[Editor’s Note: “8 Cheap Stocks to Buy That Cost Less Than $10” was previously published in February 2019. It has since been 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 price tags of $1,765, $1,300 and $750 per share, respectively. 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. Cheap stocks, like those under $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?
The following 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: AMC Entertainment (AMC)
Projected 12-Month Upside: 60%
You might be surprised to see AMC Entertainment (NYSE:AMC) on this list of stocks to buy. Over the last five years it has dropped from highs near $35 to just under $10. And it’s not so surprising why.
I personally haven’t been to a movie theater in over a year — and why would I? Instead of spending $13 or $14 on an individual movie ticket, I could spend that same amount on a monthly subscription to a streaming service from Netflix (NASDAQ:NFLX), Disney (NYSE:DIS) or Apple. Many Americans feel the same. New movie releases, perhaps with the exception of Star Wars and Marvel franchise movies, don’t draw the same excitement they once did. Plus streaming services are offering their own original movies — and many are genuinely enjoyable.
But research shows that movie theaters, and traditional Hollywood releases, have a strong track record for surviving periods of volatility and economic downturn. During the Great Depression feel-good movies and musicals dominated Hollywood and Broadway. And during the 2008-2009 financial crisis, the movie industry saw an unprecedented box-office surge. The University of Southern California’s Martin Kaplan explained it simply. “It’s not rocket science,” Kaplan famously told The New York Times in 2009. “People want to forget their troubles, and they want to be with other people.”
And when people want to forget their troubles, going out with friends to the movies will provide more mental release than sitting alone watching Netflix content. A 12-month price target of $15.57 implies just over 60% upside for AMC stock. With talk of a looming global recession, AMC Entertainment stock offers some safety and a 8.7% dividend yield. AMC stock is an excellent cheap stock to buy.
Boingo Wireless (WIFI)
Projected 12-Month Upside: 75%
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 75% 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 — the stock is up 30% in the last month.
Plug Power (PLUG)
Projected 12-Month Upside: 30%
Unlike some names on this list, Plug Power (NASDAQ:PLUG) stock is actually up year-to-date, to the tune of 130%. But that’s not it for PLUG stock. It sits near $2.85 now, but analysts think it could shoot as high as $3.90 in the next year.
That’s still over 30% upside.
Plug Power produces and designs hydrogen fuel cell systems that replace conventional batteries. Essentially, whereas traditional batteries take several hours to recharge, PLUG systems recharge in just minutes. The company’s hydrogen fuel cells are used in forklifts — and attract customers like Nike (NYSE:NKE), Home Depot (NYSE:HD) and Walmart (NYSE:WMT).
In 2017, PLUG stock topped $3 — a key level of resistance — for the third time. In April of that year, Amazon (NASDAQ:AMZN) purchased over 50 million shares of Plug Power, agreeing to use its fuel-cell technology in its warehouses. It was a good month for PLUG.
Since then, Plug Power’s hit the $3 level once more since then. Analysts, however, believe it can exceed $3 again.
As InvestorPlace’s David Moadel uncovered, automobile manufacturers are jumping on the fuel-cell bandwagon. In a research study from the University of California, Berkeley’s Jonas Meckling and Johns Hopkins University’s Jonas Nahm, automakers are increasingly pursuing electric vehicles and fuel-cell technology.
As automakers increasingly become interested in this trend, Plug Power’s customer basis will continue to grow. And as that happens, PLUG stock should grow, too.
The Meet Group (MEET)
Projected 12-Month Upside: 25%
Once taboo, dating apps are now a thing of the mainstream. Heck, it’s not uncommon for couples to end up in long-term relationships — and even marriages — after a swipe or two on their favorite platform. Here’s where The Meet Group (NASDAQ:MEET) comes in. The company operates what it calls human connection applications under brands such as MeetMe, Lovoo, Skout, Tagged and Growlr.
With a share price just under $5, MEET stock is up 25% over the last 12 months. And analysts agree that the next 12 months are also rich with potential. The stock has a “strong buy” consensus rating and a 12-month price target of $6, implying another 25% of upside.
So why are analysts in love with this cheap stock? The answer is two-fold.
When the company reported earnings Nov. 7, things were looking up. Earnings of 13 cents per share beat consensus estimates, and revenue of $52.6 million was up from $45.7 million a year ago. This quarter’s earnings beat wasn’t a one-off, either. It marked the fourth-straight quarter of earnings beats for Meet Group stock.
The second part of this love story is The Meet Group’s cutting-edge dating technology. On Oct. 29, the company announced the release of a brand new livestreaming dating game. Inspired by TV dating shows, the game NextDate matches current users in a group and features a “Love-o-meter” to help with ranking “contestants.” If you see someone you like, you can select to be paired with him or her for a one-on-one livestreaming date.
This game, and online dating in general, play on major themes of technology that will thrive through the rest of 2019 and beyond. This means MEET stock should stay on any list of cheap stocks to buy for the foreseeable future.
Projected 12-Month Upside: 75%
As TipRanks’ Maya Sasson recently wrote, it’s clear that Iteris (NASDAQ:ITI) has the strong support of the analyst community. Although it is far from September 2019 highs, ITI stock is still up over 26% for the year. Plus it boasts a 12-month price target of $8, implying over 75% upside potential.
