Rocket Lab USA Inc. (RKLB)
Rocket Lab is an aerospace and defense company that specializes in launch services, spacecraft engineering and design, components manufacturing, and other spacecraft management solutions. Analyst Keith Snyder says Rocket is one of the top launch providers for small payloads. Snyder says Rocket has a more reliable launch history than smaller competitors, and it allows customers more mission customization than SpaceX and other larger competitors. In addition, he says the Electron rocket’s reusability could significantly reduce future launch costs. Snyder projects 37.7% revenue growth for Rocket Lab in 2023. CFRA has a “buy” rating and $10 price target for RKLB stock, which closed at $3.90 on Dec. 19.
Telefonica SA (TEF)
Telefonica is the leading telecom company in Spain. In the third quarter, Telefonica reported 3.8% organic revenue growth, 2.8% service sales growth and 12.2% handset revenue growth. The company’s core Spain market revenue dropped 2.8% in the quarter, but Germany revenue grew 4.2% and Brazil revenue was up 12.3%. Ng says Telefonica’s strategic decisions to exit the Central American market and acquire E-Plus in Germany and Global Village Telecom in Brazil have helped improve its positioning in key markets and reduce its debt. CFRA has a “buy” rating and $4.50 price target for TEF stock, which closed at $3.41 on Dec. 19.
Telecom Italia SPA (TIIAY)
Telecom Italia is the leading fixed-line and wireless telecom provider in Italy. The company plans to split off its network business into a separate company. Ng says Telecom Italia effectively rejected a buyout offer by KKR & Co. (KKR) by denying the firm access to its books, but CVC Capital Partners and other private equity firms have also shown interest in acquiring the company. Ng says Telecom Italia’s core market revenue will likely continue to decline amid competition, but Brazil has been an attractive growth source. CFRA has a “buy” rating and $3.50 price target for TIIAY stock, which closed at $2.22 on Dec. 19.
Tencent Music Entertainment Group (TME)
Tencent Music is a leading online music platform in China and is the parent company of QQ Music, Kugou Music and WeSing. Tencent Music shares have started to recover after downward pressure from Chinese and U.S. regulators’ increased restrictions on U.S.-listed Chinese tech stocks. Analyst Ahmad Halim says online music services revenue may recover in 2023, boosting Tencent Music’s margins. Halim says Tencent will continue to face competitive pressures, but the company’s high-margin advertising growth is bullish in the long term. CFRA has a “buy” rating and $6.50 price target for TME stock, which closed at $8.17 on Dec. 19.
9 of the best cheap stocks to buy under $10:
— Arlo Technologies Inc. (ARLO)
— Crescent Point Energy Corp. (CPG)
— Nokia Oyj (NOK)
— Orange SA (ORAN)
— Oatly Group AB (OTLY)
— Rocket Lab USA Inc. (RKLB)
— Telefonica SA (TEF)
— Telecom Italia SPA (TIIAY)
— Tencent Music Entertainment Group (TME)
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Update 12/20/22: This story was previously published at an earlier date and has been updated with new information.