Penny stocks or OTC (over the counter) stocks are stocks that represent small public companies with a market cap of less than 50 million. Because penny stocks aren’t traded on major exchanges and because they lack liquidity, you will never see the Smart Money buying or selling those type of stocks. However, penny stocks are alluring because you don’t need a lot of capital to make a lot of money, but you can also lose a lot of money too. Because penny stocks aren’t required to file with the Securities and Exchange Commission (SEC) they aren’t regulated like other stock and subject to a lot of manipulation such as pump and dump events. So it’s best to stay away from penny stocks if you are a novice retail investor.
Now these next set of stocks might not make you reach overnight but according to U.S.News & World Report, these stocks are the 10 of the Best Cheap Stocks to Buy Under $10:
Roughly 11 years into the longest bull market in U.S. history, investors may need to hunt a little harder than usual to find cheap stocks. While the fact that a given share trades for less than $10 by no means implies it's a steal, the rise of free trading apps like Robinhood has made investing accessible to millions of previously excluded Americans. Whether you don't have much to invest or you just enjoy the psychological allure of a low-priced stock, here are 10 of the best cheap stocks to buy under $10. Fair warning: some (but not all) of these nominally cheaper stocks come with higher-than-average risk.
-- Sirius XM Holdings (SIRI)
-- ADT (ADT)
-- Zynga (ZNGA)
-- Century Casinos (CNTY)
-- Nokia Corp. (NOK)
-- Nomura Holdings (NMR)
-- MFA Financial (MFA)
-- Celsius Holdings (CELH)
-- SmileDirectClub (SDC)
-- FS KKR Capital Corp. (FSK)
Zynga Inc. develops, markets, and operates games primarily for the mobile devices such as Apple iOS and Google's Android operating systems, as well as on social networking sites, such as Facebook. If you never heard of Zynga, they make the mobile games of Empires & Puzzles & CSR2. However, their more famous games include FarmVille and Mafia Wars.
Sirius XM Holdings provides satellite radio services in the United States and broadcast everything from traffic to music to sports. They also stream music and non-music channels over the Internet. Back in the days though XM and Sirius stock was going to the moon. To stay relevant they paid Howard Stern estimated $80 million per year from 2011 to 2015 to host his talk show. It must have been a good deal for both parties because in 2015, Howard signed a new five-year deal that worth an estimated $90 million per year. I have to give Sirius XM credit, for holding on…for dear life.
SmileDirectClub has an interesting business model in which they operate as a teledentistry company platform providing members with a customized clear aligner therapy treatment through a network of orthodontists and general dentists. The company went public late last year and in that short amount of time the stock price has been cut in half. However, the company now has an exclusive deal with Walmart to sell several of its products an electric toothbrush, a teeth whitening system with an LED light, whitening and sensitivity toothpastes, etc.
But the one stock that stands out to me is Nokia. Nokia provides hardware, software, and services for telecommunications operators, and other companies, but most of use might remember them for having one of the first cell phones on the market.
Nokia started 2010 as the global leader in the smartphone market with a third of the market share. And, well, you know how the rest of the story goes…demand for the iPhone 11 has been exceeded.
Nokia now has their eyes set on 5G and continues to make has inked 5G-related deals. For example, Vodafone Group Plc’s Australian telco arm has inked a day with to improve the existing 4G network and deploy 5G technology across the country. In addition, the company stands to make money through licensing fees with their 5G patents when 4G smartphones are upgrade to 5G smartphones.
For now, the chart suggests Nokia has bottom and could almost double from current prices.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.