Stocks trading under $10 can be attractive for investors looking to scoop up some cheap shares. Unfortunately, quality stocks trading at this share price are few and far between, and they 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 Research analyst team has identified eight cheap, high-quality stocks that could be excellent buying opportunities in 2023 for frugal investors.
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Here are eight of the best stocks to buy under $10, according to CFRA:
| Stock | Implied upside over May 22 closing price |
| Telefonica SA (ticker: TEF) | 6.4% |
| Nokia Corp. (NOK) | 59.3% |
| Snap Inc. (SNAP) | 23% |
| Tencent Music Entertainment Group (TME) | 4.7% |
| Aegon NV (AEG) | 50.2% |
| Telecom Italia SPA (TIIAY) | 20.3% |
| iQiyi Inc. (IQ) | 72.8% |
| Crescent Point Energy Corp. (CPG) | 15.7% |
Telefonica SA (TEF)
Telefonica is the leading telecommunications company in Spain. The stock pays a 7.7% dividend — the highest on this list and a rarity among stocks priced under $10. Analyst Adrian Ng says Telefonica’s decisions to buy E-Plus in Germany and GVT in Brazil, exit the Central American market and combine its U.K. telecom assets with Liberty Global PLC (LBTYA) in a joint venture deal will help Telefonica improve its balance sheet and reinforce its position in core markets. Ng says Telefonica could also eliminate its valuation discount over time. CFRA has a “buy” rating and $4.50 price target for TEF stock, which closed at $4.23 on May 22.
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 network upgrade spending in North America and China will continue to support Nokia’s demand in coming years. Snyder says the 5G upgrade cycle will be larger and last longer than previous network upgrades. He says 2023 could be a rebound year for Nokia. The company projects 5G spending in India will grow its mobile networks total addressable market by 5% this year. CFRA has a “buy” rating and $6.50 price target for NOK stock, which closed at $4.08 on May 22.
Snap Inc. (SNAP)
Snap is the parent of Snapchat, a leading mobile-focused social media advertising company. Analyst Angelo Zino says Snap remains a highly speculative investment, but the company’s fundamental outlook has improved and its installed user base continues to grow. Zino says Snap can expand its monthly active users from 750 million to 1 billion within the next two to three years. He projects the company’s revenue growth rate will accelerate in the second half of 2023 and rebound to 12% in 2024. CFRA has a “buy” rating and $12 price target for SNAP stock, which closed at $9.76 on May 22.
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 will recover in 2023, and competition from TikTok and other entertainment platforms will ease. Halim projects 8% sales growth in 2023 and says ad revenue growth will boost margins over time. CFRA has a “buy” rating and $8 price target for TME stock, which closed at $7.64 on May 22.
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Aegon NV (AEG)
Aegon is a Dutch insurance company that offers insurance, savings, pension, and investment products and services around the world. The U.S. regional banking crisis has weighed on Aegon shares in 2023. However, analyst Jeff Lye says Aegon has a long-term track record of strong execution and is positioned to continue to deleverage its balance sheet in 2023, further reducing risk. Lye says Aegon is focused on strategic assets that can generate attractive returns on capital, stabilize the company’s capital ratio and facilitate dividends and buybacks. CFRA has a “buy” rating and $7 price target for AEG stock, which closed at $4.66 on May 22.
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 big growth numbers, but Telecom Italia’s 27.6% year-to-date gain through May 22 is the best performance of any stock on this list. Ng says the company’s revenues will likely continue to decline in its intensely competitive core markets. However, he says the company’s aggressive restructuring plan will help reduce debt and improve its balance sheet. CFRA has a “buy” rating and $3.50 price target for TIIAY stock, which closed at $2.91 on May 22.
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 monetization model that includes tiered membership services that appeal to customers at a wide range of income levels. After five years of net losses from focusing primarily on growing subscriber numbers, Abdullah says iQiyi is positioned to turn a profit in 2023. She says the company’s iQiyi Lite ad-supported tier could add an additional growth lever as well. CFRA has a “buy” rating and $8.50 price target for IQ stock, which closed at $4.92 on May 22.
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’s acquisition of Spartan Delta’s Matney assets in the first quarter will help the company maintain healthy production volumes, strategically boost free cash flow and increase shareholder returns. Crescent Point even maintained its full-year 2023 guidance after cutting production in Kaybob due to wildfires. CFRA has a “buy” rating and $7.80 price target for CPG stock, which closed at $6.74 on May 22.
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8 Best Cheap Stocks to Buy Under $10 originally appeared on usnews.com
Update 05/23/23: This story was previously published at an earlier date and has been updated with new information.
