While banking on the most established investments likely makes the most sense, for those that want to dial up their risk-reward profile, the following best stocks to buy under $7 offer plenty of intrigue. Generally, lower-priced securities tend to psychologically appeal to the masses, thereby possibly generating wider interest.
Of course, you don’t want to just acquire investments based on their share price. Therefore, I took advantage of Gurufocus.com’s screener, extracting out some of the most compelling and relatively underappreciated names in the equities market. While they may be “cheap,” these best stocks to buy under $7 offer much potential for smart bargain hunters.
|APT||Alpha Pro Tech||$4.14|
Viemed Healthcare (VMD)
Based in Louisiana, Viemed Healthcare (NASDAQ:VMD) specializes in in-home therapy. Specifically, the company bills itself as one of the leaders in home-based respiratory care and disease management. Currently, Viemed carries a market capitalization of $255.8 million. As of the close of the Nov. 10 session, the market prices VMD at $6.82 a share.
On a year-to-date basis, VMD represents one of the quiet winners, gaining a contextually blistering 25.4%. In contrast, the benchmark S&P 500 is down 17.5% during the same period. Fundamentally, Viemed may benefit from demographic realities. According to the Pew Research Center, the pace of baby boomers’ retiring accelerated during the post-pandemic new normal. Logically, this dynamic might expand the total addressable market for in-home therapy specialists.
Financially, Viemed should attract attention among contrarians for its strong balance sheet. Most notably, the company’s Altman Z-Score is 8.7, reflecting a very low risk of bankruptcy over the next two years. Therefore, it’s well worth considering for the best stocks to buy under $7.
Crown Crafts (CRWS)
Also operating out of Louisiana, Crown Crafts (NASDAQ:CRWS) designs, markets and distributes infant, toddler, and juvenile consumer products. Presently, the company commands a market cap of $59.6 million, making it one of the smaller ideas among the best stocks to buy under $7. Since the Nov. 10 close, CRWS featured a per-share price tag of $5.79.
From the Jan. opener, CRWS gave up nearly 21% of equity value. However, nearer-term data indicates that the volatility may be slowing, with shares almost at parity over the trailing-month period. Fundamentally, Crown Crafts may benefit from the work-from-home pivot as households can transfer the savings associated with not commuting to the office to various consumer products.
To be fair, the aforementioned narrative may be on a short lifecycle if employers recall their workers. In the meantime, investors can bank on the company’s solid financials, including balance sheet stability and strong profit margins. Also, CRWS is undervalued, priced at 6.8 times trailing-12-month earnings, below the industry median of 14.8 times. Thus, it’s worth considering for best stocks to buy under $7.
An Indian multinational corporation, Wipro (NYSE:WIT) provides information technology, consulting, and business process services. Per its public profile, the company’s capabilities cover cloud computing, cyber security, digital transformation, artificial intelligence, robotics, data analytics, and other technology consulting services. Currently, Wipro features a market cap of $27.6billion.
Since the start of this year, WIT dropped 49% of its equity value, perhaps attracting the more extreme contrarian. Over the trailing five days, shares moved up over 7%, possibly reflecting burgeoning upside momentum. At the time of writing, WIT trades hands for $4.97. Fundamentally, Wipro entices because of its exposure to India’s tech market. Notably, India’s IT market contributes a little over 9% to its national GDP.
Financially, Wipro delivers the goods in myriad ways. Perhaps most conspicuously, the company features excellent profitability metrics, ranking among the sector’s elite. As well, WIT’s undervalued, priced at 18.7-times trailing earnings compared to the industry’s median of 24.9 times. Thus, it’s worth additional investigation regarding the best stocks to buy under $7.
Surge Components (SPRS)
Headquartered in Deer Park, New York, Surge Components (OTCMKTS:SPRS) is a world-class supplier of capacitors and discrete semiconductors. Per its website, the company’s current product portfolio includes aluminum electrolytic capacitors, film capacitors, MLCC [multilayer ceramic capacitors], discrete semiconductors, and switches. Currently, Surge Components features a market cap of $17.7million.
