Stocks trading for less than $10 can be attractive for investors looking to scoop up some cheap shares. 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 underlying business models or difficult near-term outlooks. However, the CFRA analyst team has identified nine cheap, high-quality stocks that could be excellent buying opportunities in 2023 for frugal investors.
[Sign up for stock news with our Invested newsletter.]
Here are nine of the best cheap stocks to buy under $10, according to CFRA:
— Nokia Corp. (ticker: NOK)
— Telefonica SA (TEF)
— Tencent Music Entertainment Group (TME)
— Aegon NV (AEG)
— Telecom Italia SPA (TIIAY)
— Crescent Point Energy Corp. (CPG)
— iQiyi Inc. (IQ)
— Rocket Lab USA Inc. (RKLB)
— Oatly Group AB (OTLY)
Nokia Corp. (NOK)
Nokia is a telecom
equipment and digital map data vendor that also licenses intellectual property to third parties. Analyst Keith Snyder says aggressive 5G upgrade investments in North America and China are helping Nokia build momentum, and he anticipates the 5G cycle will be longer and larger than previous network upgrade cycles. Nokia suffered market share losses in its North American mobile networks business in 2022, but Snyder says the company is positioned to regain share and deliver above-average revenue growth among industry peers this year. CFRA has a “buy” rating and $6.50 price target for NOK stock, which closed at $4.20 on April 24.
Telefonica SA (TEF)
Telefonica is the leading telecommunications company in Spain. The stock pays a 7.2% dividend, highest on this list and a rarity among stocks priced under $10. Analyst Adrian Ng says Telefonica’s strategic decisions to acquire E-Plus in Germany, exit the Central America market and buy GTV in Brazil have helped the company reinforce its position and improve its balance sheet. Telefonica is also combining its U.K. telecom assets in a joint partnership with Liberty Global PLC (LBTYA), a deal that will generate $3.1 billion in cash for Telefonica. CFRA has a “buy” rating and $4.50 price target for TEF stock, which closed at $4.40 on April 24.
Tencent Music Entertainment Group (TME)
Tencent Music Entertainment is a leading online music platform in China and is the parent company of QQ Music, KuGou Music and WeSing. Crackdowns by Chinese and U.S. regulators have tightened restrictions on U.S.-listed Chinese tech stocks in recent years, weighing on Tencent Music’s performance. However, analyst Ahmad Halim says online music streaming revenue should recover in 2023, boosting margins. In addition, Halim says the negative impact of competition from TikTok and other entertainment platforms will fade in coming quarters. CFRA has a “buy” rating and $8 price target for TME stock, which closed at $7.36 on April 24.
Aegon NV (AEG)
Aegon is a Dutch insurance company that offers insurance, savings, pension and investment products and services around the world. The financial sector was rocked by a banking crisis in March, and Aegon shares are down 10.9% year to date through April 24. However, analyst Jeff Lye says Aegon has a proven, long-term track record of impressive execution, and the company has set realistic 2023 goals for deleveraging and free cash flow. Lye says Aegon’s focus on strategic assets and commitment to shareholder returns make the stock an excellent investment. CFRA has a “buy” rating and $7 price target for AEG stock, which closed at $4.49 on April 24.
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. The telecommunications sector isn’t known for its big growth numbers, but Telecom Italia’s 28.5% gain in 2023 through April 24 is nothing to scoff at. Ng says merger and acquisition opportunities, including a potential sale of its network business, could be bullish catalysts for the stock. Ng says Brazil has been a particularly attractive growth source. CFRA has a “buy” rating and $3.50 price target for TIIAY stock, which closed at $2.95 on April 24.
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 energy sector profits in 2022. Analyst Jonnathan Handshoe says Crescent Point took advantage of these high energy prices and used its excess cash flow to improve its balance sheet and acquire assets in the Western Canadian Sedimentary Basin. Handshoe projects Crescent Point’s excess cash flow will grow to nearly $1 billion in 2023. CFRA has a “buy” rating and $8.17 price target for CPG stock, which closed at $7.56 on April 24.
iQiyi Inc. (IQ)
iQiyi is a leading Chinese streaming video platform that is often compared to U.S. streaming platform Netflix Inc. (NFLX). Analyst Nazira Abdullah says iQiyi has an innovative customer monetization model, including tiered membership services that appeal to a wide range of customer types. In addition, Abdullah says iQiyi has a valuable library of premium, on-demand content and is positioned to turn profitable in 2023. Abdullah projects 5% revenue growth this year and says lifting of COVID-19 lockdowns in China will help boost advertising sales. CFRA has a “buy” rating and $8.50 price target for IQ stock, which closed at $6.18 on April 24.
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 Lab has become one of the top launch providers for customers with small payloads. Snyder says Rocket Lab provides more mission customization than SpaceX and other larger competitors, but has a better track record of successful launches than other smaller competitors. In addition, he says the potential for the Electron rocket to be reusable could help reduce costs. CFRA has a “buy” rating and $8 price target for RKLB stock, which closed at $3.92 on April 24.
Oatly Group AB (OTLY)
Oatly is the world’s largest oat milk producer. At under $2.50 per share, analyst Arun Sundaram says Oatly is attractively valued and well positioned within the high-growth oat milk market. Sundaram says oat milk is gaining market share from both dairy milk and other plant-based milk in recent years, and he projects revenue growth will accelerate from 12% in 2022 to 30% in 2023. New product launches, improved production capacity, distribution optimization and the removal of COVID-19 restrictions in China will all be growth catalysts this year. CFRA has a “buy” rating and $4 price target for OTLY stock, which closed at $2.28 on April 24.
More from U.S. News
Artificial Intelligence Stocks: The 10 Best AI Companies
10 of the Best Stocks to Buy for 2023
7 of the Best High-Dividend ETFs
9 of the Best Cheap Stocks to Buy Under $10 originally appeared on usnews.com
Update 04/25/23: This story was published at an earlier date and has been updated with new information.
