The Best Cheap Stocks to Buy Now

While there is no exact definition of “cheap stocks,” as it depends on individual preferences, they typically refer to listed companies that trade between $5 and $10 per share. Cheap stocks are available across sectors and offer numerous opportunities to diversify portfolios.

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Why Should You Consider Investing in Cheap Stocks?

Cheap stocks offer exciting growth opportunities for patient investors who know what to look for. They can also provide exposure to cutting-edge technology, medicine, AI, and other companies that have not yet achieved a breakthrough but are on the verge of disrupting their industries.

Here are a few things to consider when evaluating cheap stocks:

• Invest in cheap stocks with a proven management team that has a history of turning around companies.
• Research and understand the industry and how a cheap stock can make a notable impact with their product or service.
• Analyze the balance sheet carefully and dig through several quarters of financial reports to ensure the cheap stock is low on debt, has growing revenues, and plenty of cash reserves.
• Always keep a separate portfolio for cheap stocks.

What are the Downsides of Cheap Stocks?

Investors must understand that cheap stocks trade at bargain prices for a reason, and before they commit capital, they must know why the price is where it is. There could be financial issues, operational risks, going-concern warnings, legal troubles, and other problems that investors should be aware of. The risk is higher, and volatility remains elevated due to less liquidity.

Here is a shortlist of cheap stocks currently worth considering:

• Mizuho Financial Group (MFG)
• Turkcell Iletisim Hizmetleri (TKC)
• CytomX Therapeutics (CTMX)
• Solid Power (SLDP)
• Epsium Enterprise (EPSM)
• BigBear.ai Holdings, Inc. (BBAI)
• Magnitude International (MAGH)
• Compass (COMP)
• Navitas Semiconductor Corporation (NVTS)
• United States Antimony Corporation (UAMY)

Update on My Previous Best Cheap Stocks to Buy Now

In our previous installment, I highlighted the upside potential of Mizuho Financial Group and Turkcell Iletisim Hizmetleri.

Mizuho Financial Group (MFG) - A long position in MFG between $6.48 and $6.75

MFG initially moved lower before advancing almost 7%. It has retreated close to my entry level, and I continue holding my long position.

Turkcell Iletisim Hizmetleri (TKC) - A long position in TKC between $5.35 and $5.62

After rising by over 8%, TKC rallied and then dropped again. It is now trading inside my entry zone, and I am holding this trade.

CytomX Therapeutics Fundamental Analysis

CytomX Therapeutics (CTMX) is a clinical-stage biopharmaceutical company focused on revolutionizing cancer treatments with more potent, less toxic anti-cancer medications, led by its Probody therapeutics product.

So, why am I bullish on CytomX Therapeutics after its earnings miss?

Revenues of $6.0 million and an earnings per share loss of $0.09 per share missed estimates. While the drop in revenues was a concern, I am bullish about its pipeline, with promising Phase 1 results for CX-801 in advanced melanoma patients and robust initial clinical results for CX-2051 in late-line colorectal cancer. CX 2051 also shows potential in other late-stage patients, including those with liver metastases and KRAS mutations.

CytomX Therapeutics Fundamental Analysis Snapshot

The price-to-earnings (P/E) ratio of 12.82 makes CTMX an inexpensive stock. By comparison, the P/E ratio for the S&P 500 Index is 29.87.

The average analyst price target for CytomX Therapeutics is $7.07. It suggests excellent upside potential with acceptable downside risks.

CytomX Therapeutics Technical Analysis

CytomX price chart

• The CTMX D1 chart shows price action between its descending 38.2% and 50.0% Fibonacci Retracement Fan.
• It also shows CytomX Therapeutics inside its horizontal support zone.
• The Bull Bear Power Indicator is bullish with an ascending trendline.

My Call on CytomX Therapeutics

I am taking a long position in CytomX Therapeutics between $3.49 and $3.93. While the price is below $5.00, it has tremendous upside potential, with a healthy cash balance, no immediate operational concerns, and a promising pipeline.

Solid Power Fundamental Analysis

Solid Power (SLDP) develops next-generation all-solid-state battery technology. Besides developing all-solid-state battery cell technology, it also sells sulfide solid electrolytes to other companies active in the solid-state sectors.

So, why am I bullish on SLDP after its earnings report?

Year-to-date revenues came in at $18.1 million, up $2.4 million versus last year. Operating expenses are decreasing, and its capital position remains excellent, thanks to its at-the-market offering and government contracts. I turned bullish after Solid Power secured promising contracts with Samsung SDI and BMW, confirming confidence in its industrial application for its all-solid-state battery cell technology.

Solid Power Fundamental Analysis Snapshot

The price-to-earnings (P/E) for SLDP is unavailable.

The average analyst price target for SLDP is $7.00. It suggests excellent upside potential with decreasing downside risks.

Solid Power Technical Analysis

Solid Power Price Chart

• The SLDP D1 chart shows price action trading below its ascending Fibonacci Retracement Fan.
• It also shows Solid Power approaching its horizontal support zone.
• The Bull Bear Power Indicator is bearish, but an ascending trendline began to form.

My Call on Solid Power

I am taking a long position in SLDP between $4.32 and $4.77. While Solid Power has troubling operational metrics, its business is moving in the right direction. Its capital position remains excellent, and recent partnerships with Samsung SDI and BMW should provide a significant bullish catalyst in the quarters to come.

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