[Editor’s Note: “10 Cheap Stocks to Buy Under $10” is regularly updated to include the most relevant information available.]
For new investors, looking at companies like Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and even fast-casual restaurant Chipotle (NYSE:CMG) can be disconcerting. These well-respected names come with massive price tags. Although these stocks have long histories of solid returns and great growth potential still ahead, they may not be realistic first investments for someone just starting out. However, these cheap stocks to buy for less than $10 offer both learning opportunities and huge upside potential.
There’s also something exciting about investing in cheap stocks. It seems like everyone wants to find the few names that will truly soar, bringing in unbelievable returns in one month or one year. But many of these names are highly volatile, and for good reason. Some even deserve to fall further. These cheap stocks are often cannabis or biotech plays, banking on hot market concepts or a drug still waiting for U.S. Food and Drug Administration approval. While many of these will fall, some will soar.
In evaluating cheap stocks to buy, it is important to look at more than just the price. What is the company? What is its potential to grow and profit in the coming years? How does Wall Street feel?
Chitru Fernando, professor of finance at the University of Oklahoma’s Michael F. Price School of Business, told InvestorPlace that there are some obvious risks when investing in cheap stocks.
“No company likes its stock price falling below a dollar,” Fernando said in an email. “And stocks with prices below $5 are stigmatized as ‘penny stocks.’ A very low stock price is almost always a symptom of an underperforming firm.”
But beyond the risks there is potential for big reward. In no particular order, here are 10 cheap stocks to buy right now:
- Angie Homeservices (NASDAQ:ANGI)
- Boingo Wireless (NASDAQ:WIFI)
- Vonage (NYSE:VG)
- Lovsac (NASDAQ:LOVE)
- Glu Mobile (NASDAQ:NDLS)
- Mesa Air Group (NASDAQ:MESA)
- B2Gold (NYSEMKT:BTG)
- ChannelAdvisor (NYSE:ECOM)
- Turtle Beach (NASDAQ:HEAR)
- RealReal (NASDAQ:REAL)
These 10 stocks all have “strong buy” consensus ratings and price targets that imply greater than 20% upside from their current share prices. They’re cheap stocks with rich paths ahead.
Cheap Stocks to Buy: Angi Homeservices (ANGI)
Projected 12-Month Upside: 132%
Shares of Angi Homeservices (NASDAQ:ANGI) stock began trading in October 2017, following the merger of Angie’s List and HomeAdvisor. Now, ANGI encompasses those brands as well as Handy, CraftJack and HomeStars.
Although it’s not exactly breaking news that e-commerce — led, of course, by Amazon — is disrupting everything, it’s still important to note that the trend weighed on the home services market. But now, it looks like Angi Homeservices is ready to make a comeback.
A quick trip to the Angie’s List website can match you with air duct cleaning, floor repair or holiday decorating specialists, just to name a few. And this streamlined home services process is exactly what will keep boosting ANGI stock.
To be fair, since 2017, ANGI stock hasn’t had the smoothest run. The coronavirus from China is weighing on the market and Angi’s Homeservices is feeling some of that heat.
When the company last reported earnings, revenue was up 15% year-over-year. However, the market focused on the operating income figure, which was down to $6.2 million.
But CEO Brandon Ridenour said ANGI was on track to hit a 20%-25% long-term growth rate. Plus, the new fixed-price business, which gives customers set prices for certain services, should be a tailwind in 2020.
As this new model expands, Angi’s Homeservices should increase its profits. So, as more people hop to their phones to find a service provider — and at a competitive, fixed rate — Angi’s Homeservices and ANGI stock will continue this turnaround. With a share price just under $5 and a 12-month price target of $11.29, the future looks bright.
Boingo Wireless (WIFI)
Projected 12-Month Upside: 166%
I can’t say that my initial interest in Boingo Wireless (NASDAQ:WIFI) wasn’t entirely based on my love for the band Oingo Boingo, but upon further research, I can see why analysts have a consensus 12-month price target implying 166% share-price upside.
