The 7 Best Cheap Stocks Under $10 to Buy Now

  • Oversold and undervalued, each of these seven cheap stocks under $10 to buy stands to make a return to double-digit prices.
  • Accel Entertainment (ACEL): The market may be too pessimistic about this slot route operator's growth prospects.
  • Century Casinos (CNTY): Shares in this casino operator could make a comeback once recent acquisitions start to pay off.
  • Chicken Soup for the Soul Entertainment (CSSE): Although not 'cheap' based on current metrics, this streaming play may be in for a big jump in profitability.
  • Entravision Communications (EVC): This low-priced broadcasting and digital ad stock stands to see a re-rating, once industry headwinds clear up.
  • Geo Group (GEO): As the private prison operator's restructuring efforts, this deep value favorite of Michael Burry's could keep bouncing back.
  • Hanesbrands (HBI): An extremely cheap stock, when you consider the resilient nature of this apparel company's core business.
  • Lumen Technologies (LUMN): Lumen's recent asset sale paves the way for debt reduction, and a modernization of its business.
best cheap stocks under $10 - The 7 Best Cheap Stocks Under $10 to Buy Now

Source: Shutterstock

Instead of chasing speculative growth plays, you may want to consider cheap stocks under $10 per share instead.

As hopes rise that the Federal Reserve will soon ease on interest rate hikes, some think it’s safe to dive back into growth stocks.

However, with inflation still high, it’s not for certain that the Fed is ready to quickly revert back to a more dovish fiscal policy. More volatility may lie ahead for the markets.

Yes, it’s not only been pricey growth stocks that have rallied lately. Value stocks have also bounced back recently, and could pull back as well if overall market sentiment turns negative again.

Yet in contrast to popular growth names, which still have substantial downside risk if the Fed keeps raising rates, there are plenty of value stocks that, due to already trading at rock-bottom earnings multiples, have likely found a floor.

More important than the potential for limited downside, many cheap stocks under $10 per share have the potential to make outsized moves higher once a recovery eventually arrives.

Consider adding them to your portfolio, as each one currently trades at a very favorable valuation.

ACEL Accel Entertainment $8.52
CNTY Century Casinos $6.95
CSSE Chicken Soup for the Soul Entertainment $6.65
EVC Entravision Communications $4.22
GEO Geo Group $8.61
HBI Hanesbrands $7.82
LUMN Lumen Technologies $7.28

Accel Entertainment (ACEL)

A photo of 2 red dice rolling on a black mirrored background.
Source: 7th Sun / Shutterstock.com

Accel Entertainment (NYSE:ACEL) installs and operates slot machines in bars, truck stops and other non-casino locations.

Holding a large share of mature slot route markets like Nevada, Accel has also excelled at capturing a large share of newly-opened slot route markets, such as in Illinois and Pennsylvania.

This has made the company America’s largest gaming terminal operator. Growth deceleration, plus recession worries, have pushed ACEL stock to rock bottom prices. At today’s prices, shares trade for only 9 times estimated earnings for 2022.

Long-term analyst forecasts may call for minimal earnings growth in the coming years. Consensus forecasts for earnings per share (or EPS) are around 90 cents for this year, next year, and 2024.

However, Accel’s move into areas like skill gaming could help the company re-accelerate earnings growth, which in turn could help the stock move back up to a higher valuation.

Century Casinos (CNTY)

webpage of century casinos (CNTY), stocks under $20
Source: Pavel Kapysh / Shutterstock.com

ACEL isn’t the only gambling stock that’s fallen to dirt cheap prices. Shares in regional casino operator Century Casinos (NASDAQ:CNTY) also currently trade at a low valuation (12.8 times earnings).

There may be a path for CNTY stock to make a return to its past all-time high, which is more than double what it trades for today. Focused on making accretive acquisitions, Century has two deals that could further increase EPS, sending the stock higher.

First, is its pending purchase of the Nugget Casino near Reno, Nevada. Previously, I’ve argued Century bought this property at a good price.

Second, the company’s deal for the operating business of the Rocky Gap Casino Resort in Western Maryland. As discussed in a recent investor presentation, Century sees big upside from buying this property, largely due to Maryland only now rolling out legal sports betting.

Chicken Soup for the Soul Entertainment (CSSE)

A close-up shot of a hand holding a TV remote with a blurred screen in the background.
Source: Shutterstock

On a stock screener, Chicken Soup for the Soul Entertainment (NASDAQ:CSSE) doesn’t look like a value stock.

