The 7 Best Cheap Stocks Under $10 to Buy Now
After rising last month due to increased hopes for a slowdown in inflation and a possible easing of Federal Reserve rate hikes, it’s unclear whether the stock market as a whole will keep climbing or if another round of volatility is just around the corner. Yet, while uncertainty still runs high, that doesn’t necessarily mean you should “wait and see” with the best cheap stocks under $10 per share.
Why? Because even with the latest broad market rally, these undervalued, under-the-radar names continue to trade at depressed valuations. If subsequent economic data, commentary from the Fed or both causes another selloff in the coming months, these stocks have less room to fall than pricier plays.
In addition, their respective low valuations leave these cheap picks well-positioned to make an outsized move higher, when the current macro issues really begin to subside and the stock market makes a recovery.
Still at deep value prices, consider now a great time to enter a position in each of these seven best cheap stocks under $10 per share.
Best Cheap Stocks Under $10: ACCO Brands (ACCO)
Based in Illinois, ACCO Brands (NYSE:ACCO) makes and markets office and school supplies. While a mature, “old school” type of business, what this company lacks in terms of growth is more than made up for by the severe undervaluation of ACCO shares.
At current prices, ACCO stock trades for just 5.3 times the low end of management’s earnings forecast for 2022. Admittedly, besides the lack of revenue and earnings growth, there are some other reasons at play for this discounted valuation. ACCO has a high level of debt on its balance sheet.
Management also materially lowered its outlook a few months back. However, one can argue that current headwinds are more than factored-in. While waiting for earnings to recover in 2023 and 2024, you can garner steady returns via ACCO’s 5.4% dividend yield, which is more than covered by current earnings.
Accel Entertainment (ACEL)
Accel Entertainment (NYSE:ACEL) is the largest player in what’s known as the “distributed gaming” industry. Put simply, it’s a fancier way of saying “slot route operator.”
Expanding beyond its home market of Illinois, the company has — through organic growth and acquisitions — expanded into nine U.S. states. Going public in 2019, ACEL stock has delivered a middling performance so far. More recently, shares have been knocked lower by current macro worries as well as concerns that this particular company has a wall in terms of growth.
Yet, while Accel may be out of high-growth mode, that doesn’t mean ACEL shares will keep performing poorly forever. Trading for only 12 times earnings, a sharp discount to most gaming stocks, the stock could experience a rerating if its less glamorous gaming operations hold up well during the current economic downturn and the company is able to partially reaccelerate earnings growth.
Best Cheap Stocks Under $10: Adecoagro SA (AGRO)
Some of the best cheap stocks under $10 are foreign stocks. One of them is Adecoagro SA (NYSE:AGRO). Domiciled in Luxembourg, all of this agricultural business company’s 27 industrial farms are actually located across South America in Argentina, Brazil and Uruguay.
With the global food shortage boosting food prices, AGRO stock has unsurprisingly held up well during this down year for the stock market. Shares soared when the initial supply shocks hit in early 2022, at the onset of Russia’s invasion of Ukraine, but have pulled back since in response to falling food commodity prices.
However, a rebound for this low-priced stock — trading for 5.4 timesearnings — may be possible. As Louis Navellier argued back in November, if food shortages persist and outweigh concerns that a global recession will affect food demand, shares could move higher. Grab AGRO stock ahead of a potential move back to the double digits.
Arcos Dorados (ARCO)
Arcos Dorados (NYSE:ARCO) is another undervalued gem among Latin American stocks. This Uruguay-based company, with a Spanish name meaning “Golden Arches,” is the master franchisee for McDonald’s (NYSE:MCD) in 20 Latin American and Caribbean countries.
Despite this relationship with a high-quality, blue-chip company, ARCO stock itself doesn’t trade at a premium valuation. In fact, you can scoop up shares today at a very low valuation of about 12 times earnings.
Arcos’ current earnings multiple makes little sense, given two factors. First, the company has continued strong results. Last quarter, sales climbed 34.2% year-over-year (YOY). Net income also nearly doubled.
Second, ARCO is expected to keep on experiencing strong earnings growth. Per sell-side estimates, the company’s EPS is expected to rise from 53 cents this year to 76 cents by fiscal 2024. Not bad for a stock selling for around $7.50 per share today.
Best Cheap Stocks Under $10: Immersion (IMMR)
Back in September, I called Immersion (NASDAQ:IMMR) one of the best micro-cap stocks to buy and hold for the next decade. Since then, shares in the patent licensing company have taken off, from just above penny stock levels to around $7.50 per share today.
But even with this big run-up, fueled by an impressive earnings beat, more near-term runway remains. That makes IMMR stock one of the best cheap stocks under $10 to buy.
It all has to do with the types of patents Immersion licenses to third parties. This company specializes in haptic, or 3D touch, technology patents.
As Big Tech moves aggressively into the augmented reality (AR) and virtual reality (VR) device space, demand for Immersion’s patents could keep rising. Alongside this, the company stands to reap a windfall, if it wins its patent litigation suit against Meta Platforms (NASDAQ:META). With such strong catalysts, IMMR stock is a steal at current prices.
Playa Hotels & Resorts (PLYA)
Playa Hotels & Resorts (NASDAQ:PLYA) may have its corporate headquarters just outside of D.C. in Fairfax, Virginia, but this resort hotel owner’s operations are all in sunnier locales like the Dominican Republic, Jamaica and Mexico.
Inflation and economic slowdown worries have put pressure on PLYA stock this year. Since January, shares have experienced a more than 24% price decline. Yet, while the leisure industry may be in for tougher times, after the 2021-2022 post-pandemic “revenge travel” boom, Playa may be in a strong position to ride things out.
Namely, this due to Playa’s all-inclusive revenue model, which includes room, food and beverage and entertainment at one set price. Due to the perception of offering more value for money, these types of resorts may be more resilient during a travel industry downturn. With this in mind, there may be too much pessimism priced into this bargain hotel stock under $10 per share.
Best Cheap Stocks Under $10: Ring Energy (REI)
Ring Energy (NYSEMKT:REI) may be one of the stronger opportunities among cheap energy stocks. This explorer of oil and natural gas, like its peers, has benefited greatly from the massive jump in fossil fuel prices in 2022.
Yet, even as crude oil and natural gas prices have moved lower — in turn pushing REI stock lower — there may be potential for shares to bounce back. As Seeking Alpha recently reported, Ring closed on an acquisition a few months back that is providing immediate benefits to the company, including increased cash flow and a lower level of leverage.
In turn, Ring can use this increased cash flow to make additional accretive acquisitions. The company could also use the cash to more quickly de-lever its balance sheet. Such improvements to fundamentals could be key in sending dirt-cheap REI stock — currently trading for only 2.5 times earnings — back to past highs.
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On the date of publication, Thomas Niel 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.
Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.
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