What exactly is Boingo Wireless? Well, the company acquires long-term wireless rights for large venues, including airports, military bases and universities. Once it has those rights, it monetizes the networks with advertising and fees. In 2018, Boingo acquired Elauwit, a provider of WiFi to 220 student housing properties in the U.S. At the time, Boingo CEO David Hagan lauded this deal as an opportunity to grow into multi-family and student housing services.
Commuters also may be familiar with Boingo Wireless. The company won a contract with New York’s Metropolitan Transit Authority for two major projects in 2018. These projects consisted of designing, building and operating wireless services for two portions of New York’s transit system. To date, these are the company’s largest contracts.
Although Boingo Wireless is down from its all-time highs, it’s clear that big projects and big upside potential is in its future. WIFI stock will grow as it expands into student housing and transit. This is especially true considering that D.C. and other cities continue to roll out WiFi in stations. Wall Street agrees — it has received several “buy” ratings in the last month.
Vonage (VG)
Projected 12-Month Upside: 186%
Vonage (NYSE:VG) is getting a makeover, and boy, does it need one.
After the company’s 2006 IPO, Vonage customers filed a class-action lawsuit after early investors lost money. By the end of the year, VG stock was down almost 60%.
And 2019 wasn’t much prettier, bringing a 20% share-price decline. But things might finally be looking up. Since the start of the new year, VG shares have been in the green, up almost 18%. And after a long history of transformations and failures, Vonage shareholders are probably crossing their fingers that this makeover sticks.
From a residential telecommunications provider to a voice over internet protocol (VoIP) services provider, Vonage is a company that had already transformed once. Now, inspired by big names like Salesforce (NYSE:CRM) and Oracle (NYSE:ORCL), the company is switching to the software-as-a-service world.
On Oct. 30, Vonage announced several new products, a new logo and a fresh marketing campaign designed to make one thing very clear: The company plans on being a leader in this new software era.
These days, it looks like Wall Street agrees with CEO Alan Masarek’s plans to reinvent global communications. Plus, the notion of disrupting existing technology is now more than a buzz-worthy notion — it’s something investors are actively looking for in stocks to buy.
If Vonage can manage to pull of this transition, it just might reach its $12.94 12-month price target, implying more than 180% upside.
Lovesac (LOVE)
Projected 12-Month Upside: 390%
The next company on this list has a name that certainly drew my attention. But what exactly is Lovesac (NASDAQ:LOVE)?
Essentially Lovesac is a furniture retailer that specializes in modular furniture. Its signature products are the “Sac” and the “Sactional” — a play on beanbag chairs and the more-familiar sectional sofa.
The company started in 1995, primarily outfitting college dorm rooms with hand-made chairs. Over its lifetime it has faced everything from Chapter 11 bankruptcy risks to the furniture industry’s highest honors. Although LOVE stock is down hard from its 2018 IPO, there’s still a lot to, well, love.
The past year was a rough one for the company. Much of its production is based in China, so the U.S.-China trade war was certainly a heavy weight. But tensions are easing. And Lovesac is moving its factories.
CEO Shawn Nelson promises the company is on the rebound, and its December-quarter report showed comparable-store sales up almost 33%. Lovesac has 80 retail showrooms that support its e-commerce business model.
The trendy, apartment-friendly furniture stands out. Some Sactional models retail for $6,000. The Citysac, a fancy beanbag for one adult, retails for $550.
With Instagram-worthy offerings and easing trade tensions, 2020 could be a big year for LOVE stock. Plus, a 12-month price target of $22.25 implies 390% upside from its current share price.
Glu Mobile (GLUU)
Projected 12-Month Upside: 33%
Got games on your phone? If so, you might be like the other 2.4 billion-plus consumers that are estimated to have games on their phone this year. And those gamers are responsible for the $68.5 billion mobile gaming market. For Glu Mobile (NASDAQ:GLUU), these statistics might be just the lifeboat the company needs to turn its narrative around.
