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. However, the CFRA Research analyst team has identified nine cheap, high-quality stocks that could be excellent buying opportunities in 2023 for frugal investors.
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Here are nine of the best stocks to buy under $10, according to CFRA:
| Stock | Implied upside from Sept. 15 close |
| Telefónica SA (ticker: TEF) | 7.7% |
| Nokia Corp. (NOK) | 39.9% |
| Snap Inc. (SNAP) | 31% |
| Tencent Music Entertainment Group (TME) | 58.2% |
| Aegon NV (AEG) | 29% |
| Korea Electric Power Corp. (KEP) | 19.4% |
| Telecom Italia S.p.A. (OTC: TIIAY) | 6.4% |
| Polestar Automotive Holding UK PLC (PSNY) | 79.9% |
| Crescent Point Energy Corp. (CPG) | 5.1% |
Telefónica SA (TEF)
Telefónica is the leading telecom company in Spain. The stock pays a 7.8% forward dividend yield, the highest on this list and a rarity among stocks priced under $10. Analyst Adrian Ng says Telefonica has made positive changes to its portfolio that will help lower debt and optimize its business, including acquiring E-Plus in Germany and GVT in Brazil and leaving Central America. It has also agreed to a joint venture deal with Liberty Global PLC (LBTYA, LBTYB, LBTYK) in the U.K. that will provide a major cash infusion. CFRA has a “buy” rating and $4.50 price target for TEF stock, which closed at $4.18 on Sept. 15.
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 the 5G investment cycle in North America and China has been a growth catalyst for Nokia, and he anticipates the cycle will be larger and will last longer than previous cycles. Snyder says inflation and supply chain disruptions have been hurdles for Nokia, but the company’s strong results are a testament to its execution. He projects a return to positive revenue growth in 2024. CFRA has a “buy” rating and $5.50 price target for NOK stock, which closed at $3.93 on Sept. 15.
Snap Inc. (SNAP)
Snap is the parent of social media app Snapchat, and the company is a leading mobile-focused social media advertising company. Analyst Angelo Zino says Snap remains a highly speculative investment, but he is bullish on the stock’s valuation, its improving fundamentals and its growing installed user base. Within the next three years, Zino projects Snap’s monthly active user base will grow from 750 million to 1 billion. In addition, he says artificial intelligence initiatives should help Snap grow its subscription revenue. Zino projects revenue growth will rebound to 11% in 2024. CFRA has a “buy” rating and $12 price target for SNAP stock, which closed at $9.16 on Sept. 15.
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 on U.S.-listed Chinese tech stocks by Chinese and U.S. regulators have eased in 2023, but Chinese stocks have continued to lag behind as the post-pandemic rebound in the Chinese economy has fallen short of expectations. Analyst Ahmad Halim says online music streaming revenue may recover in the near term, which would boost Tencent Music’s margins. He projects 16% revenue growth in 2023. CFRA has a “buy” rating and $10 price target for TME stock, which closed at $6.32 on Sept. 15.
[READ: 15 Best Dividend Stocks to Buy Now]
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 proven track record of execution and its 2023 deleveraging and free cash flow targets are achievable. Lye says Aegon’s efforts to prioritize strategic assets that generate an attractive return on capital while reducing capital ratio volatility puts the company on the right track moving forward. He projects 5% revenue growth in 2024 and is bullish on Aegon’s aggressive capital return program. CFRA has a “buy” rating and $6.50 price target for AEG stock, which closed at $5.04 on Sept. 15.
Korea Electric Power Corp. (KEP)
Korea Electric Power is an integrated electric utility company that transmits and distributes electricity in South Korea. Halim says economic growth will slow in South Korea in 2023, but the government should support Korea Electric by implementing higher tariffs given its 51.1% ownership stake in the company. Halim projects a 15% average increase in tariffs in 2023, which will help drive 16% annual revenue growth for Korea Electric. In addition, he says higher nuclear utilization rates and lower fuel costs will offset higher renewable energy costs. CFRA has a “buy” rating and $8 price target for KEP stock, which closed at $6.70 on Sept. 15.
Telecom Italia S.p.A. (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. Telecom stocks are not generally known for their huge gains, but Telecom Italia shares are up 44.3% in 2023 through Sept. 15, the best performance of any stock on this list. Ng says there is investor interest in Telecom Italia’s assets, and major asset sales could help Telecom Italia reduce its debt, improve its balance sheet and dial back risk for investors. CFRA has a “buy” rating and $3.50 price target for TIIAY stock, which closed at $3.29 on Sept. 15.
Polestar Automotive Holding UK PLC (PSNY)
Polestar Automotive designs and manufactures electric vehicles. The company has two EV models on the market and expects to launch three additional models by 2025. Polestar shares are down 47.6% this year through Sept. 15, the worst performance of any stock on this list. Analyst Garrett Nelson says he is confident in Polestar’s prospects relative to other EV startups. In the past two years, Polestar has grown its EV deliveries by a factor of five. Nelson says Polestar is already generating a gross profit, another great reason to own the stock. CFRA has a “buy” rating and $5 price target for PSNY stock, which closed at $2.78 on Sept. 15.
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 and 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 took advantage of the spike in crude oil and natural gas prices in recent years, significantly reducing its long-term debt and improving its balance sheet. CFRA has a “buy” rating and 12 Canadian dollar ($8.90) price target for CPG stock, which closed at $8.47 on Sept. 15.
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9 Best Cheap Stocks to Buy Under $10 originally appeared on usnews.com
Update 09/18/23: This story was previously published at an earlier date and has been updated with new information.
