It’s always hard to talk about low-priced equities. They’re not “cheap” stocks in the sense that they necessarily have low valuations. Nor are they for “cheap” people who simply want to buy stocks that have low share prices.
These are low-priced stocks that have great risk-to-reward ratios, which makes them bargains. They’re small enough to grow in even slow economic times because they’re in expanding sectors or they have a unique product that customers want.
These seven cheap stocks also make the grade in the sense that they’re all A-rated. Some have been on a tear for months now while others have just broken out in the last quarter. Either way, they’re well worth adding to your portfolio while they’re still “cheap.”
Bear in mind, these stocks don’t have massive market caps, so they will be volatile. But if you have patience, you will be well rewarded.
Cheap Stocks to Buy: Pro-Dex Inc (PDEX)
Stock Price: ~$3.50
Pro-Dex (PDEX) is a cutting edge manufacturer. It’s motto is, “If it can be built, we can build it, and build it right the first time.”
And the company has been doing just that for the past 37 years.
PDEX operates in the medical device and instruments space, as well as industrial, security and aerospace sectors. That means it designs, builds and sells everything from micro-air motors to medical devices to torque wrenches.
It’s very strong in the dental and healthcare space. This is a good thing because this sector is encouraging companies with useful products to be rewarded.
The stock was recently discovered by healthcare sector investors — it’s up 45% in the past three months — but it’s still too small for hedge funds and institutions to buy in. That won’t last.
Cheap Stocks to Buy: MeetMe Inc (MEET)
Stock Price: ~$3.30
MeetMe (MEET) is growing into the social media space as a mobile-driven online meeting place for not only friends, but strangers.
The app is available for iPhones, Windows phones and Androids, in a dozen languages. It also has advanced advertising and virtual currency features as well.
Millenials lives orbit their phones. And with Facebook Inc (FB) attracting an older demographic, new apps are rising and falling as they compete for traction with millennials. MEET is one of those companies.
And it seems to be doing a pretty good job of it. A few days ago it just busted through the 1 million daily active users mark.
MEET is up 100% in the past year, so there are some enthusiastic backers. For good reason. Its most recent earnings show the company has slayed earnings and revenue expectations yet again. Revenue was up 42% compared to last year.
Cheap Stocks to Buy: Intermolecular Inc (IMI)
Stock Price: ~$2.00
Intermolecular (IMI) is an advanced materials testing and development company. Basically that means it helps tech firms develop new processes and materials for semiconductors and other tech components.
With the boom in smart devices, there’s a growing demand for embedding chips and chip sets in any manner of devices. And now that volume has grown, firms are looking for cheap, safe, sturdy materials to build to that demand.
As we enter the age of the Internet of Things, where our cars talk to the garage and our refrigerators talk to our toasters and thermostats, a growing list of companies are figuring out how to grab some of the growing market share.
They turn to IMI.
Even after Friday’s 13% rout, IMI stock is still up 14% in the past year. Despite the selloff, its first-quarter numbers were stellar, especially in a broadly weak tech market. This stock has plenty of headroom.
Cheap Stocks to Buy: Harmony Gold Mining Co. (ADR) (HMY)
Stock Price: ~$3.70
Harmony Gold Mining (HMY) even surprised me when it ended up on the list.
Although, with the strong, steady uptrend in gold prices in 2016, it shouldn’t be that surprising.
Many investors have shied away from precious metals miners because the global economy has seen commodity prices crater and growth stagnate. And there’s always a healthy skepticism about gold miners.
But it’s precisely because of these economic conditions that make gold such a popular investment now. The markets hate uncertainty and there are few times when markets have been this uncertain. Gold remains the most popular store of value when times get crazy, especially in India and China.
To prove that point: HMY is up 444% in the past six months. And as long as gold trends higher, HMY will be leveraged to that growth.
Cheap Stocks to Buy: Planet Payment Inc (PLPM)
Planet Payment (PLPM) is one of those companies that wouldn’t be around if we didn’t have the internet.
It’s a fintech company that specializes in payment processing. “Fintech” means “financial technology.” While payment processing is a means for allowing quick and secure customers payments online.
Many times, PLPM products are the payment portals you use to pay bills, buy flowers or book a vacation. PLPM is operating in 21 countries with 118,000 merchant and over 70 financial institutions.
Traditional financial institutions have been very slow adapting to the online marketplace and small, agile fintech companies like PLPM have stepped in.
The company just reported another solid quarter and continues to grow its markets quarter after quarter. The stock is up 100% in the past year, but has lots of headroom, especially if it becomes an acquisition target by a larger competitor.
Cheap Stocks to Buy: Exfo Inc (EXFO)
Stock Price: ~$3.90
Exfo (EXFO) is well enveloped in the telecom revolution.
It essentially builds unique niche equipment that allows telecoms to deliver everything from phone service to online gaming to video conference calls, efficiently and reliably.
It’s a “five nines” company, meaning it helps keep the systems up and running 99.999% of the time. Unless you are in the industry, you will likely never come across this firm’s products in your day-to-day life.
However, your day-to-day life wouldn’t be possible without its products. More than 90% of the world’s top 100 communications service providers use EXFO equipment.
The stock is up 40% year to date, which is opposite the movement of most of the market in 2016. Telecom is going to be a key sector for decades to come and EXFO has already made a name for itself.
Cheap Stocks to Buy: Enzo Biochem, Inc. (ENZ)
Enzo Biochem (ENZ) is on the cutting-edge of genetic work in the biotech sector.
Identifying and manipulating genes is one of the new medical frontiers. Genes are the body’s building blocks and if you can find where healthy genes and unhealthy genes diverge, you can start to understand where diseases and pathogens may begin.
ENZ is the biotech world’s go-to provider of non-radioactive gene labeling. A number of the therapies it has worked on are in trials for viral and immunological pathologies.
This field will continue to expand, which is obviously good news for ENZ. But because of growing demand for this kind of work, ENZ is also becoming a very attractive acquisition for a Big Pharma firm or biotech group.
The stock is up 100% in the past 12 months, but it has plenty of upside still left.
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.