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Farran Powell
Farran Powell
Farran Powell
Verified by an expert
“Verified by an expert” means that this article has been thoroughly reviewed and evaluated for accuracy.
Stephanie Steinberg
Stephanie Steinberg
Stephanie Steinberg
Verified by an expert
“Verified by an expert” means that this article has been thoroughly reviewed and evaluated for accuracy.
BLUEPRINT
Updated 10:09 a.m. UTC Dec. 1, 2023
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Identifying high-quality stocks with share prices less than $10 can be like navigating a minefield of horrible investments. That’s because a low share price could indicate that something major is wrong with a company’s underlying business.
“When you’re selecting what stocks to buy, focus on analyzing whether it’s a good business. Look at key ratios like profit margins, return on equity and revenue growth,” said Alvin Carlos, a certified financial planner and managing partner at District Capital Management.
But there are some unpolished gems in the $10 stock market bargain bin. The stocks chosen for this list demonstrate attractive business metrics, including profitability and long-term growth potential.
We identified stocks with a share price of $10 or less with strong fundamentals, Wall Street “hold” or better consensus, at least $700 million in market capitalization and a lower risk rating.
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Best stocks under $10 to buy
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Tencent Music Entertainment Group (TME)
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Clarivate PLC (CLVT)
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iQIYI Inc. (IQ)
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PagSeguro Digital Ltd. (PAGS)
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Fisker Inc. (FSR)
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Compare the best stocks under $10
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Methodology
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Final verdict
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Frequently asked questions (FAQs)
Why trust our investing experts
Experienced stock analysts select our best stock selections based on screening for several must-have metrics. These metrics often include but are not limited to forward price-to-earnings, risk, earning stability and Wall Street “buy” consensus. Among all of our 70-plus stock selections, the average return beats the S&P 500. But investors should note that before purchasing any stocks, it’s important to do plenty of research and ensure their selections align with their financial goals and risk tolerance. You can read more about our methodology below.
- 730+ companies screened.
- 3 levels of fact checking.
- 3-step editorial review.
- Altimeter stock grade of B or higher.
Best stocks under $10 to buy
Tencent Music Entertainment Group (TME)
Sector
Communication services
Market capitalization
$14.6 billion
Year-to-date (YTD) return
2.78%
What you should know
Tencent Music Entertainment Group is a Chinese online music and entertainment platform. It owns several music streaming apps, including QQ Music, Kugou Music, Kuwo Music and WeSing. It also offers a large library of music, including licensed, self-produced and co-produced content. Hundreds of millions of users share their singing, short videos and more on Tencent’s platform.
In the third quarter of 2023, TME posted total revenues of $900 million, a 10.8% year-over-year decrease. Tencent cited a decline in revenues from social entertainment services as a reason for the decrease. Tencent’s music subscription revenue was $438 million, up 42% year over year. Net profit was also up 15.6% year over year. The company boasts a strong earnings yield and low price-to-book ratio.
Pros and cons
Pros
- Owns Kugou Music, QQ Music and Kuwo Music, the top three music streaming apps in China by number of monthly active users.
- Posted a double-digit profit margin in the past four quarters.
- Reached 100 million paying users in June 2023.
Cons
- India banned several TME apps in 2020.
- Sightly high price per cash flow.
- Low cash flow per share.
More details
P/E: 20.
Clarivate PLC (CLVT)
Sector
Technology
Market capitalization
$5.15 billion
YTD return
-6.95%
What you should know
Clarivate is an analytics company that provides subscription-based services in areas including scientific and academic research, biopharma intelligence, medtech intelligence, and intellectual property intelligence. In October 2023, Clarivate announced a partnership with EveryLibrary, a nonpartisan library advocacy organization, and the renewal of its contract with the Federal Library and Information Network, a group of federal agencies that supports federal libraries and information centers.
In terms of financials, Clarivate’s most recent quarter showed strong results. The company has a strong earnings yield and may be undervalued based on its low price-to-book and price-to-cash flow ratios. Revenue increased a modest 1.81% year over year in the third quarter of 2023. In addition, net income doubled year over year to $12.3 million. Overall, Clarivate’s favorable valuation makes it worth considering as a long-term play.
