3 best stocks under $ 5
Low-priced stocks often catch the eye of investors hoping to buy the next one AMD Where Monster Beverage Company. Unfortunately, most stocks below $ 5 a share, or “penny stocks“, tend to have won this award, often due to challenges such as unbearable debt levels or outdated business models.
However, some penny stocks have positioned themselves for potentially large gains. Investors looking for such stocks should consider names such as Aphria (NASDAQ: APHA), Hecla mining (NYSE: HL), and Nokia (NYSE: NOK).
Canadian marijuana stocks like Aphria had their day in the sun as Canada prepared to legalize cannabis. However, when legalization took place in October 2018, it became a “sell the news” event for weed stocks. The industry suffered as the country faced a massive excess supply. Additionally, many Canadians continued to buy cannabis illegally as high taxes and supply issues pushed them back into the black market. This reduced revenue growth across the industry. Aphria, which once traded at nearly $ 18 per share, has fallen to $ 1.95 per share in recent months.
Initially, Aphria didn’t get as much attention as names like Canopy growth Where Tilray. However, unlike many of these bigger names, it made a profit in the last quarter. Lately, Aphria stock has seen a resurgence that took it to $ 4.95 per share.
Plus, just because marijuana stocks have fallen out of favor doesn’t mean their growth has stalled. In the last quarter, Aphria’s revenue almost doubled compared to the same quarter last year. Analysts also forecast 128% revenue growth for the current fiscal year and a 57% increase in net profit. Once more investors take note of the positive earnings amid massive growth, they will likely offer Aphria stock well above the $ 5 per share level.
At first glance, Hecla Mining may seem like an odd choice. As recently as 2008, it was trading below $ 1 per share. However, in the past 12 months it has increased by over 120%. Today, it is trading at around $ 4.40 per share.
He probably has the Federal Reserve to thank. So far this year, the Fed has added nearly $ 3 trillion to its balance sheet. Similar moves by other central banks also strengthened Hecla’s position.
Such moves can weaken confidence in currencies and fuel demand for gold. Thus, Hecla is in an ideal place to prosper. Most analysts expect Hecla to lose silver in 2020. Although gold prices have supported earnings, prices of other commodities such as silver and zinc have gained ground. delay.
However, for 2021, Hecla predicts a 23% increase in revenue and a return to profitability with rising gold prices. The outlook also continues to improve for the company on price increase of silver. If current trends continue, the bullish run for Hecla stock could easily take it well above $ 5 a share.
In recent years, the telecom supplier Nokia has been both victim and beneficiary of geopolitics. Losing a contract with China mobile hurt Nokia’s stock, and a subsequent move by suspend the dividend leads to new sales.
However, Huawei became a victim of the trade war between the United States and China. The Commerce Department has banned the company from using American technology in its products, and companies working with Huawei must apply for a license from the Commerce Department. These restrictions effectively sideline Huawei as a competitor, which could mean more 5G contracts for Nokia, based in Finland, North America and Europe.
In addition, Nokia has also implemented a Digital operations center which is cloud native. This will allow the business to generate revenue by lending slices of bandwidth to customers such as sports stadiums or large events that need it temporarily.
Currently, Nokia is trading at around $ 4.30 per share, which means the share has risen since the dividend suspension. Additionally, after the company lost money this year, analysts expect profits to rise more than 30% in fiscal 2021.
Investors should not expect a return to the nearly $ 40 per share Nokia saw in 2006. However, if it manages to win more 5G deals, it could exceed current levels.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.