The Dow, the S&P 500, and the Nasdaq all slipped on Tuesday after they closed at new record highs on Monday. The S&P 500 has now climbed roughly 14% since the end of October and over 15% in 2020. The recent positivity follows the passage of the long-awaited U.S. stimulus bill and the Christmas Eve Brexit deal.
On top of that, more people in the U.S. and elsewhere continue to receive the coronavirus vaccine and federal officials have projected that 100 million Americans will be vaccinated by February or March. Wall Street is also bullish heading into 2021 because the earnings outlook appears strong and ultra-low interest rates look poised to continue to boost stocks.
With this in mind, let’s help investors add a few stocks to their portfolios for 2021 by screening for strong stocks trading for under $10 per share…
Penny Stocks
One dollar or less used to be the common threshold for what we call “penny stocks.” Today, the SEC has expanded penny stocks to securities that trade for less than $5 a share. Many investors avoid these stocks because they are speculative in nature.
Meanwhile, penny stocks often trade infrequently and hold wide bid/ask spreads. These stocks also carry many other traits that, in many cases, cause excessive volatility. With that said, some penny stocks perform incredibly well, which helps them remain attractive.
Stocks Under $10
Moving on, let’s briefly discuss the next class of cheap stocks. Stocks that trade in the $5 to $10 range are generally less risky than their penny stock counterparts. Investors might be more likely to have heard of these companies or seen the tickers. They are, however, still inherently more speculative than many other higher-priced stocks.
Investors can obviously find winning stocks for under $10 if they are extremely selective. So today, we narrowed the list of thousands of these more speculative stocks down to a more manageable group of $10 and under stocks that might help boost your portfolio.
Screen Parameters
• 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 Holds, Sells or Strong Sells.)
• Average Broker Rating less than or equal to 3.5
(Average Broker Rating of a Hold or Better.)
• # of Analysts in Rating greater than or equal to 2
(Minimum of at least two analysts covering the stock.)
• % Change F1 Earnings Estimate Revisions -- 12 Weeks greater than or equal to 0
(Preferably upward earnings estimate revisions, but definitely no downward revisions.)
Here are three stocks of the over 40 highly-ranked stocks trading under $10 a share that made it through the screen today…
Himax Technologies (NASDAQ:HIMX), Inc. (HIMX)
Annaly Capital (NYSE:NLY) Management Inc (NLY)
Ford Motor Company (NYSE:F) (F)
Overall, all three of these stocks offer solid growth potential. Yet, it isn’t wise to pack your portfolio full of cheap, $10 or less stocks. Still, these stocks are certainly worth further investigation because grabbing a few of the top names from this list might bolster your returns. And let’s not forget that picking a few cheap stocks can also be quite fun.
Get the rest of the stocks on this list and start screening for the best stocks under $10 for yourself. And don't forget to backtest your strategy so you'll know how successful it's been before you put any of 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 options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance/.
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Annaly Capital Management Inc (NLY): Free Stock Analysis Report
Himax Technologies, Inc. (HIMX): Free Stock Analysis Report
Ford Motor Company (F): Free Stock Analysis Report
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