In general, the less expensive a stock is, the more risk it poses. That’s the case for the seven stocks under $20 to buy and hold forever that are listed below. Although these names are volatile, there are simply a lot of strong companies on this list. And there are a lot of reasons to take risks on good companies trading at low prices. Simply put, their potential gains are significant, and investors can generate high profits on them.
Several of these stocks have already overcome significant hurdles, yet they remain priced below $20, making them accessible to almost any investor. Over the long term, small investments can generate impressive returns.
The markets will probably experience further turbulence in 2023, but investing in strong companies is always a good idea.
I have lauded Fisker (NYSE:FSR) stock multiple times over the past months. I will continue to be bullish on FSR because the company has emerged as one of the rare strong companies that merged with a SPAC.
Production recently began on its all-electric Ocean SUV. Investors should understand that this was a significant achievement given its competitors and their less-than-sterling records. And Fisker’s customers are very likely to have a great vehicle on their hands.
That makes FSR stock highly compelling at a price of around $7.50.
Production of the Ocean model started on Nov. 17, 2022, after a quick path to market that was enabled by the company’s decision to outsource the production of the Ocean. Fisker’s decision to forgo investing in manufacturing looks to have been a wise one, as many other EV startups, including Nikola (NASDAQ:NKLA), are in danger of collapsing.
Fisker hired Magna International (NYSE:MGA) to manufacture the Ocean. But Fisker owns the intellectual property for the vehicle and should have a strong 2023 as its sold-out inventory will be delivered.
Magna’s pedigree should ensure that the Ocean will suffer fewer issues than many other new EVs, making Fisker very interesting for some time to come.
CompX (NYSEAMERICAN:CIX) is the kind of unsexy company that investors often disregard: It manufactures and sells a variety of physical locks and lock components used by many types of companies. But investors should really take a deeper look at the firm because CIX stock has a great deal of value.
Josh Enomoto, another InvestorPlace columnist, highlighted CompX in a recent article about cheap shares. He noted that one compelling argument in favor of CIX is that the company has no debt. Enomoto is correct when he notes that CompX has an advantage because of its pristine balance sheet as interest rates rise.
I’d also note that CompX boasts strong fundamentals overall. Its growing top and bottom lines make it attractive. Through the first nine months of 2022, its revenues increased to $126.6 million from $106.7 million during the same period a year earlier.
At the same time, its net income increased from $13.4 million to $16.1 million. The dividend of CIX stock yields 5.5% and hasn’t been reduced since 2014.
South Korean e-commerce giant Coupang (NASDAQ:CPNG) and its stock are rapidly improving. It was a Wall Street darling for a brief moment in time that quickly ended. A lot of its trouble centered on excess hype that was met by real-world concerns around fundamental issues, primarily its losses.
Those losses caused markets to quickly speculate that Coupang was wrongly compared to a number of its successful American counterparts, including Amazon (NASDAQ:AMZN). As a result. CPNG stock steadily fell following its IPO.
But Coupang rebutted one of the strongest arguments against it in Q3, posting net income of $90.68 million. The questions surrounding Coupang have never been about its revenue or its growth. After all, the firm posted $5.1 billion of sales in Q3 and 10% revenue growth. The problem was that it continuously lost a lot of money despite its strong sales.
But CPNG has undergone a phenomenal turnaround. In Q3, the company reported net income of $90.68 million. During the same period a year earlier, the firm lost $323.97 million.
Coupang looks to be hitting its stride fundamentally and looks like an attractive investment.
Tupperware Brands (TUP)
Investing in Tupperware Brands (NYSE:TUP) stock is admittedly a gamble at this point. During the company’s turnaround effort, its shares have fallen from nearly $20 to just $4.80 today.
The argument in favor of buying Tupperware is that, in the wake of the company’s restructuring, it has become a leaner, stronger firm whose shares will ultimately rebound drastically.
Although the firm’s sales decreased 20% YOY in Q3, falling to $302.8 million, Tupperware has divested its non-core assets and continues to develop more profitable distribution channels for its core storage products.
Primarily, Tupperware is focusing more intently on big-box retailers, beginning with Target (NYSE:TGT) in Q3.Additionally, TUP’s top line could be boosted by a potential trend of more consumers looking to economize by cooking at home in 2023.
Analysts covering Bowlero (NYSE:BOWL) unanimously believe that its shares are poised to climb further despite some of its fundamental shortcomings. Put another way, all of the analysts who cover BOWL have “buy” ratings on the shares even though the company lost $33.5 million in the third quarter.
Excluding a one-time item, the company reported net income of $7.2 million for Q3. Overall, Bowlero reported strong Q3 results and continues to be among the largest bowling center operators. Its revenue increased 27.2% year-over-year in Q3, reaching $230.3 million. Its same-store growth came in at 19.9%, indicating that the popularity of bowling is surging as the pandemic wanes.
Bowlero is attempting to make acquisitions within the bowling sector which should benefit the owners of BOWL stock.
Asana (NYSE:ASAN) stock is a tech name that appears too cheap to ignore. Like most tech stocks that consistently generate losses, Asana can be viewed as attractive because of its strong growth or it can be seen as a stock to avoid because of its lack of profitability.
The argument against Asana has merits to be sure. In Q3, the firm’s net losses rose dramatically to nearly $101 million from just above $69 million during the same period a year earlier. For all of 2022, its losses came in above $312 million, up from $198.29 million in 2021.
But on the other hand, Asana revenues jumped 49% over the first nine months of 2022 to nearly $400 million, making its shares attractive. ASAN stock is also attractive because the economy increasingly relies on software to organize teams.
Lithium Americas (LAC)
Lithium Americas (NYSE:LAC) stock has all the potential to have a breakout year in 2023. It is a stock that has a lot of potential and looks to be a great stock in the expanding lithium industry.
Lithium itself has become an increasingly important mineral as the demand for it has spiked due to its importance as a component of EV batteries. EVs are the future of transportation, and the manufacturers of their batteries are facing a lithium supply shortfall. So any company that can provide a reliable supply of the metal is well-positioned.
Lithium Americas can easily become one of the most important companies doing so because the company controls the Thacker Pass lithium mine in Nevada. Thacker is one of the largest lithium deposits in the U.S. and has consequentially become strategically important.
The U.S. has invested in lithium production in America, and Thacker Pass will remain relevant as the mine move towards producing lithium that is commercially viable. The company is well-funded, strategically important, and trades under $20 in a rapidly expanding market that isn’t slowing.
On the date of publication, Alex Sirois 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.