These stocks under $10 won’t break the bank.
Stocks trading for less than $10 per share can be attractive for investors looking to scoop up some cheap equity. Unfortunately, quality stocks trading for less than $10 are few and far between. Stocks priced at this level can be a red flag for investors that something serious is wrong with a company. Many of these stocks have challenged business models or difficult near-term outlooks, but opportunities still exist. The CFRA Research analyst team has identified these cheap, high-quality stocks that could be excellent buying opportunities in 2023 for frugal investors. Here are nine of the best stocks to buy under $10, according to CFRA.
Nokia Corp. (ticker: NOK)
Nokia is a global telecommunications equipment and digital map data vendor that also licenses intellectual property to third parties. Analyst Keith Snyder says the initial 5G investment cycle has generated momentum for Nokia’s sales, especially in North America and China. Snyder says the 5G cycle will be larger and more lengthy than previous upgrade cycles, a bullish catalyst for Nokia. He says 2022 was a difficult year for Nokia in which it lost market share and pricing leverage. But he predicts Nokia’s business fundamentals will stabilize in 2023. CFRA has a “buy” rating and $6.50 price target for NOK stock, which closed at $4.65 on Feb. 23.
Telefonica SA (TEF)
Telefonica is the leading telecommunications company in Spain. Analyst Adrian Ng says Telefonica’s strategic decisions to exit the Central American market and acquire E-Plus in Germany and GVT in Brazil have helped improve its positioning in key markets and reduce its debt. In addition, its deal to combine U.K. telecom assets into a joint venture with Liberty Global PLC (LBTYA) will help Telefonica shore up its balance sheet. Ng says the company has stable revenues and a “strong position” in its core markets. CFRA has a “buy” rating and $4.50 price target for TEF stock, which closed at $4.08 on Feb. 23.
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, Kuwo Music and WeSing. Tencent Music shares are down about 70% in the past two years, as Chinese and U.S. regulators tighten restrictions on U.S.-listed Chinese tech stocks. Analyst Ahmad Halim says Tencent’s online music streaming revenue may recover in 2023, which would boost overall margins. In addition, he says the negative effect of competition from NetEase Inc. (NTES), TikTok and other competitors may fade. TME has long-term potential based on the company’s expected revenue growth, but CFRA doesn’t predict that shares will recover this year. CFRA has a “buy” rating and $6.50 price target for TME stock, which closed at $7.76 on Feb. 23.
Aegon NV (AEG)
Aegon is a Dutch insurance company that offers insurance, savings, pension and investment products and services around the world. Analyst Jeff Lye says Aegon has a long track record of solid execution and should achieve its 2023 financial targets. Lye is bullish on Aegon’s strategy to focus on assets that generate attractive return on capital, which helps stabilize its capital ratio. In addition, Aegon has pledged to return an additional 1.5 billion euros ($1.58 billion) to shareholders after it combines its Dutch operations with ASR Nederland NV in the second half of 2023. CFRA has a “buy” rating and $7 price target for AEG stock, which closed at $5.13 on Feb. 23.
Telecom Italia SpA (TIIAY)
Telecom Italia is the leading fixed-line and wireless telecommunications provider in Italy. The company plans to split off its network business into a separate company. Ng says revenues will continue to decline as Telecom Italia faces intense competition in its main markets. However, Brazil revenues were up 24.4% in the most recent quarter and have helped offset competitive headwinds. Telecom Italia also has potential merger and acquisition catalysts ahead given outside interest in acquiring its network assets by KKR & Co. Inc. (KKR), CVC Capital Partners and others. CFRA has a “buy” rating and $3.50 price target for TIIAY stock, which trades over the counter and closed at $3.22 on Feb. 23.
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. Global energy shortages coupled with commodity price inflation led to record profits in the energy sector in 2022, and Crescent Point is one of just two stocks on this list that have generated a positive return for investors in the past 12 months. Analyst Jonnathan Handshoe says Crescent Point has taken advantage of soaring oil and gas prices by improving its balance sheet. CFRA has a “buy” rating and 13 Canadian dollar ($9.53) price target for CPG stock, which closed at $6.93 on Feb. 23.
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 a top-tier launch provider for customers with small payloads. Snyder says Rocket Lab has a better track record of successful launches than other smaller competitors, and it provides customers with more orbit flexibility than SpaceX and other larger launch providers. He projects 37.7% revenue growth for Rocket Lab in 2023 driven largely by its space systems division. CFRA has a “buy” rating and $10 price target for RKLB, which closed at $4.55 on Feb. 23.
Oatly Group AB (OTLY)
Oatly is the world’s largest oat milk producer. At about $2 per share, analyst Arun Sundaram says Oatly is attractively valued and has been gaining market share from almond milk competitors in the past several years. Sundaram says Oatly is well positioned in the high-growth oat milk market, and its growth headwinds in 2022 were due more to temporary supply disruptions and macroeconomic challenges rather than any company-specific issues. In fact, he projects Oatly’s revenue growth will accelerate from 10% in 2022 to 50% in 2023. CFRA has a “buy” rating and $3.50 price target for OTLY stock, which closed at $2.27 on Feb. 23.
Diebold Nixdorf Inc. (DBD)
Diebold Nixdorf produces ATMs, self-service transaction systems and other banking and retail technology systems. Diebold Nixdorf completed a major debt refinancing transaction in December that will provide the company with $400 million in capital. Diebold Nixdorf shares are up 109.9% in 2023 through Feb. 23, more than double the year-to-date return of any other stock on this list. Analyst Janice Quek says Diebold’s refinancing eliminates near-term risk, and the company’s 2022 struggles stemmed from supply challenges rather than demand issues. CFRA has a “buy” rating and $3.30 price target for DBD stock, which closed at $2.98 on Feb. 23.
9 of the best cheap stocks to buy under $10:
— Nokia Corp. (NOK)
— Telefonica SA (TEF)
— Tencent Music Entertainment Group (TME)
— Aegon NV (AEG)
— Telecom Italia SpA (TIIAY)
— Crescent Point Energy Corp. (CPG)
— Rocket Lab USA Inc. (RKLB)
— Oatly Group AB (OTLY)
— Diebold Nixdorf Inc. (DBD)
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9 of the Best Cheap Stocks to Buy Under $10 originally appeared on usnews.com
Update 02/24/23: This story was previously published at an earlier date and has been updated with new information.
