Stocks trading for less than $10 can be attractive for investors looking to scoop up some cheap shares. Unfortunately, quality stocks at that price point are few and far between and can be a red flag for investors that something is wrong with a company. Many of these stocks have challenged underlying business models or difficult near-term outlooks.
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There are still some good buys out there, however, and the CFRA Research analyst team has identified nine cheap, high-quality stocks that could be excellent opportunities for frugal investors. Here are nine of the best stocks to buy under $10, according to CFRA:
| Stock | Implied upside from Jan. 18 close |
| Telefónica SA (ticker: TEF) | 10.3% |
| Nokia Corp. (NOK) | 58.5% |
| Tencent Music Entertainment Group (TME) | 2.9% |
| Aegon Ltd. (AEG) | 10.9% |
| Korea Electric Power Corp. (KEP) | 22% |
| Telecom Italia S.p.A. (OTC: TIIAY) | 16.3% |
| First Quantum Minerals Ltd. (OTC: FQVLF) | 12.4% |
| Polestar Automotive Holding UK PLC (PSNY) | 55.4% |
| iQiyi Inc. (IQ) | 73.8% |
Telefónica SA (TEF)
Telefónica is the leading telecommunications company in Spain. The stock pays a 7.9% dividend, the highest on this list and a rarity among stocks priced under $10. Analyst Adrian Ng says Telefónica has made several strategic adjustments that have improved the company’s balance sheet and outlook. Telefónica has exited Central America, combined its U.K. telecom assets in a joint venture deal with Liberty Global PLC (LBTYA, LBTYB), and acquired GVT in Brazil and E-Plus in Germany. Ng says Telefónica’s mobile business in Germany has been particularly strong. CFRA has a “buy” rating and $4.50 price target for TEF stock, which closed at $4.08 on Jan. 18.
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 initial phase of 5G investment in China and North America has gained momentum, and he anticipates the global 5G cycle will be larger and longer-lasting than previous upgrade cycles. Snyder says Nokia has executed well in a challenging, inflationary environment. He is bullish on the company’s improved earnings visibility, and 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 $3.47 on Jan. 18.
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 eased in 2023, but Chinese stocks have continued to underperform as the post-pandemic rebound in the Chinese economy has fallen short of expectations. Analyst Ahmad Halim says he is optimistic about Tencent Music’s longer-term margin outlook as it generates more higher-margin ad revenue, and he anticipates continued user growth. CFRA has a “buy” rating and $9 price target for TME stock, which closed at $8.75 on Jan. 18.
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’s management team has an impressive track record of execution, and he believes the company will achieve its near-term targets for debt reduction, free cash flow and operating capital. Lye says Aegon is making the right move by focusing on strategic assets that reduce capital ratio volatility and generate an attractive return on capital. The company is also committed to dividends and buybacks and offers a 4.8% yield. CFRA has a “buy” rating and $6.50 price target for AEG stock, which closed at $5.86 on Jan. 18.
[READ: 10 of the Best Stocks to Buy for 2024]
Korea Electric Power Corp. (KEP)
Korea Electric Power is an integrated electric utility company that transmits and distributes electricity in South Korea. Analyst Siti Salikin says the Korean economy will likely continue to slow in 2024, weighing on commercial and industrial power demand. However, Salikin says higher tariffs will offset the negative impact of that slowing growth for Korea Electric. In the longer term, she says investors can sleep easy at night knowing that the Korean government will likely issue supportive policies given its 51.1% ownership stake in Korea Electric. CFRA has a “buy” rating and $8.50 price target for KEP stock, which closed at $6.97 on Jan. 18.
Telecom Italia S.p.A. (OTC: 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 Telecom Italia’s deal to sell its network to KKR & Co. Inc. (KKR) is not surprising, as it is prioritizing asset sales and debt reduction. He says competition in Telecom Italia’s core markets is intense, but growth in Brazil has been a bright spot. CFRA has a “buy” rating and $3.50 price target for TIIAY, which closed at $3.01 on Jan. 18.
First Quantum Minerals Ltd. (OTC: FQVLF)
First Quantum Minerals is one of the world’s largest copper producers, operating mines in Zambia, Panama, Finland, Turkey, Spain and Mauritania. Analyst Matthew Miller says First Quantum has an attractive valuation, and he is bullish on the outlook for copper prices. Rising geopolitical risks in Panama, including the government shutdown of First Quantum’s Cobre Panama mine, are responsible for the recent sell-off in First Quantum shares. However, Miller says Cobre Panama is too important to Panama’s economy to remain closed for an extended period. CFRA has a “buy” rating and 14 Canadian dollar ($10.39) price target for FQVLF stock, which closed at $9.24 on Jan. 18.
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 65% in the past year, the worst performance of any stock on this list. Analyst Garrett Nelson says the weakness is a buying opportunity for long-term investors given Polestar’s superior growth prospects relative to its EV peers. He is particularly bullish on the company’s exposure to Europe, which has higher EV adoption rates than the U.S. CFRA has a “buy” rating and $3 price target for PSNY stock, which closed at $1.93 on Jan. 18.
iQiyi Inc. (IQ)
iQiyi is a leading Chinese streaming video platform that is often compared to U.S. streaming platform Netflix Inc. (NFLX). Salikin says iQiyi has a valuable library of premium, on-demand content and an attractive business model that includes multiple tiers and subscriptions that cater to a wide range of customers. After five years of net losses, she says the company is on track to report a net profit in 2023. She says the company’s ad-supported basic subscription package on iQiyi Lite could be a growth catalyst. CFRA has a “buy” rating and $6.50 price target for IQ stock, which closed at $3.74 on Jan. 18.
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9 Best Cheap Stocks to Buy Under $10 originally appeared on usnews.com
Update 01/19/24: This story was previously published at an earlier date and has been updated with new information.
