Stocks trading for less than $10 can be attractive for investors looking to scoop up some cheap shares. Unfortunately, quality stocks in that category are few and far between, and a low price 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 for frugal investors.
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Here are nine of the best cheap stocks to buy under $10, according to CFRA:
| Stock | Implied upside from Nov. 17 closing price |
| Telefónica SA (ticker: TEF) | 11.4% |
| Nokia Corp. (NOK) | 54.5% |
| Tencent Music Entertainment Group (TME) | 7.5% |
| Aegon Ltd. (AEG) | 20.8% |
| Korea Electric Power Corp. (KEP) | 15.6% |
| New York Community Bancorp Inc. (NYCB) | 29.3% |
| Telecom Italia S.p.A. (OTC: TIIAY) | 26.4% |
| iQiyi Inc. (IQ) | 27.9% |
| Polestar Automotive Holding UK PLC (PSNY) | 44.2% |
Telefónica SA (TEF)
Telefónica is the leading telecommunication company in Spain. The stock pays an 8% dividend, which is the highest on this list and a rarity among stocks priced under $10. Analyst Adrian Ng says Telefónica has made several changes to its portfolio to streamline its business and improve its balance sheet. The company has acquired E-Plus in Germany and GVT in Brazil. It has also exited Central America and will get a large cash infusion by combining its U.K. telecom assets in a joint venture with Liberty Global PLC (LBTYA, LBTYB). CFRA has a “buy” rating and $4.50 price target for TEF stock, which closed at $4.04 on Nov. 17.
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 upgrade investments in North America and China are supporting Nokia’s demand, and he predicts the 5G investment cycle will be larger and more durable than previous cycles. Nokia reportedly lost market share in its North American mobile networks division in the first half of 2023, but Snyder says the company is confident it can outgrow its industry peers and regain that share. CFRA has a “buy” rating and $5.50 price target for NOK stock, which closed at $3.56 on Nov. 17.
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 the company’s social entertainment service segment revenue has been soft, but he expects online music services paying subscriber penetration rates to increase further in coming quarters. CFRA has a “buy” rating and $9 price target for TME stock, which closed at $8.37 on Nov 17.
Aegon Ltd. (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 an impressive track record of execution, and the company’s 2023 deleveraging and free cash flow targets are well within reach. Lye is bullish on the company’s strategy of focusing on strategic assets that reduce the volatility of the company’s capital ratio and generate an attractive return on capital. He says Aegon can achieve a 20% cash yield to shareholders within 12 months. CFRA has a “buy” rating and $6.50 price target for AEG stock, which closed at $5.38 on Nov. 17.
[READ: 15 Best Dividend Stocks to Buy Now]
Korea Electric Power Corp. (KEP)
Korea Electric Power is an integrated electric utility company that transmits and distributes electricity in South Korea. Halim says a slowing Korean economy will weigh on commercial and industrial power demand, but significantly higher tariffs could offset some of that demand weakness for Korea Electric Power. He estimates a 15% increase in average tariffs in 2023 will drive 16% revenue growth for the company. In addition, the Korean government’s more than 51% ownership stake in Korea Electric Power assures the company will get favorable legislative treatment. CFRA has a “buy” rating and $8 price target for KEP stock, which closed at $6.92 on Nov. 17.
New York Community Bancorp Inc. (NYCB)
New York Community Bancorp is a U.S. regional bank that focuses primarily on rent-regulated, non-luxury, multifamily lending in the Northeast and Midwest regions. During the regional banking crisis in early 2023, New York Community Bancorp stepped in to acquire $2.7 billion in assets from the failed Signature Bank, including its 40 bank branches. Analyst Alexander Yokum says New York Community Bancorp’s non-interest-bearing deposits have jumped from 9% of total deposits a year ago to 30% of total deposits today, giving the bank a strong financial profile. CFRA has a “buy” rating and $12 price target for NYCB stock, which closed at $9.28 on Nov. 17.
Telecom Italia S.p.A. (TIIAY)
Telecom Italia is the leading fixed-line and wireless telecommunication 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 returns, but Telecom Italia shares are up 21.5% in 2023 through Nov. 17, the best performance of any stock on this list. Ng says there has been ongoing interest from investors for Telecom Italia’s assets, and merger and acquisition deals will likely remain a key to the stock’s upside in the medium term. CFRA has a “buy” rating and $3.50 price target for TIIAY stock, which closed at $2.77 on Nov. 17.
iQiyi Inc. (IQ)
iQiyi is a leading Chinese streaming video platform that is often compared to U.S. streaming platform Netflix Inc. (NFLX). Analyst Siti Salikin says iQiyi has an innovative monetization model, which includes multiple tiered membership levels that allow the company to cater to customers at different price points. Salikin says the company is on track to report its first annual profit in 2023 following five years of impressive subscriber growth but overall net losses. She says growing online advertising revenue and cost-cutting measures are improving iQiyi’s margins. CFRA has a “buy” rating and $6.50 price target for IQ stock, which closed at $5.08 on Nov. 17.
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 60.8% through Nov. 17 this year, the worst performance of any stock on this list. Analyst Garrett Nelson says Polestar has an attractive growth outlook compared to most of its EV manufacturing peers. The company has already reached gross profitability, and its EV deliveries are up fivefold in just two years. Nelson is particularly bullish on the company’s exposure to EV-friendly Europe. CFRA has a “buy” rating and $3 price target for PSNY stock, which closed at $2.08 on Nov. 17.
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9 Best Cheap Stocks to Buy Under $10 originally appeared on usnews.com
Update 11/20/23: This story was previously published at an earlier date and has been updated with new information.
