With so much enthusiasm dominating market sentiment in 2021, many investors bought in perhaps a bit too late and are now ruing the sudden volatility we’ve suffered so far this year. Nevertheless, it’s important to keep a long-term perspective. A downturn, even a bear market, could yield significant opportunities with the best cheap stocks to buy — in this case, equities under $10 per share.
Unlike other bearish cycles, the present juncture features multiple nuanced narratives. On one hand, you have broader economic concerns stemming from high inflation, a matter that affects everyone. But on the other hand, you have subsegments that may have benefitted from the catastrophe. For instance, the energy sector represents a huge catalyst for the best cheap stocks to buy due to fortuitously extraordinary relevance.
Of course, this doesn’t mean that you should jump on every discounted equity unit. Certainly, some publicly traded companies are suffering for legitimate reasons. However, in a period of rising fear, some viable names are slipping through the cracks. And so, here are seven of the best cheap stocks to buy for under $10 right now.
Cheap Stocks to Buy: VAALCO Energy (EGY)
When the novel coronavirus pandemic first upturned the modern global order, hydrocarbon-related companies like VAALCO Energy (NYSE:EGY) suffered significantly. In fact, EGY slipped into literal penny-stock territory during the spring 2020 doldrums. Fast forward to the present time and EGY is unquestionably a top performer, gaining more than 130% year-to-date (YTD).
Why the sudden reversal of fortune? Aside from the world gradually returning back to pre-pandemic norms, the Russian invasion of Ukraine proved to be a catalyst. Global oil supplies were shelved due to international sanctions on Russia and the pain at the pump skyrocketed. But the backdrop cynically boosted VAALCO because its primary oil exploration endeavors are located in West Africa.
So, because of the current situation, many countries are shifting attention to other energy sources, including the African continent. This puts VAALCO in prime position, making it one of the best cheap stocks to buy under $10.
Kosmos Energy (KOS)
Another company in the upstream energy business — specifically deepwater exploration and production — Kosmos Energy (NYSE:KOS) has been a revelation this year. Since its January opener, KOS has gained 128%, making it one of the best cheap stocks to buy on a pure performance basis. Better yet, the company probably has significant upside to enjoy following a few weeks of relatively slow price action.
Primarily, social activities are returning to pre-pandemic norms, which has boded very well for transportation statistics. In the U.S., vehicle miles traveled are back up to levels seen before the Covid-19 pandemic. That’s likely to put upward pressure on energy demand, which is a net positive for KOS stock.
In addition, without the pressing issue of Covid-19, companies don’t need to play ball regarding work-from-home initiatives. Therefore, it’s possible that upper management could put an end to the grand telecommuting experiment in favor of actual commuting. This too will light a fire under the energy industry, making KOS one of the best cheap stocks to buy.
Cheap Stocks to Buy: Target Hospitality (TH)
Not to be confused with the big-box retailer with a similar name, Target Hospitality (NASDAQ:TH) is an interesting opportunity, a business which ties in with its namesake industry as well as the hydrocarbon sector. Specifically, Target Hospitality provides workforce lodging solutions for oil, gas and mining operations, presenting a suddenly relevant profile.
If you happened to be confused about which Target I’m talking about, the hospitality-oriented version is the one with a 61.5% YTD performance. The retail version, on the other hand, is down 33% YTD. More importantly, Target Hospitality enjoys an upward trajectory that few companies can compete with.
Mainly, Americans before Covid-19 took relatively cheap energy prices for granted. Following Russia’s invasion of Ukraine, however, we all realized how fragile energy supply chains can be.
The other factor bolstering Target Hospitality is the economic realities. Should a global recession occur, many people will likely ditch their laptops for a shovel, transitioning into careers in the energy field. Cynically, this could lift TH as one of the best cheap stocks to buy.
Sirius XM (SIRI)
Moving into the decisively more speculative side of the best cheap stocks to buy, arguably not too many folks will consider Sirius XM (NASDAQ:SIRI). To be fair, the satellite broadcasting firm is about flat in terms of performance YTD, which isn’t bad for a non-energy-related equity unit. After all, the underlying Nasdaq index is down about 23% during the same period.
However, SIRI doesn’t inspire confidence, mainly due to relevance concerns. Many if not most folks anticipate that the grand work-from-home experiment will at least be a semi-permanent fixture in the American labor market. But I fundamentally disagree with this concept. Reports indicated that pre-pandemic, employees on average wasted over two hours daily on the clock.
So, color me skeptical. Overall, though, I anticipate a return to the office, which may then provide a downwind benefit to SIRI stock.
Cheap Stocks to Buy: UP Fintech (TIGR)
For those investors who want to live dangerously regarding the best cheap stocks to buy, I bring you UP Fintech (NASDAQ:TIGR). Known as Tiger Brokers in Asia, UP Fintech is billed as a leading online brokerage firm targeting global investors. Its proprietary mobile and online trading platforms allow participants to trade equities and assets on multiple exchanges around the world.
From an extremely speculative angle, this diverse profile may be attractive to sophisticated private investors. Primarily, different countries are deploying different strategies to navigate the new normal. And these variances could yield divergent results in investment performances.
For instance, the U.S. and western nations are eschewing cultural continuity in favor of outright economic performance through relatively loose immigration policies. On the flip side, you have countries like Japan, which are eschewing maximum economic potential for cultural continuity. In turn, may yield greater social stability and cohesion.
Which approach is the best? No one knows, but UP Fintech gives sophisticated investors the opportunity to place their wagers.
Silvercorp Metals (SVM)
Based in Canada, Silvercorp Metals (NYSEAMERICAN:SVM) is a China-focused precious metals firm specializing in the acquisition, exploration and development of silver-containing properties. It also happens to be China’s largest primary silver producer. Of course, right off the bat, we have two major risk factors to consider.
First off, the China angle is going to be a tough one to swallow for many investors. Following the Covid-19 pandemic, negative views on the world’s second-biggest economy hit historic highs. Amid Russia’s invasion of Ukraine, this negative attitude has sustained into the present year, with Americans regarding China’s relationship with Russia as a serious threat.
Second, precious metals — particularly industrial metals like silver — have not performed well despite the upward price pressure that inflation should impart. Thus, SVM stock would seem like a name to avoid rather than be counted among the best cheap stocks to buy.
However, it’s also possible that because of the myriad geopolitical conflicts we find ourselves in, critical commodities like silver could eventually enjoy long-term demand. Still, SVM stock is something to play with using only money you can afford to lose.
Cheap Stocks to Buy: F45 Training (FXLV)
I’m going to be brutally honest with F45 Training (NYSE:FXLV). As one of the much-anticipated initial public offerings (IPOs) of 2021, F45 Training — a global fitness community specializing in fun workouts that achieve quick results — has since been a disappointment. Since making its debut, FXLV stock has hemorrhaged nearly 62% of its market value.
The other disclosure? I’m not sure if F45 Training has the right stuff to launch a comeback. With the soaring inflation rate taking a bite out of the purchasing power of the dollar, households are looking to cut back wherever they can. And I’m afraid a fitness community is an easy expenditure to get rid of.
At the same time, the Covid-19 crisis forced many Americans to live a sedentary lifestyle. As Healthline.com warned, however, such a dynamic can quickly — and negatively — affect your health, including on the most benign end weight gain and on the more severe scale heart disease and type 2 diabetes.
To kick this bad habit, F45 Training could offer a viable solution. So, it’s possible FXLV could be one of the best cheap stocks to buy for under $10; But again, just be careful here.
On the date of publication, Josh Enomoto did not have (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.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
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