When the market is this volatile, small stocks tend to get overlooked as many investors either scramble for safety (big blue chips) or just walk away until things settle down.
That leaves cheap A-rated stocks under $10 with little competition for their shares right now.
No one is deliberately avoiding this sector or these stocks … it’s just that they’re overlooked in these kinds of markets. But if you do look, you will be surprised how many of these small stocks have some very big businesses as their engines.
Just bear in mind, because they’re lightly traded (relatively speaking), you don’t want to chase these stocks. Maybe 10% above current prices is a good limit. If they go past that, be patient and see if they come back, or buy partial positions over time to get the price.
If one or two get away from you, just look for a couple more; these 7 cheap stocks are all worth your interest.
Cheap Stocks to Buy: Primo Water Corporation (PRMW)
Primo Water Corporation (PRMW) is one of the nation’s top provider of multi-gallon water jugs, self-service refill and water dispensers.
With infrastructure around the U.S. in need of significant repairs and few municipalities or even states having the funds to put into everything, many times water quality and distribution becomes something that ends up getting put on the back-burner when the budgets are made.
Flint, Michigan is the worst-case scenario of what happens when government ignores serious problems in order to save a buck.
But the fact is, water systems are antiquated, and there’s little money to upgrade them. And as cities grow or droughts occur, water demand increases to the point where the existing infrastructure doesn’t have a chance.
PRMW is all over this trend. And with distribution points in major retailers like Lowe’s (LOW), Kroger (KR) and Walmart (WMT), it makes it very easy for businesses as well as consumers to simply swing by and either refill or trade-in used containers.
Cheap Stocks to Buy: Xinyuan (XIN)
Xinyuan Real Estate Co., Ltd (ADR) (XIN) is a Chinese real estate company.
But before you skip this stock, hear me out.
XIN is one of the leading developers and managers of quality middle income housing in 10 of China’s top tier-1 and tier-2 cities.
While the broad Chinese market is certainly anemic, that doesn’t mean all of China’s economy has contracted. There are still plenty of people who want to buy hard assets rather than hang on to swiftly devaluing yuan (the Chinese currency).
Many analysts have speculated that China is letting the yuan drop so its exports are relatively cheaper for other countries to buy. It also might be using the devaluation to help fuel internal consumption for hard assets and durable goods.
For example, in the past year, which has ravaged many Chinese and U.S. stocks, XIN is up more than 50%. And what’s more, it pays out a 5.6% dividend yield. This is definitely one of those cheap stocks that’s worth a look.
Cheap Stocks to Buy: Zagg (ZAGG)
Zagg Inc (ZAGG) is fast-rising player in the mobile device space. It manufactures and sells protective cases for mobile devices, as well as plug-in keyboards and ear buds.
Look around. Everyone has this stuff. And if you have multiple devices (who doesn’t?), you have even more of it. Zagg also builds mobile power solutions and Bluetooth enable speakers and headsets.
Gone are the days of sharing music by playing it loudly enough for everyone to hear. Now sharing is done on iPhones or Galaxies, and it’s an individual thing. And that trend is only going to get more pervasive.
Earlier this month, ZAGG completed a merger of competitor Mophie for around $100 million. It is consolidating its market position in a dyanmic growth industry. Sounds good from here.
Cheap Stocks to Buy: NetSol (NTWK)
NetSol Technologies Inc. (NTWK) is a unique company in a unique niche.
NTWK licenses its two proprietary financial systems to auto dealers, banks and equipment manufacturers to develop leases for their products.
This is a strong market, even when the economy isn’t doing well. If money is tight, it usually becomes a better option to lease something at a low rate than to buy something that you may not get the full value of when you’re done using it.
When dealing with commercial equipment, this is especially true.
NTWK’s biggest challenge has been getting customers to upgrade to its latest and greatest software packages. It stopped licensing its old software in 2013 and had a tough couple of years getting its clients — like Ford Motor Company (F), JPMorgan Chase & Co. (JPM), Citigroup Inc (C) and Cisco Systems, Inc (CISCO) — to switch over.
But customers are finally coming around. In late December, NTWK announced a record-setting $100 million contract with a major firm that has locations across Asia and Australia.
Cheap Stocks to Buy: Nevada Gold & Casinos (UWN)
Nevada Gold & Casinos (UWN) has little to do with gold or Nevada, ironically.
However, it is in the business that you think of when you think of Las Vegas. Gambling.
But UWN’s locations are in South Dakota and Washington state. In South Dakota it runs slot machines in a number of casinos in Deadwood, one of the first jurisdictions in the U.S. to allow gaming. The nice thing about Deadwood is it’s very close to Mount Rushmore, which means there’s plenty of tourist traffic to this Black Hills town.
In Washington, UWN is the largest operator of mini-casinos; it has nine in the state and seven are located near Seattle. Each mini-casino has a large restaurant and more than 100 tables for cards and other forms of gaming.
Smaller operators are doing better in this space than their big Vegas competitors because they don’t rely on high rollers or foreign operations to bolster revenue.
Cheap Stocks to Buy: Genie Energy Ltd. (GNE)
Genie Energy Ltd. (GNE) is an energy distributor to the Midwest and Mid-Atlantic consumer and commercial markets.
Essentially, that means its the bulk of GNE is an energy exchange company that purchases electricity and natural gas from the commodities market and then distributes that energy in its service sectors.
The other piece of its business is an exploration and production company. It has a new operation in the shale fields in Colorado, but its most recent announcement is what helped ignite the stock: GNE has discovered oil in Israel — the Golan Heights to be exact.
While the Golan Heights are disputed territory with Syria, it’s unlikely Syria is in a position to put up much of a fight right now over drilling rights. And Israel may well see its own oil production as a way to move out of the energy markets that many of its adversaries in the Middle East control.
Bottom line: GNE is a solid company with an interesting growth kicker.
Cheap Stocks to Buy: Energy Focus Inc (EFOI)
Energy Focus Inc (EFOI) is a leading maker of LED tubular lighting. This is the kind of lighting that is used in virtually every building in the country; now they’re fluorescent, but the energy and cost savings are pushing building owners to look toward more energy efficient solutions, like LED.
And that’s where EFOI comes in. It has built tubular LED lighting in the same sizes to retrofit all those fluorescent tubes.
What’s more it has an entire division that specializes in LED lighting for maritime uses. And its products are certified by the U.S. Navy, so EFOI has a unique niche in military contracting world as well.
Bear in mind that ships only have the electricity they generate, they’re not hooked into the grid. Any energy savings is a very big deal to maritime operations.
EFOI stock has made quite a run in the past year, but there’s plenty more left to come. It’s also quickly becoming an attractive buyout target.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool,PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.