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The 5 Best Stocks to Buy Around $5

Low-priced stocks often are there for a reason ... but sometimes, a heavily discounted stock is a bargain, not a time bomb

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Best Stocks to Buy for Around $5: Hercules Offshore (HERO)

best-stocks-to-buy-hero-stockOil stocks haven’t really been all that kind to investors over the last few years as weak pricing coupled with weaker energy demand in emerging markets has hurt the bottom line.

But one area of the energy sector worth looking at is offshore oil drillers, including leader Hercules Offshore (HERO). While oil prices are soft, the bottom line is that the world’s easy oil is gone and energy companies are increasingly turning to harder-to-access offshore oil and gas fields in order to bolster reserves … and that means big business for servicers like HERO.

Now, Hercules’ stock price sits at roughly half of its 2013 peak and has run into trouble since its largely shallow-water business hasn’t been booming. But the company divested a number of barge-based rigs in 2013, and is about breakeven right now.

While it’s unlikely that we will see a surge in oil prices leading to a surge in drilling contracts, the good news is that HERO appears to be right-sized now for the current market environment and has decent upside potential if investment in oil and gas drilling stays strong.

After a big drop during the past few years, much of the negativity has been priced into the energy sector broadly and this sub-$5 stock in particular.

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