The company uses sensors to collect data for farms, roads and highways. In its own words, Iteris turns “big data into big breakthrough solutions.” One branch of the company focuses on selling traffic signal controllers. Another focuses on designing, developing and implementing equipment that reports real-time traffic conditions. A third branch focuses on roadway maintenance solutions in response to weather and climate changes.
What’s key here? Data. Data is at the heart of all Iteris does. And this data-rich company is attracting the attention of major partners. Colorado’s Department of Transportation is working with ITI to collect and use weather data to determine road maintenance solutions. That’s in addition to partnerships with similar departments in South Carolina, Illinois and Florida.
Another recent headline looks likely to contribute to ITI stock’s future growth. Cisco (NASDAQ:CSCO) has chosen Iteris as a partner — allowing the smaller company to use Cisco’s products alongside its own. According to representatives of both Cisco and Iteris, the deal will boost safety conditions on local roads, benefiting state and municipal governments that Iteris services.
With this news in mind, Iteris looks like a great stock to buy, as more partnerships are likely in its future.
Angi Homeservices (ANGI)
Projected 12-Month Upside: 58%
Shares of Angi Homeservices (NASDAQ:ANGI) stock began trading in October 2017, following a 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 — and Amazon (NASDAQ:AMZN) — is disrupting everything, it’s still important to note that the trend weighed on the home services market. But now, it looks like Angi’s Homeservices is ready to make a comeback.
A quick trip to the Angie’s List website can match you with air duct cleaning, floor repairs 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. But when the company reported earnings Nov. 7, shares climbed 21.5%. Reflecting on the third quarter, CEO Brandon Ridenour also said that Angi’s Homeservices was once again on the path to growth.
So what’s behind this resurgence?
It seems like consumers and businesses are embracing the online business model, allowing for future growth. Some estimate that this home-improvement services market is worth as much as $400 billion — and the global market for home services “is expected to grow by a compound annual growth rate of 52% through 2022.”
So, as more people hop to their phones to find a service provider, Angi’s Homeservices and ANGI stock will continue this turnaround. With a share price just under $8 and a 12-month price target of $12.08, the future looks bright.
Projected 12-Month Upside: 70%
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%.
This last year hasn’t been much prettier, bringing a 30% share-price decline. But things might finally be looking up. Year-to-date, VG shares are only down 7%. 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 buzzy phrase — 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 $14.19 12-month price target, implying more than 70% upside.
Glu Mobile (GLUU)
Projected 12-Month Upside: 30%
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 30% 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 $7.29, there’s certainly some winning ahead.
Ovid Therapeutics (OVID)
Projected 12-Month Upside: 440%
It would be almost impossible to talk about promising cheap stocks to buy without mentioning at least one biotech name. That’s because these high-risk, high-reward companies perfectly underline both the pros and cons of this type of investing. Just as a biotech company could bring in 100%-plus returns, it could crash and burn with negative trial results.
But looking at cheap biotech stocks, Ovid Therapeutics (NASDAQ:OVID) looks to be a strong buy for a reason. Highlighting its “Bold Medicine” approach that focuses on transforming the lives of its patients, Ovid seems to take a more moralistic approach to biopharma. The company specializes in developing treatments for rare neurological disorders, and has a robust pipeline with four candidates.
In its third-quarter earnings report, the company had positive updates on OV935, which is in co-development with Takeda Pharmaceutical (NYSE:TAK). According to Ovid’s management, in a current trial, the therapy has been found to reduce seizure frequency in the difficult-to-treat patient population.
While none of the company’s drugs are on the market yet, clinical trial results are worthy of optimism. As long as these trials continue to go well, Ovid Therapeutics should be safely on its way to reach its $14 price target. That 12-month price target implies over 440% upside from its current share price near $2.50.
Target Hospitality (TH)
Projected 12-Month Upside: 100%
With a market capitalization just over $560 million, Target Hospitality (NASDAQ:TH) may be unfamiliar to many investors. But analysts are confident in the company’s future success, setting a 12-month price target $11.33, over 100% higher from the stock’s current price of $5.28.
Target Hospitality is just that, a targeted hospitality company focusing on servicing those in the energy and government sectors. It builds, owns and operates customized housing communities that offer residents everything from catering to concierge services and recreational facilities. Currently, TH maintains 19 communities in the Permian Basin.
So what exactly makes the company behind these specialized communities so interesting? Forbes’ senior energy contributor Robert Rapier makes the case that the Permian Basin could one day be the world’s most important and productive oil field. Right now, most would credit Saudi Arabia’s Ghawar oil field with that title, but Rapier thinks things are changing. By the end of 2018, the Permian Basin had increased production by 3 million barrels a day.
As the global importance of the Permian Basin area rises, more workers will head to the region. And those workers will need a place to stay. It’s easy to imagine that Target Hospitality’s specialized — and somewhat luxurious — offerings would win those workers over. With that in mind, investors might just strike oil if they choose to invest in TH stock.
Sarah Smith is a Web Editor with InvestorPlace.com. As of this writing, she did not hold any of the aforementioned securities.