Stocks trading under $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.
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However, the CFRA Research analyst team has identified nine 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:
| Stock | Implied upside as of July 19 market close |
| Nokia Corp. (ticker: NOK) | 65.0% |
| Telefónica SA (TEF) | 11.4% |
| Tencent Music Entertainment Group (TME) | 42.5% |
| Aegon NV (AEG) | 34.6% |
| Telecom Italia S.p.A. (TIIAY) | 22.0% |
| iQiyi Inc. (IQ) | 61.6% |
| Crescent Point Energy Corp. (CPG) | 7.0% |
| Rocket Lab USA Inc. (RKLB) | 0.9% |
| Oatly Group AB (OTLY) | 77.0% |
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 5G network rollouts in North America and China are gaining momentum, and he predicts the global 5G investment cycle will be larger and longer-lasting than previous cycles. Nokia is positioned to regain lost mobile network market share in 2023. Snyder says Nokia has overcome supply chain disruptions and inflation to deliver better-than-expected earnings, and he projects 2.9% revenue growth in 2023. CFRA has a “buy” rating and $6.50 price target for NOK stock, which closed at $3.94 on July 19.
Telefónica SA (TEF)
Telefónica is the leading telecommunications company in Spain. The stock pays an 8.1% dividend, the highest on this list and a rarity among stocks priced under $10. Analyst Adrian Ng says Telefónica’s portfolio repositioning, including acquiring E-Plus in Germany and GVT in Brazil and exiting Central America, will help it reinforce its core business and reduce its debt load. Telefónica will also receive about $3.2 billion in cash from its deal to combine U.K. telecom assets in a joint venture deal with Liberty Global PLC (LBTYA). CFRA has a “buy” rating and $4.50 price target for TEF stock, which closed at $4.04 on July 19.
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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 a recovery in online music streaming in 2023 could drive margin expansion. In the longer term, Halim says high-margin advertising growth will boost profitability. He projects at least 7% revenue growth in 2023. CFRA has a “buy” rating and $10 price target for TME stock, which closed at $7.02 on July 19.
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’s proven track record of execution suggests its 2023 free cash flow and debt reduction targets are achievable. In addition, he is bullish on the company’s commitment to capital returns and focus on strategic assets that generate an attractive return on capital while reducing volatility in the company’s capital ratio. CFRA has a “buy” rating and $7 price target for AEG stock, which closed at $5.20 on July 19.
Telecom Italia S.p.A. (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 the company has not yet announced plans to sell its landline grid and submarine cable unit, despite ongoing investor interest in those assets. Nevertheless, Ng says merger and acquisition activity will be a central component of Telecom Italia’s debt reduction plans moving forward. Brazil will likely continue to be a significant growth market for Telecom Italia. CFRA has a “buy” rating and $3.50 price target for TIIAY stock, which closed at $2.87 on July 19.
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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 a range of different offerings, including premium and on-demand content, tiered memberships and a multifaceted monetization model. After five years of net losses and focus on growing subscriber numbers, Abdullah says iQiyi will finally turn a profit in 2023. Looking ahead, Abdullah says the company’s as-supported basic subscription package on iQiyi Lite will be a new advertising revenue growth driver. CFRA has a “buy” rating and $8.50 price target for IQ stock, which closed at $5.26 on July 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. Global energy shortages coupled with commodity price inflation led to record energy sector profits in 2022, allowing companies like Crescent Point to reduce debt and improve their balance sheets. Analyst Jonnathan Handshoe says Crescent Point will generate about $900 million in excess cash flows and report earnings before interest, taxes, depreciation and amortization, or EBITDA, margins of 61% in 2023, up from 51% in 2022. CFRA has a “buy” rating and $7.95 price target for CPG stock, which closed at $7.43 on July 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. The stock’s share price has taken off like a rocket in 2023, gaining 110.3% as of July 19.
Snyder says Rocket is one of the top launch providers for customers with small payloads, sporting a better track record of successful launches than other small providers and offering more mission customization than SpaceX and other larger providers. Snyder projects 41.7% revenue growth in 2023. CFRA has a “buy” rating and $8 price target for RKLB stock, which closed at $7.93 on July 19.
Oatly Group AB (OTLY)
Oatly is the world’s largest oat milk producer. Oatly shares are down 44.3% in the past year as of July 19, the worst performance of any stock on this list. At less than $2.50 per share, analyst Arun Sundaram says Oatly is attractively valued and is well positioned to be a market leader in the high-growth oat milk market, which has been gaining market share from dairy and plant-based milk for several years now.
Sundaram projects Oatly’s revenue growth will accelerate from 12% in 2022 to 25% in 2023. CFRA has a “buy” rating and $4 price target for OTLY stock, which closed at $2.26 on July 19.
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9 Best Cheap Stocks to Buy Under $10 originally appeared on usnews.com
Update 07/20/23: This story was previously published at an earlier date and has been updated with new information.