Pros and cons
Pros
- With a very positive valuation, Clarivate could be a good long-term investment.
- The company appointed a new CEO in September 2022 who made key moves such as paying down $500 million in debt.
- Strong cash flow per share.
Cons
- Negative profit margin in the second quarter.
- Free cash flow decreased $38.7 million in the third quarter.
- Some analysts are bearish about the stock.
More details
P/E: 30.
iQIYI Inc. (IQ)
Sector
Communication services
Market cap
$4.2 billion
YTD performance
-15%
What you should know
iQIYI is a Chinese subscription streaming service owned by Baidu. The service allows viewers to stream content from several Asian countries. Viewers can stream content in up to 720P quality without needing a subscription. However, subscriptions add certain benefits, such as higher streaming quality and ad skips.
In the second quarter of 2023, the company’s revenue was up 17% year over year. It posted an operating income of $84.2 million and an operating income margin of 8%, compared to 2% in the same period in 2022. The company has also increased its free cash flow for four consecutive quarters.
Pros and cons
Pros
- iQIYI has nearly quadrupled its year-over-year operating income.
- The company is investing in upcoming technologies like generative artificial intelligence.
- Grew average daily subscribers to 111 million in the second quarter, from 98.3 million during the same period in 2022.
Cons
- Cash on hand has decreased in recent quarters.
- Slim profit margin.
- Share price down by double-digits in the past five years.
More details
P/E: 16.98.
PagSeguro Digital Ltd. (PAGS)
Market capitalization
$3.3 billion
YTD return
15%
What you should know
PagSeguro Digital Ltd., based in São Paulo, Brazil, provides consumers, entrepreneurs, merchants and companies with financial technology solutions and services. Its PagSeguro ecosystem allows clients to address their day-to-day financial needs, including spending and receiving funds. The company’s PagBank digital account offers payment and banking services through the PagBank mobile app. PagSeguro went public in early 2018.
PAGS looks like an attractive buy at the moment. An ISS-EVA analysis rates the stock 98 out of 100 versus its sector, where 100 is the most undervalued. As a result, the firm rates the stock as a “buy.” The company’s net profit has hovered around 10% in each of the past four quarters. Unsurprisingly, the company boasts a strong earnings yield, especially compared to the competition. The ISS-EVA analysis rates the stock a 97 on its risk score, where 100 is the riskiest. Investor sentiment is also weak for PAGS.
Pros and cons
Pros
- Rated highly undervalued by analysts.
- Strong earnings yield.
- Low price-to-book and price-per-cash flow ratios.
Cons
- Weak investor sentiment.
- Could be risky due to its high degree of volatility.
- PAGS stock has been trending downward since its peak price in the summer of 2021.
More details
P/E: 10.5.
Fisker Inc. (FSR)
Sector
Consumer cyclical
Market capitalization
$552 million
YTD return
-78.27%
What you should know
Fisker is a California-based automaker developing the Fisker Ocean, an all-electric SUV. You can reserve the vehicle for $250. Fisker is still in its early stages as a company; as of September 2023, it had delivered only 900 vehicles in the U.S. and Europe. However, the goal is to deliver 300 vehicles per day this year.
Given the company’s early stage, it’s not surprising its earnings don’t look very strong. However, net income was less in the red in the third quarter of 2023 compared to the first quarter. Its earnings yield, while negative, slightly beats the competition. Analysts also recommend buying the stock, but, in such early stages, this represents a speculative play. In addition, the stock is highly overvalued at the moment, and investor sentiment is weak.
Pros and cons
Pros
- Earnings momentum is very positive, which could eventually help the company move closer to profitability.
- Fisker announced it would open its first delivery center in China in 2023 and start deliveries in 2024.
- In October, the company reduced the price for its high-end Ocean Extreme in the U.S. and Canada.
Cons
- Fisker has faced production issues, falling well short of its second-quarter target.
- The company is in its early stages and just beginning to ramp up production, making it a more speculative investment.
- Fisker is overvalued.
