Identifying cheap stocks is increasingly difficult as the market continues to hit new highs. But even if you have a long list of cheap stocks trading for a low share price, that in itself is no guarantee of success.
That’s because the best cheap stocks aren’t battered companies that sat out the past few years of the bull market — they are cheap stocks that will become expensive in a hurry thanks to favorable growth prospects.
Sometimes the best cheap stocks have underperformed, but are on the cusp of a turnaround. Other times the best cheap stocks are simply sleepy companies that have been overlooked and actually are worth much more than investors are currently paying per share.
But the bottom line is that “cheap” isn’t just based on the headline price you’re paying – it’s about a fair price, with a good value and the realistic hope of big returns down the road.
So what are the best cheap stocks to buy now? Here’s my list of 11 picks under $10 that could deliver big returns during the next few months: