9 Best Cheap Stocks to Buy Under $10 | Investing

Stocks trading under $10 per share can be attractive for investors looking to scoop up some cheap shares. Unfortunately, quality stocks trading for less than $10 are few and far between. Stocks priced at this level can be a red flag for investors that something serious is wrong with a company. Many of these stocks have challenged underlying business models or difficult near-term outlooks.

Fortunately, the CFRA Research analyst team has identified some cheap, high-quality stocks that could be excellent buying opportunities in 2023 for frugal investors.

Here are nine of the best stocks to buy under $10, according to CFRA:

Nokia is a telecom equipment and digital map data vendor that also licenses intellectual property to third parties. Analyst Keith Snyder says the initial 5G investment period in North America and China is gaining momentum and supporting Nokia’s demand. Snyder expects the 5G upgrade cycle will be larger and last longer than previous network upgrades. He projects 2023 will be a rebound year for Nokia after the company lost market share and endured pricing pressures in its North American mobile networks business in 2022. CFRA has a “buy” rating and $6.50 price target for NOK stock, which closed at $4.28 on June 16.

Telefonica is the leading telecommunications company in Spain. The stock pays an 8.4% forward dividend yield, a rarity among stocks priced under $10. Analyst Adrian Ng says Telefonica has adjusted its portfolio to streamline its business and improve its balance sheet. The company acquired E-Plus in Germany and GTV in Brazil and exited the Central American market. In addition, Telefonica will receive $3.2 billion from combining its U.K. telecom assets in a joint venture deal with Liberty Global PLC (LBTYA). CFRA has a “buy” rating and $4.50 price target for TEF stock, which closed at $3.86 on June 16.

Tencent Music Entertainment Group (TME)

Tencent Music Entertainment is a leading online music platform in China and is the parent company of QQ Music, KuGou Music and WeSing. Crackdowns by Chinese and U.S. regulators have tightened restrictions on U.S.-listed Chinese tech stocks in recent years, weighing on Tencent Music’s performance. However, analyst Ahmad Halim says online music streaming sales may recover in 2023. Halim is bullish on the outlook for Tencent Music’s margins and average revenue per paying user, and he projects 7% year-over-year revenue growth this year. CFRA has a “buy” rating and $10 price target for TME stock, which closed at $8.03 on June 16.

Aegon is a Dutch insurance company that offers insurance, savings, pension and investment products and services around the world. The U.S. regional banking crisis has weighed on Aegon shares in 2023. However, analyst Jeff Lye says Aegon has a proven track record of executing and hitting its financial targets, and he expects 2023 to continue that pattern. The company is prioritizing deleveraging its balance sheet and focusing on strategic assets generating attractive return on capital. Lye estimates 2023 cash yield to shareholders of greater than 20%. CFRA has a “buy” rating and $7 price target for AEG stock, which closed at $4.79 on June 16.

Telecom Italia is the leading fixed line and wireless telecommunications provider in Italy. The company plans to split off its network business into a separate company. The telecommunications sector isn’t known for growth numbers, but Telecom Italia’s 21.7% gain through June 16 this year has outpaced the S&P 500. Analyst Adrian Ng says Telecom’s focus remains on asset divestitures and debt reduction. In the near term, Telecom Italia will likely continue to struggle with declining revenues in its main markets, but Brazil has been a strong growth source. CFRA has a “buy” rating and $3.50 price target for TIIAY stock, which closed at $2.77 on June 16.

iQiyi is a leading Chinese streaming video platform that is often compared to U.S. streaming platform Netflix Inc. (NFLX). Analyst Nazira Abdullah says iQiyi’s tiered membership offerings, premium on-demand content and innovative business model make its services appealing to a wide range of customers. After investing in subscriber growth and content for the past five years, Abdullah says iQuiyi is positioned to turn a profit in 2023. Looking ahead, Abdullah says iQuiyi’s ad-supported basic subscription package on iQiyi Lite will be a meaningful growth driver. CFRA has a “buy” rating and $8.50 price target for IQ stock, which closed at $5.50 on June 16.

Crescent Point Energy Corp. (CPG)

Crescent Point Energy is a Canadian oil and gas exploration and production company that has assets in Western Canada, Utah and North Dakota. Global energy shortages coupled with commodity price inflation led to record energy sector profits in 2022, allowing companies like Crescent Point to reduce debt and improve their balance sheets. Analyst Jonnathan Handshoe says Crescent Point has guided for 6% production growth and 9% capital expenditures growth in 2023. Handshoe projects the company will generate $905 million in excess cash flow this year. CFRA has a “buy” rating and $7.92 price target for CPG stock, which closed at $6.77 on June 16.

Rocket Lab USA Inc. (RKLB)

Rocket Lab is an aerospace and defense company that specializes in launch services, spacecraft engineering and design, components manufacturing, and other spacecraft management solutions. Snyder says Rocket is a top launch provider for customers with small payloads. The company has a better track record of successful launches than other smaller competitors and provides more mission customization than SpaceX and other larger competitors. Snyder says the reusability of Rocket’s Electron rocket will help reduce launch costs. He projects 41.7% revenue growth in 2023. CFRA has a “buy” rating and $8 price target for RKLB stock, which closed at $5.60 on June 16.

Oatly is the world’s largest oat milk producer. Oatly shares are down 50.4% in the past year through June 16, the worst performance of any stock on this list. At under $2 per share, analyst Arun Sundaram says Oatly is attractively valued given oat milk has been gaining market share from dairy and other plant-based milk for several years now. Sundaram says Oatly’s recent $430 million financing round will help alleviate liquidity concerns. He projects revenue growth will more than double from 12% in 2022 to 25% in 2023. CFRA has a “buy” rating and $4 price target for OTLY stock, which closed at $1.87 on June 16.