How to find cheap stocks under $10 to buy in June
The shares gave back some of their recent gains on the last day of May. But the S&P 500’s 0.6% drop on Tuesday is hardly shocking after the market surged higher last Friday ahead of the Memorial Day long weekend. The strong performance capped a much-needed rebound that ended the S&P 500 and the Nasdaq’s seven-week slippages.
Last week, the three major U.S. indexes jumped 6% or more for the first time since November 2020. The benchmark has now jumped about 6% from its intraday lows on Friday May 20, even though all the same factors remain in place. which caused the wave of sales.
Fortunately, the market now knows that the Fed does not plan to intensify its rate hikes beyond its current outlook of 0.50% hikes at each of the next two meetings. More importantly, Wall Street may be starting to realize that the Fed is not on autopilot and will update its rate hike plans accordingly.
Despite strong consumer spending and sky-high prices, there are signs that inflation is easing, or at least has peaked. Additionally, investors continue to pour money into US equities during the recession because they are optimistic about the long-term outlook for the economy and the market. On top of that, there are few places where investors can even attempt to track inflation of 8% and above.
With all of this in mind, we’ve used one of our Zacks screens to help show investors how to find strong, well-ranked stocks trading under $10 per share to consider buying after the market showed positive signs in June…
A dollar or less was the common threshold for what we call penny stocks. Today, the SEC extended penny stocks to securities that trade for less than $5 per share. Many investors avoid these stocks because they are speculative in nature.
Meanwhile, penny stocks often trade infrequently and hold wide spreads between bid and ask. These stocks also have many other characteristics that in many cases lead to excessive volatility. That said, some penny stocks perform incredibly well, which helps keep them attractive.
Stocks Under $10
Moving on, let’s briefly discuss the next cheap stock class. Stocks that trade between $5 and $10 are generally less risky than their penny stock counterparts. Investors might be more likely to have heard of these companies or seen the tickers. However, they are still inherently more speculative than many other higher priced stocks.
Investors can obviously find winning stocks under $10 if they are extremely selective. So today we’ve whittled down the list of thousands of those more speculative stocks to a more manageable group of $10 and under stocks that could help boost your portfolio.
• Price less than or equal to $10
• Volume greater than or equal to 1,000,000
• Zacks rank less than or equal to 2
(No reservations, sales or strong sales.)
• Average broker rating less than or equal to 3.5
(Average broker rating of a take or better.)
• # of analysts in the rating greater than or equal to 2
(Minimum of at least two analysts covering the stock.)
• % change in F1 revenue estimate revisions: 12 weeks greater than or equal to 0
(Preferably upward revisions to earnings estimates, but certainly no downward revisions.)
Here is of them out of stock 40 highly ranked names trading under $10 a share that hit the screen today…
Playa Hotels & Resorts PLYA
Playa Hotels & Resorts NV is a leading owner, operator and developer of all-inclusive resorts located in prime beachfront locations in popular vacation destinations in Mexico and the Caribbean. Playa owns and/or manages a total portfolio consisting of 22 resorts in Mexico, Jamaica and the Dominican Republic. Shares of PLYA have jumped 18% in the past 12 months to crush the market’s 1% decline and outpace its industry’s sideways movement.
Playa Hotels & Resorts is set to benefit from a booming summer travel season and beyond as consumers try to do all they can to get back to their pre-pandemic lives. PLYA’s stock is part of the Hotels & Motels space that currently ranks in the top 30% of more than 250 Zacks industries. And the PLYA’s upside and downside outlook for this year and next is solid.
Centennial Resource Development, Inc. CDEV
Centennial Resource Development is an independent oil producer focused in the Delaware Basin, which is a sub-basin of the Permian Basin in West Texas. CDEV announced a $350 million share buyback program in February. Centennial Resource Development’s management team said the buyback plan is “backed by a strong two-year outlook and resilient to commodity price cycles.”
Shares of Centennial Resource Development went from under $0.50 per share in the initial covid selloff to over $9.00 in April. The stock has rebounded from a recent pullback, but it is still trading more than 20% below its recent highs. Zacks estimates predict greater revenue and earnings growth in 2022 and 2023. Additionally, CDEV stock could continue to benefit from surging oil and energy prices.
Both stocks offer solid growth potential. Still, it’s not wise to fill your portfolio with cheap stocks of $10 or less. Still, these stocks are certainly worth further investigation, as grabbing a few of the top names on this list could bolster your returns. And let’s not forget that picking a few cheap stocks can be a lot of fun too.
Get the rest of the stocks on this list and start searching for the best stocks under $10 on your own. And don’t forget to test your strategy so you know how successful it was before you put your money at risk.
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Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in the options mentioned herein. An affiliated investment adviser may hold or have shorted securities and/or hold long and/or short positions in options mentioned herein.
Disclosure: Information on the performance of Zacks portfolios and strategies is available at: https://www.zacks.com/performance/.
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