While many of us would love to invest like Warren Buffett or Charlie Munger, very few people have the capital resources to do so. And unfortunately, cheap stocks sometimes get left out of the mix when social-media and television pundits make recommendations.
That’s a shame because investors of all account sizes can profit from the moves made by lower-priced stocks. These moves can be swift, so it’s important to exercise caution at all times. Consider using small position sizes and stop-loss orders to limit downside.
Perhaps most important of all, be sure to stick to high-quality companies. The five that we’ll be featuring today are:
- Nokia (NYSE:NOK)
- Nio (NYSE:NIO)
- Esports Entertainment Group (NASDAQ:GMBL)
- U.S. Energy (NASDAQ:USEG)
- U.S. Auto Parts Network (NASDAQ:PRTS)
You’re invited to add these five cheap stocks to your watch list and see for yourself if smaller prices can lead to bigger gains.
Can a low-priced stock offer big dividends? You bet! NOK stock rewards income-seeking investors with a generous annual forward dividend yield of 6.28%.
This stock offers a stake in a tech firm with a rich history, as Nokia was founded in 1865. But just because it’s an older company doesn’t mean it’s not ultra-modern. From smartphones to Wi-Fi to network planning and optimization, Nokia connects businesses and individuals across multiple continents.
Best of all, Nokia was an early and strong player in the shift towards 5G connectivity technology. All in all, Nokia is a world-famous name and the stock, incredibly enough, remains easily affordable.
What’s a simple and cost-efficient way to take a position in electric vehicles? Look to Chinese automotive manufacturer Nio for the answer, as its shares are much cheaper than those offered by competitor Tesla (NASDAQ:TSLA).
NIO stock wasn’t always cheaply priced below $10. Regulatory challenges and a period of low automobile sales caused some price depreciation. However there could be a comeback story in the making for NIO stock.
The company recently announced that it received $1 billion in new financing. Plus, Nio delivered 3,155 vehicles in April.
That’s more than double the sales volume during April 2019. So, it might not be long before NIO stock is back above the $10 mark.
Esports Entertainment Group (GMBL)
Esports Entertainment Group an online gambling company based in Canada with a focus on sports betting. While many have never considered investing in e-sports betting, make no mistake: this is serious business.
The proof is in the share price, as GMBL stock went all the way up to $14.70 Oct. 2019. Could it get there again? It’s certainly a possibility as Esports Entertainment Group is expanding.
Specifically, the company just signed a letter of intent to acquire Argyll Entertainment, a sports book and casino operator that generates around $12 million in annual revenues.
Now you have another chance to wager on a premier e-sports betting company. At less than $10 per share, the odds certainly seem to be on your side.
U.S. Energy (USEG)
Texas-headquartered U.S. Energy specializes in acquiring American oil and gas projects. USEG stock isn’t exactly a proxy for the energy sector, but historically, it has tracked the sector’s performance fairly closely.
Don’t let the cheap stock price fool you. This company is massively productive. In fact, last year U.S. Energy produced an average of 397 barrels of oil equivalent per day.
Moreover, U.S. Energy’s oil and gas revenues for 2019 totaled an impressive $6.6 million. Don’t sleep on USEG stock, as a rebound in the energy sector could quickly enrich shareholders.
U.S. Auto Parts Network (PRTS)
When people and businesses need automotive parts, it’s often a necessity, not a luxury. That’s why PRTS stock could be a relatively safe bet even as the economy sours in response to the novel coronavirus.
Perhaps you want to see some numbers to back that thesis up. If so, then try this on for size. U.S. Auto Parts Network raked in a gross profit of $21.2 million during the fourth quarter of 2019. That’s a 28% increase over the comparable quarter of 2018.
Additionally, in that same quarter the company’s private-label sales increased by 15%. At less than $10 per share, PRTS stock represents a position in a revenue-generating company situated in a niche that won’t disappear anytime soon.
As of this writing, David Moadel did not hold a position in any of the aforementioned securities.