People love cheap stocks for their affordability factor and their ability to reap big gains in a short period of time (though, this also means investors can suffer big losses in a hurry).
But it's important to remember that cheap stocks are not necessarily better stocks.
"False promises of quick and painless riches are easier to fall for when an investment can be made with so little money up front," writes Kiplinger contributor Dan Burrows in his feature on penny stocks.
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"An investor might think, 'How risky could it be?'" The answer, Burrows says, is plenty.
"Per the Securities and Exchange Commission: 'Academic studies find that OTC [over-the-counter] stocks tend to be highly illiquid; are frequent targets of alleged market manipulation; generate negative and volatile investment returns on average; and rarely grow into a large company or transition to listing on a stock exchange.'"
If you are interested in cheap stocks, it's vital to do your research beyond just looking at the latest print for prices. You need to take a hard look at risk metrics, recent performance and future outlook in order to invest responsibly.
Why should I buy cheap stocks?
Some investors gravitate to cheap stocks because they see these companies as creating opportunities for larger returns.
And many folks simply don't have the cash to buy some of the priciest stocks on Wall Street, such as online travel company Booking Holdings (BKNG), which trades for roughly $5,400 a share at present.
One choice investors always have is to buy fractional shares of a stock whose price exceeds what they have available to invest.
Another is to find high-quality, cheap stocks. To be clear, this is referring to share price and not valuation metrics like book value or the current price compared with earnings estimates that signal undervalued stocks.
But this process can be difficult for investors. Unlike the best value stocks that tend to boast strong balance sheets and a solid commitment to shareholders, cheap stocks often face weak fundamentals. They are also known to be risky and volatile, which understandably makes some folks hesitant to buy them.
If you only have a few hundred dollars or you want to trade in round lots instead of a single share, then cheap stocks – or at least cheaper stocks – with strong fundamentals are one way to go.
Our methodology to find the best cheap stocks to buy
I have written extensively about capital markets and investing since 2008. Along the way, I've learned how to separate legitimate investing opportunities such as those found in the best stocks to buy from those more likely to result in volatility or dubious performance.
So when I put together this list of the top cheap stocks priced under $10 per share, I focused on companies that are all valued at more than $2 billion, hinting at more established operations, and that have strong trading volume suggesting ample liquidity.
Additionally, I included stocks that trade on major exchanges vs over-the-counter penny stocks. I also sought companies with potential for continued growth.
Bottom line, the best cheap stocks to buy now under $10 each have unique and focused business models that could protect them from the current volatility on Wall Street.
The best cheap stocks to buy
With that in mind, here are five of the best cheap stocks to buy that are priced at or under $10 per share.
Note that one of the risks of buying cheap stocks is that they move quickly, so if you decide to invest in them, do so with small amounts of capital that you can afford to lose.
Data is as of August 4.
Company | Share price |
|---|---|
ADT (ADT) | $8.45 |
Banco Santander (SAN) | $8.67 |
Compass (COMP) | $8.24 |
Hecla Mining (HL) | $6.15 |
Inter (INTR) | $6.52 |
ADT
- Sector: Industrials
- Market value: $6.9 billion
- Average daily trading volume: 17.6 million
Home security brand ADT (ADT, $8.45) was acquired by private equity firm Apollo Global in 2016, then spun out again via an initial public offering (IPO) in 2018.
ADT struggled in subsequent years due to a massive debt load, and its market value took a dive.
But this company is on the mend thanks to reliable revenue generated from its subscription-based security and safety alarms, cameras and home automation systems and related software.
And management's low-risk approach seems to have won over investors lately. Indeed, shares are up more than 24% for the year to date on a total return basis (price change plus dividends) through early August, handily outpacing the S&P 500's 8.4% total return.
And if the Federal Reserve resumes rate cuts later this year – an increasingly likely scenario at its September meeting, according to CME FedWatch – a leveraged business such as ADT's would naturally benefit from lower debt-service costs.
Banco Santander
- Sector: Financials
- Market value: $129.0 billion
- Average daily trading volume: 6.3 million
Madrid-based Banco Santander (SAN, $8.67) is a global financial leader that offers retail banking, as well as wealth management and corporate services.