The company, which operates streaming platforms like Crackle, currently operates at a loss. However, digging deeper into the details, it’s easy to make the argument that this is one of the best cheap stocks under $10 per share to buy right now.

As a Barron’s commentator discussed in September, Chicken Soup’s CEO, William Rouhana, anticipates being able to use the cash flow from its recently-purchased Redbox DVD kiosk unit to grow the company’s ad-supported streaming business.

Redbox’s business is in decline but is expected to become cash-flow positive, as the number of new DVD releases has bounced back post-pandemic.

If Chicken Soup’s gambit pays off, 2023 EPS could hit the high end of analyst estimates ($1.27), which would certainly be enough to send CSSE stock back to double-digit prices.

Entravision Communications (EVC)

Radio microphone in a soundproofed room with an "on air" sign in the background.
Source: radioshoot/ShutterStock.com

Entravision Communications (NYSE:EVC) is a cheap stock (trading for 11.2 times earnings) for two reasons.

First, much of the market remains unaware that this company has moved beyond its legacy business (Spanish language TV and radio broadcasting) and is now primarily a digital advertising firm. As Entravision pointed out in a recent investor presentation, this segment now makes up 78% of its revenue.

Second, ad demand has softened. This may be making investors, including investors aware of Entravision’s new digital focus, pessimistic about future results. However, the current perception of EVC stock could change.

Wall Street could finally take notice that Entravision is a digital ad firm that happens to own TV and radio stations and not the other way around. Ad industry headwinds will also in time clear up, and Entravision’s digital ad business stands to keep growing. Both factors could drive a recovery for the stock.

Geo Group (GEO)

Operated by the for-profit prison company The GEO Group. GEO stock.
Source: JosephRouse / Shutterstock

In August, Geo Group (NYSE:GEO) shares received a flurry of attention but not for anything directly related to the private prison operator’s business.

As InvestorPlace’s Eddie Pan reported at the time, what sparked this attention was news that this stock was the sole holding of contrarian investor Michael Burry reported on the latest 13F disclosure filed by his firm, Scion Asset Management.

Upon becoming aware of this, investors decided to ride Burry’s coattails. Yet while GEO stock is up more than 20% on this news, it’s not too late to wager on this cheap (trading for just 6.1 times earnings) contrarian play.

As I’ve argued before, Geo Group is generating more than enough cash to adapt to changes in the U.S. federal government’s use of private prisons, namely through de-leveraging its balance sheet. This, plus returning cash back to shareholders through buybacks, could send GEO stock even higher.

Hanesbrands (HBI)

HanesBrands (HBI) logo on a storefront during daylight
Source: Helen89 / Shutterstock.com

If you’re looking for a more recession-resistant play among the cheap stocks under $10 per share, consider Hanesbrands (NYSE:HBI).

At first glance, you may assume the market is right to give this stock such a super-low valuation (6.6 times earnings). The apparel maker has reported disappointing numbers in recent quarters, due to macro headwinds.

However, Hanesbrands could prove to be more resilient during challenging economic times than the market currently assumes. As a Seeking Alpha commentator recently argued, Hanesbrands’ innerwear segment (socks and underwear) has historically performed well during downturns, such as the late-2000s Great Financial Crisis.

Once the economy improves, and/or investors realize they’ve priced too much pessimism into HBI stock, shares could make a big recovery. While you wait for a rebound, this stock will provide steady returns, via its high dividend. HBI stock currently has a forward dividend yield of 7.9%.

Lumen Technologies (LUMN)

A magnifying glass zooms in on the website for Lumen Technologies (LUMN).
Source: Postmodern Studio / Shutterstock.com

Telecom company Lumen Technologies (NYSE:LUMN) suffers from a reputation as a value trap and possible dividend trap.

Investors have been attracted by its low valuation (5.2 times earnings) and high dividend yield (12.45%), but the stock has tanked on concerns Lumen’s new CEO (Kate Johnson) will slash its high payout.

A dividend cut for LUMN stock seems likely (given next year’s expected earnings drop), yet there may be something in play that more than makes up for it. That would be the continued turnaround of Lumen’s business. The company just closed on the sale of one of its main legacy assets.

Lumen can put the proceeds from this sale to work paying down its high debt position. It can also use the cash to grow its Quantum Fiber business. Both moves could help drive share price appreciation that outweighs the impact of a reduced dividend.

On the date of publication, Thomas Niel held a long position in GEO and LUMN. He did not have (either directly or indirectly) any positions in any other securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.


Article printed from InvestorPlace Media, https://investorplace.com/best-cheap-stocks-under-10-dollars/.

©2022 InvestorPlace Media, LLC