It’s safe to say the video game industry is undergoing massive changes. On the more traditional side, consoles are becoming obsolete and streaming subscriptions for games are on the rise. These broader shifts are providing a nice tailwind for mobile gaming companies like Glu Mobile. As gamers care more about accessibility, free-to-play games that they can easily access on any smartphone are garnering attention.
And this attention isn’t just coming from those playing games. Tencent (OTCMKTS:TCEHY) invested $126 million in Glu Mobile, representing an almost 15% stake. Companies like Tencent, as well as financial institutions, are waking up to the potential stored within fun, accessible mobile games.
It’s important to note that GLUU stock is coming off a rough year, down almost 50% over the last 12 months. However, its packing its pipeline with both original and third-party branded games. Licenses for Kim Kardashian: Hollywood, MLB Tap Sports Baseball and Restaurant Dash with Gordon Ramsay use big names to draw in attention. Analysts are looking at partnerships like those with the MLB and WWE to boost Glu Mobile stock in 2020 and beyond.
So, next time you’re scrolling through your phone to play your favorite mobile game, consider adding GLUU stock to your portfolio. With a 12-month price target of $7.75, there’s certainly some winning ahead.
Mesa Air Group (MESA)
Projected 12-Month Upside: 339%
It’s a bad time to be a travel company. Airlines are cancelling flights, cruise ships are in quarantine and vacation stocks are deeply in the red.
But good times will come back. It would be crazy to suggest that the coronavirus is ending travel as we know it, and airline stocks will soon rebound. This should bring good things to Mesa Air Group (NASDAQ:MESA).
Mesa is a regional airline that provides flights for American Airlines (NASDAQ:AAL) and United Airlines (NASDAQ:UAL). This means it’s fairly dependent on the larger operators, and the big boys are struggling in 2020.
MESA stock is down 60% so far this year, but do me a favor and ignore some of the coronavirus noise. Let’s focus on the fundamentals. After performance issues that haunted the company in 2019, things might be looking up.
The airline’s controllable completion factor, a measure of actual departures over scheduled departures, was up in its fiscal first quarter. It also reported a 2.1% year-over-year rise in total passengers. What’s more, it plans to increases its fleet to 165, thanks to an addition of 20 of Embraer’s (NYSE:ERJ) E175 models.
Mesa Air Group definitely has some kinks to work out, but it might just be time for the wheels on MESA stock to go up. It certainly stands to benefit when the coronavirus subsides and consumers take to the air once more.
B2Gold (BTG)
Projected 12-Month Upside: 71%
With a $3 billion market capitalization, B2Gold (NYSEMKT:BTG) is not the largest in the gold-mining realm, but it’s picking up sparkle. In the last month, several analysts have hopped on board with “buy” recommendations for the Canadian company, citing its potential.
In 2007, after Kinross Gold (NYSE:KGC) acquired Bema Gold, B2Gold’s story started. After the acquisition, a few executives from Bema founded BTG, and began making mine purchase around the world.
Now B2Gold holds mining properties in Nicaragua, the Philippines, Mali, Colombia, Burkina Faso and Namibia. BTG stock has almost doubled in the past five years, and returned almost 40% gains in 2019.
But analysts think it can grow more in 2020, with a 12-month price target just under $5.
That’s not surprising. Gold has been a hot topic in the last few weeks, thanks to its reputation as a safe haven investment. After news the coronavirus was spreading outside of China broke, a massive selloff hit the markets.
While stocks broadly are down, things should turn around, soon. Look for 2020 to be extra rich for BTG stock.
ChannelAdvisor (ECOM)
Projected 12-Month Upside: 170%
E-commerce has been dominating the world as we know it. Amazon led the way, disrupting brick-and-mortar retailers. Now, businesses must take their products and services to the web in order to succeed.