To be fair, Surge presents risks based on its nano-cap profile. Also, the company’s stock trades over the counter, which may present liquidity concerns among other administrative challenges. At the time of writing, SPRS trades hands at $3.17. Shares slipped almost 17% YTD. Despite obvious obstacles, SPRS could make a case for the best stocks to buy under $7 due to its infrastructural relevance. Thanks to the Biden administration’s various initiatives to boost American infrastructure and technology, Surge may enjoy a demand upswing.
Financially, one of Surge’s strong points centers on its balance sheet. Its cash-to-debt ratio stands at nearly 5 times, much higher than the industry median of 1.3 times. Therefore, astute investors should consider SPRS as a candidate for best stocks to buy under $7.
Headquartered in Vancouver, British Columbia, B2Gold (NYSEAMERICAN:BTG) is a Canadian mining company that owns and operates gold mines in Mali, Namibia and the Philippines. Shares trade hands for $3.53 a pop. Currently, the company’s market cap stands at 5.08 billion CAD (roughly translating to $3.82 billion). Since the start of this year, BTG dropped 8% of equity value, a rather “positive” development.
Throughout this year, the Federal Reserve expressed deep concerns about skyrocketing inflation. Therefore, by making good on its promise to spike the benchmark interest rate, this ecosystem doesn’t exactly favor commodities. However, the recent lighter-than-expected inflation data suggests that at some point, the Fed will start easing up on its tightening. This should significantly boost BTG and other precious metals-related best stocks to buy under $7.
Financially, B2Gold benefits from excellent profitability margins, among other attributes. For instance, its net margin stands at 13.7%, beating out 72.5% of the competition. As well, it enjoys a stable balance sheet, making it one of the best stocks to buy under $7.
A Brazilian brewing company, Ambev (NYSE:ABEV) translates to “Beverage Company of the Americas.” Per its public profile, Ambev was created with the merger of two breweries, Brahma and Antarctica. Currently, Ambev commands a market cap of nearly $47 billion. At the moment, the market prices ABEV at $2.93 a share. Since the start of the year, ABEV gained almost 8% of equity value.
Fundamentally, Ambev may benefit from its potentially economically resilient business. According to TipRanks, “during a recession, consumers are likely to increase alcohol consumption at home, while companies in the space retain fantastic pricing power during such periods.” As well, it’s possible that economic hardships can spark increases in imbibing, if only to take the edge off.
Financially, data from Gurufocus.com reveals that Ambev enjoys a stable balance sheet. Primarily, the company features a cash-to-debt ratio of 5.6 times, beating out nearly 72% of the competition. Also, its Altman Z-Score is 4.17, reflecting low bankruptcy risk. Therefore, if you don’t mind some controversy, ABEV ranks among the best stocks to buy under $7.
Alpha Pro Tech (APT)
Based in Canada, Alpha Pro Tech (NYSEAMERICAN:APT) manufactures a line of weatherization products to work in conjunction with each other. Because of the coronavirus pandemic, Alpha Pro Tech also generated earlier popularity for its masks and face shields. As of this writing, the company commands a market cap of $51.75 million. The market prices APT at $4.09 a share.
Since the beginning of the year, APT dropped 32.5% of equity value. In the near term, it’s picking up slight momentum, with shares gaining over 1% in the trailing month. Of course, that’s nothing to write home about. While relevant during the worst of the Covid-19 crisis, Alpha Pro suffers from a relevancy cloud. That said, Covid still poses challenges for the healthcare infrastructure. Therefore, APT might see demand increases from institutions or the immunocompromised.
Even if you don’t like the fundamental narrative, the financial framework provides some talking points. For instance, Alpha Pro features profit margins that rank among the upper half of the underlying industry. Also, it features a stable balance sheet with a strong cash position relative to its debt.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.