Founded in 1856, Santander is the preeminent bank in Spain and has become a go-to provider across the Spanish-speaking world with more than 3,000 branches in South America.
Morningstar analyst Johann Scholtz says Banco Santander's exposure to emerging markets "comes with greater risk," but its earnings have been "remarkably stable compared with most of its European peers."
Meanwhile, SAN's current dividend yield of 2.9% is more than double the yield on the S&P 500 Index, providing a sweetener for income investors.
With U.S. markets volatile this year, lots of folks have been investing in European stocks. SAN is one of the best cheap stocks listed directly on U.S. exchanges for those who want to tap into that outperformance.
Compass
- Sector: Real estate
- Market value: $4.3 billion
- Average daily trading volume: 8.0 million
It seems counterintuitive that a housing stock such as Compass (COMP, $8.24) would be a good bet in a time of economic uncertainty.
Existing home sales slowed to a crawl in 2024 as rising mortgage rates, tight inventories and high prices took a toll on first-time homebuyers. But recent data from the Census Bureau shows that while the median sales price of houses sold in the U.S. remains at historically high levels, it's trending lower.
And any additional rate cuts from the Fed that reduce borrowing costs would be helpful to folks who have been priced out of a red-hot housing market.
Compass, which operates a real estate brokerage platform, has generated consistent double-digit revenue growth in recent years despite headwinds. And analysts expect this trend to continue in this fiscal year and next, targeting annual revenue growth of 21.8% and 13.5%, respectively.
COMP has also performed well on the price charts, up more than 92% in the past 12 months vs the S&P 500's 20% return.
And Needham analyst Bernie McTernan sees even bigger gains ahead. He recently reiterated a Buy rating on COMP along with an $11 price target, representing implied upside of 33.5% to current levels.
"We think COMP is the best way to play a housing market recovery in our coverage," McTernan wrote in a late-July note. "This is an increased question we are receiving from investors given dovish mortgage rate expectations."
If you have a higher tolerance for risk, COMP is one of the best cheap stocks under $10 to consider.
Hecla Mining
- Sector: Materials
- Market value: $3.8 billion
- Average daily trading volume: 20.9 million
Hecla Mining (HL, $6.15) is headquartered in Idaho but also operates in Canada, Japan, Korea and China. It aims to extract primarily silver and gold from its mines, along with other base metals found in its deposits.
Hecla was incorporated in 1891 and has a long history of corporate success.
What makes it particularly attractive right now is that stock volatility is driving investors into precious metals.
Indeed, gold prices are up 30% for the year to date to trade near record highs as a longer-term trend based on inflation expectations has been boosted by tariffs, global trade wars and rising economic uncertainty.
Commodities – whether we're talking about precious metals or crude oil – generally benefit from inflation. And that's good for miners such as Hecla.
To be sure, Hecla has gained 22% in 2025. Analysts tracked by S&P Global Market Intelligence have set their sights even higher for the materials stock. Their average price target of $7.65 represents implied upside of 24% over the next year or so.
Inter
- Sector: Financials
- Market value: $3.1 billion
- Average daily trading volume: 2.3 million
Analysts are overwhelmingly bullish on Inter & Co. (INTR, $6.52), a cheap stock under $10 that's gained nearly 60% so far this year.
Of the 10 analysts following the financial stock who are tracked by S&P Global Market Intelligence, six say it's a Strong Buy, two have it at Buy, one calls it a Hold and one has it at Strong Sell. This works out to a consensus Buy recommendation.
The Brazilian-based digital bank is "highly profitable," says Morningstar, which could make it "more resilient in recessions." In Q1 2025, Inter reported 31% year-over-year growth in net income, while gross revenue surged 38%.
Wall Street expects impressive growth to continue this fiscal year and next.
The company's impressive fundamentals also put INTR in a position to "generate stronger future cash flows for shareholders," Morningstar notes, adding that Inter's "valuation metrics are an additional encouraging factor."
However, it's prudent investors seeking out the best cheap stocks to buy do thorough research on INTR, given what Morningstar calls a "high uncertainty rating."
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