But those small businesses also need convenient ways to market, sell and deliver their products. That’s where e-commerce software provider ChannelAdvisor (NYSE:ECOM) comes in.
At a market cap of just over $130 million, ChannelAdvisor is a small fish in the big e-commerce sea. Main competitor Shopify (NYSE:SHOP) is worth $40 billion.
But for investors searching for cheap stocks, ChannelAdvisor offers a compelling history and a good growth narrative. Between 2010 and 2019, it grew revenue $37 million to $130 million. For its fourth quarter, adjusted earnings before interest, taxes, depreciation and amortization of $9.4 billion practically doubled year-over-year.
ChannelAdvisor counts Crocs (NASDAQ:CROX), Fossil (NASDAQ:FOSL) and Whirlpool’s (NYSE:WHR) KitchenAid brand among its biggest success stories. While it’s guiding for flat revenue and EBITDA, it’s starting to attract more attention. It received the “best solution for international expansion” award at the annual E-Commerce Germany Awards. That kind of praise could boost its visibility and send shares higher in 2020.
Despite its small size and less-than-thrilling guidance, analysts see 100%-plus upside for ECOM stock. It might just be the future of e-commerce, or at least the next Shopify.
Turtle Beach (HEAR)
Projected 12-Month Upside: 197%
You might find it a little odd that I’m recommending Turtle Beach (NASDAQ:HEAR) in 2020. Yes, it’s true that gamers are increasingly shifting to mobile and subscription games. But 2020 has a big catalyst for the maker of gaming headsets.
The California-based tech company makes headsets for PC, mobile devices, the Xbox One, PlayStation 4 and Nintendo Switch. And in case you haven’t heard, this will be a big year for gaming consoles.
Microsoft (NASDAQ:MSFT) is set to release its next-generation console, Xbox Series X. Sony (NYSE:SNE) will also roll out the PlayStation 5. Both new consoles will be out in time for holiday shopping, which should not only help those two companies, but all associated retailers.
Some analysts already think that 2020 will be a good year for beleaguered game retailer GameStop (NYSE:GME), thanks to the excitement the new consoles will bring. With that in mind, there’s no reason that 2020 shouldn’t also be a good year for Turtle Beach. As gaming attention turns back to hardware and accessories, headsets that support the new consoles should find sales success.
To be clear, Turtle Beach might not be a cheap stock to buy forever. But for 2020, spurred on by big news in gaming, I’d keep a close watch on HEAR stock.
RealReal (REAL)
Projected 12-Month Upside: 164%
It’s one thing to use e-commerce sites to buy daily goods, like toilet paper (pardon the reference), and even the average clothing item. But isn’t there something special about the brick-and-mortar experience that comes with buying a true luxury good?
That’s where new IPO RealReal (NASDAQ:REAL) comes in. CEO Julia Wainwright founded the company in 2017, offering consumers a chance to blend the convenience of e-commerce with the experience of shopping for fine jewelry, watches art and home decor. Since then, she’s also opened a permanent storefront to boost the company’s visibility.
E-commerce is clearly the future, and people aren’t likely to stop buying luxury items. That logically bodes well for REAL stock. But there’s something else for investors to like — its environmental, social and governance (ESG) friendly.
The company is based on the circular economy — a situation where no waste is created. That’s right, the luxury items you shop for with RealReal are all consigned.
But that’s not all. In 2018, the company launched a sustainability calculator to encourage shoppers to take consigning seriously. The calculator even lets you see your environmental impact in terms of how many car miles you save when you shop secondhand.
This perfect blend of e-commerce and ESG investing is certainly what has Wall Street hot on the stock. Its 12-month price target of $21.17 implies 164% of upside.
Sarah Smith is a Web Editor for InvestorPlace.com. As of this writing she did not hold any of the aforementioned securities.