3 Cheap Stocks to Buy Under $5 in August 2023


  • These are the stocks to buy under $5 that can breakout on the upside relatively soon.
  • Hecla Mining (HL): Strong silver production growth guidance will translate into healthy cash flow upside.
  • Curaleaf Holdings (CURLF): Building a presence in the U.S. and focusing on R&D is likely to deliver results in the form of robust growth.
  • Diana Shipping (DSX): Massively undervalued stock in the dry bulk shipping sector with a robust dividend yield of 21.1%.
stocks to buy under $5 - 3 Cheap Stocks to Buy Under $5 in August 2023

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For high-risk-taking investors, there is no dearth of exciting opportunities in the market. Currently, there are several stocks to buy under $5 that promise healthy returns in the coming quarters. Without a doubt, I would limit my exposure to penny stocks at 10% to 15% of the total portfolio. However, this allocation can be a portfolio catalyst if a few stocks fire and deliver 5x to 10x returns.

It’s worth noting that the U.S. credit rating has been downgraded by Fitch to AA+. This has caused some jitters in the market. I see this as an opportunity to buy undervalued penny stocks. As always, my focus is on fundamentally strong stocks than purely speculative names.

I am of the view that these stocks to buy under $5 can deliver 100% returns within the next 12 months. Of course, I would not mind holding these stocks for longer. Let’s discuss the reasons to be bullish.

Hecla Mining (HL)

Mining cart in a silver, copper, and gold mine representing VOXR Stock.
Source: TTstudio / Shutterstock

Hecla Mining (NYSE:HL) stock trades just above $5 and it is worth talking about. The stock of the largest silver miner in the United States has remained sideways for year-to-date. However, considering the production growth guidance, a big rally is impending. HL stock also offers a dividend yield of 0.45% and I believe that it’s among the attractive dividend growth stocks to consider.

Last year, Hecla reported 10% year-on-year growth in silver production. The company has guided growth of 18% in 2023. It’s further expected that production growth will accelerate to 35% by 2025. Once there is a meaningful rally in precious metals, HL stock is likely to surge.

I am bullish on precious metals considering the point that rate hikes are largely done with. The dollar is likely to weaken on a relative basis and this will be positive for gold and silver. Coming back to Hecla, the company reported a liquidity buffer of $335 million as of Q1 2023. The company has ample financial flexibility to pursue aggressive growth.

Curaleaf Holdings (CURLF)

Cannabis Terpene bottle with cannabis leaves and lemon and orange slices on a wooden backdrop
Source: Creativan / Shutterstock

Curaleaf Holdings (OTCMKTS:CURLF) is another name among stocks to buy under $5. The cannabis company stock has trended higher by 14% in the last month. I believe that the correction is over and CURLF stock is poised to remain in an uptrend.

One reason to be bullish is the point that the company is present in 19 states in the U.S. As more states allow cannabis for recreational use, the market outlook is promising. Curaleaf has also established a presence in eight European countries. It’s not surprising that the company has been delivering steady growth along with a healthy EBITDA margin.

I believe that the company’s growth will remain robust considering the investments in research and development. Last year, 171 new products were launched and contributed to revenue growth. It’s worth noting that the company has a strong balance sheet and that provides flexibility to make aggressive investments.

Diana Shipping (DSX)

Container ships now carry about 90 of the world's cargo and the largest container ships can carry over 21,000 units. This one is operated by ZIM Integrated Shipping Services (ZIM stock)
Source: Darryl Brooks / Shutterstock.com

Diana Shipping (NYSE:DSX) stock has been sideways for year-to-date. I believe that this is a golden accumulation opportunity with the stock trading at an attractive forward price-earnings ratio of 10.2. DSX stock also offers a robust dividend yield of 21.1%. A breakout on the upside seems imminent in the coming months.

As an overview, Diana Shipping is involved in dry bulk shipping. As of Q2 2023, the company had 42 operational vessels with an average fleet utilization of 99.6%.

It’s worth noting that for Q2, the company reported a time charter equivalent rate of $17,311 per vessel per day. For the same period, the daily vessel operating expense was $6,057. With an attractive break even, the company’s cash flows are likely to remain strong. This will ensure dividends sustain at current levels.

Diana Shipping reported total debt of $671.9 million as of Q2 2023. However, I don’t see this level of debt as a concern as debt servicing metrics are healthy. The sideways movement in DSX stock is therefore a good accumulation opportunity.

On the date of publication, Faisal Humayun did not hold (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.

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