More details
P/E: N/A.
Compare the best stocks under $10
| Company | Sector | YTD performance |
|---|---|---|
| Tencent Music Entertainment Group (TME) | Communication services | 2.78% |
| Clarivate PLC (CLVT) | Technology | -6.95% |
| iQIYI Inc. (IQ) | Communication services | -15% |
| PagSeguro Digital Ltd. (PAGS) | Technology | 15% |
| Fisker Inc. (FSR) | Consumer cyclical | -78.27% |
Methodology
The best stocks under $10 included above all trade on a major U.S. stock exchange and meet the following criteria:
- An Altimeter overall grade of B or higher. The overall grade considers profitability, earning stability, valuation and earning expectations. Grades of B or higher for both are stocks ranked in the top quarter of nearly 5,000 stocks in Altimeter’s stock database, which indicates that these companies have strong valuations and can improve returns.
- Market capitalization of at least $700 million. Small-cap stocks are among the most volatile and risky stocks listed on major exchanges, so our selection was limited to those with a capitalization of at least $700 million.
- Consensus analyst recommendation of “hold” or better. A strong number of analyst ratings indicates an expectation the stock will perform well.
- An Altimeter risk level of A or B. The Altimeter risk grade is calculated based on a company’s credit rating, management sentiment and a fundamental forensic assessment of its financial health.
Why other stocks didn’t make the cut
Just because a stock has a low share price doesn’t mean it is an attractive buying opportunity. Good stocks that are priced at $10 or less are few and far between. Companies with low share prices often have challenged business models. For example, they may not have a significant competitive advantage in their sector, or their earnings may not be growing. You often find that stocks under $10 have very high price-to-earnings ratios, indicating the stock is overpriced despite looking cheap. Many of these stocks struggle to turn a profit and therefore have a “sell” rating from analysts.
To assess business fundamentals, we screened for a stock’s earning power for profitability in relation to its asset base and whether the company is improving its earning power. Generally, the stocks on this list are moving in the right direction, even if they aren’t the most profitable companies yet. Stocks that didn’t make the list may be moving in the wrong direction.
Final verdict
Buying stocks priced under $10 is not for the faint of heart. Many of these stocks are extremely volatile and high-risk speculative investments, but some diamonds in the rough have the potential for extremely large long-term gains.
Perhaps the most attractive stock to buy on this list is PagSeguro Digital Ltd. (PAGS). The company is extremely undervalued at the moment and has posted a double-digit profit in the past four quarters. It also has a strong earnings yield and a low P/E ratio. However, investors should keep in mind that this stock can be volatile.
You can limit the risks of investing in cheap stocks by diversifying your portfolios rather than making large bets on one or two stocks. There are many ways to do so, including maintaining a diversified portfolio of stocks and buying index funds. The latter is often easier and may involve fewer fees than actively managed funds. Regardless of your approach, it’s best to diversify to reduce risk and potentially improve long-term returns.
Frequently asked questions (FAQs)
You can buy cheap stocks or fractional shares of expensive stocks for as little as $10. The key to long-term investing success is not about how much money you start with but about compounding returns and consistent contributions.
Any brokerage that allows fractional stock trading allows its users to invest in any qualified stock for as little as $10. Remember that some brokerages may restrict fractional trading of certain stocks, such as those with lower share prices or smaller market capitalizations.
The ability to make money off $10 stocks depends on a variety of factors, such as market conditions, the company’s financial performance and the stock’s potential for growth. While investing in lower-priced stocks may provide an opportunity for higher returns, it also comes with risks, such as increased volatility and the potential for significant losses. It’s essential to carefully evaluate the potential risks and rewards before investing in any stock, regardless of its price.
Investing in cheap stocks can provide valuable lessons for investors, especially beginners. By investing in lower-priced stocks, investors can learn about market conditions, company fundamentals, and the risks and rewards associated with investing. Additionally, investing in cheap stocks can provide an opportunity to diversify their portfolio and potentially achieve higher returns. However, it’s important to approach investing in cheap stocks with caution and a solid understanding of investment principles, as they can also come with increased risks.
Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.
Blueprint has an advertiser disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.
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Bob Haegele is a freelance writer specializing in topics such as insurance, investing and credit cards. His work has appeared on Business Insider, CreditCards.com, and other nationally recognized outlets. Follow him on Twitter @thefellowfrugal.
BLUEPRINT
Farran Powell is the lead editor of investing at USA TODAY Blueprint. She was previously the assistant managing editor of investing at U.S. News and World Report. Her work has appeared in numerous publications including TheStreet, Mansion Global, CNN, CNN Money, DNAInfo, Yahoo! Finance, MSN Money and the New York Daily News. She holds a BSc from the London School of Economics and an MA from the University of Texas at Austin. You can follow her on Twitter at @farranpowell.
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Stephanie Steinberg has been a journalist for over a decade. She has served as a health and money editor at U.S. News and World Report, covering personal finance, financial advisors, credit cards, retirement, investing, health and wellness and more. She founded The Detroit Writing Room and New York Writing Room to offer writing coaching and workshops for entrepreneurs, professionals and writers of all experience levels. Her work has been published in The New York Times, USA TODAY, Boston Globe, CNN.com, Huffington Post, and Detroit publications.
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As an expert in finance and investing, I can confidently dissect and analyze the key concepts presented in the article about the best stocks under $10. The article focuses on helping readers make informed decisions by identifying stocks with strong fundamentals and growth potential. Let's break down the relevant information:
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Introduction and Disclosure:
- The article is from Blueprint, an independent, advertising-supported comparison service.
- Compensation from advertisers does not influence editorial recommendations.
- Advertiser disclosure policy is emphasized.
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Expert Verification:
- The article is verified by experts, including Bob Haegele, Farran Powell, and Stephanie Steinberg.
- Verification implies thorough review and evaluation for accuracy.
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Date and Update:
- The article was updated on December 1, 2023, providing current information.
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Identifying Quality Stocks Under $10:
- Investing in stocks under $10 can be challenging due to potential risks.
- Emphasis on analyzing key ratios like profit margins, return on equity, and revenue growth.
- Selected stocks meet criteria such as a share price of $10 or less, strong fundamentals, Wall Street consensus, market capitalization over $700 million, and a lower risk rating.
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List of Best Stocks Under $10: a. Tencent Music Entertainment Group (TME):
- Chinese online music and entertainment platform.
- Strong metrics include profitability, revenue growth, and a large user base.
- Notable pros and cons listed.
b. Clarivate PLC (CLVT):
- Analytics company providing subscription-based services.
- Partnership announcements and strong financial results highlighted.
- Pros and cons discussed.
c. iQIYI Inc. (IQ):
- Chinese subscription streaming service owned by Baidu.
- Positive financials, revenue growth, and investment in upcoming technologies.
- Pros and cons outlined.
d. PagSeguro Digital Ltd. (PAGS):
- Brazilian financial technology provider.
- Undervalued with strong earnings yield, low ratios, and consistent net profit.
- Pros and cons presented.
e. Fisker Inc. (FSR):
- California-based electric vehicle automaker.
- Early stages with positive earnings momentum but facing challenges.
- Pros and cons discussed, including overvaluation.
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Methodology:
- Criteria for selecting the best stocks under $10, including Altimeter overall grade, market capitalization, analyst recommendation, and risk level.
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Why Other Stocks Didn't Make the Cut:
- Explanation of factors leading to exclusion, such as low share prices indicating challenged business models.
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Final Verdict and Caution:
- Investing in stocks under $10 is high-risk, and caution is advised.
- PagSeguro Digital Ltd. is highlighted as a potentially attractive investment.
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Frequently Asked Questions (FAQs):
- FAQs address the ability to invest in cheap stocks, brokerage options, making money from $10 stocks, and the educational value of investing in lower-priced stocks.
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Contributors:
- Brief profiles of the article contributors, including Bob Haegele, Farran Powell, and Stephanie Steinberg.
In summary, the article provides a comprehensive guide for readers interested in investing in stocks under $10, offering insights, analysis, and expert perspectives to aid in decision-making.
