Stocks trading under $10 can be attractive for investors looking to scoop up some cheap shares. Unfortunately, quality stocks trading for less than $10 are few and far between. Stocks priced at this level can be a red flag for investors that something serious is wrong with a company. Many of these stocks have challenged underlying business models or difficult near-term outlooks. However, the CFRA Research analyst team has identified some cheap, high-quality stocks that could be excellent buying opportunities for frugal investors.
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Here are nine of the best stocks to buy under $10, according to CFRA:
| Stock | Implied upside from Oct. 16 closing price |
| Telefónica SA (ticker: TEF) | 10.8% |
| Nokia Corp. (NOK) | 52.7% |
| Snap Inc. (SNAP) | 23.5% |
| Tencent Music Entertainment Group (TME) | 44.1% |
| Aegon Ltd. (AEG) | 34.6% |
| Korea Electric Power Corp. (KEP) | 25.9% |
| Telecom Italia S.p.A. (OTC: TIIAY) | 31.6% |
| Polestar Automotive Holding UK PLC (PSNY) | 74.2% |
| iQiyi (IQ) | 36.3% |
Telefónica SA (TEF)
Telefónica is the leading telecom company in Spain. The stock pays an 8% dividend, the highest on this list and a rarity among stocks priced under $10. Analyst Adrian Ng says Telefónica’s restructuring efforts have improved its outlook. The company left Central America and acquired E-Plus in Germany and GVT in Brazil. It is also combining U.K. telecom assets in a joint venture with Liberty Global PLC (LBTYA) that will provide a major cash infusion, and Ng says Telefónica now has strong positions in its core markets. CFRA has a “buy” rating and $4.50 price target for TEF stock, which closed at $4.06 on Oct. 16.
Nokia Corp. (NOK)
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Nokia is a telecom equipment and digital map data vendor that also licenses intellectual property to third parties. Analyst Keith Snyder says the initial stage of the 5G investment cycle in North America and China should be a demand driver for Nokia, and he predicts the current cycle will be much larger than previous upgrades. Nokia has struggled with price erosion and market share losses in its North American mobile networks business, but Snyder says Nokia’s improved earnings visibility makes the stock an attractive investment. CFRA has a “buy” rating and $5.50 price target for NOK stock, which closed at $3.60 on Oct. 16.
Snap Inc. (SNAP)
Snap is the parent of Snapchat, and the company is a leading mobile-focused social media advertising company. Analyst Angelo Zino says Snap’s financial fundamentals are improving, the company is positioned to grow its installed base and the stock is attractively valued for investors a tolerance for high volatility and risk. Zino projects Snap can grow its monthly active user base from 750 million to 1 billion in the next two to three years. In addition, Zino says Snap can improve its offerings by integrating artificial intelligence technology. CFRA has a “buy” rating and $12 price target for SNAP stock, which closed at $9.72 on Oct. 16.
Tencent Music Entertainment Group (TME)
Tencent Music Entertainment is a leading online music platform in China and is the parent company of QQ Music, Kugou Music and WeSing. Crackdowns on U.S.-listed Chinese tech stocks by Chinese and U.S. regulators have eased in 2023, but Chinese stocks have continued to lag behind as the post-pandemic rebound in the Chinese economy has fallen short of expectations. Analyst Ahmad Halim says a rebound in the online music streaming business and strong growth in high-margin ad revenue will expand margins in the long term. CFRA has a “buy” rating and $10 price target for TME stock, which closed at $6.94 on Oct. 16.
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Aegon Ltd. (AEG)
Aegon is a Dutch insurance company that offers insurance, savings, pension, and investment products and services around the world. Analyst Jeff Lye says Aegon has a track record of strong execution, and its 2023 financial targets for deleveraging and free cash flow are within reach. Lye is bullish on Aegon’s strategy of focusing on strategic assets that reduce its capital ratio volatility and generate an attractive return on capital. He estimates Aegon will generate a cash yield to shareholders in excess of 20% within the next year. CFRA has a “buy” rating and $6.50 price target for AEG stock, which closed at $4.83 on Oct. 16.
Korea Electric Power Corp. (KEP)
Korea Electric Power is an integrated electric utility company that transmits and distributes electricity in South Korea. Halim says the Korean economy will see slower growth for 2023, but higher tariffs will help offset that decline. Higher fuel costs will likely continue to pressure earnings through 2024, but Halim says the government should step in and adjust tariffs to support Korea Electric over the long term. He projects a 15% increase in tariffs will support 16% revenue growth in 2023 and a return to profitability in 2024. CFRA has a “buy” rating and $8 price target for KEP stock, which closed at $6.36 on Oct. 16.
Telecom Italia S.p.A. (OTC: TIIAY)
Telecom Italia is the leading fixed-line and wireless telecom provider in Italy. The company plans to split off its network business into a separate company. Telecom stocks are not generally known for their huge gains, but Telecom Italia shares are up 16.7% this year through Oct. 16, the best performance of any stock on this list. Ng says buyers have expressed interest in Telecom Italia’s assets, and merger and acquisition deals will likely remain a central part of the company’s strategy to achieve its debt-reduction goals moving forward. CFRA has a “buy” rating and $3.50 price target for TIIAY stock, which closed at $2.66 on Oct. 16.
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Polestar Automotive Holding UK PLC (PSNY)
Polestar Automotive designs and manufactures electric vehicles. The company has two EV models on the market and expects to launch three additional models by 2025. Polestar shares are down 46% through Oct. 16, the worst performance of any stock on this list. Analyst Garrett Nelson says Polestar has an attractive growth runway and stronger outlook than most of its EV peers thanks to its presence in EV-friendly Europe. The company’s deliveries are up fivefold in the past two years, and Polestar has already reached gross profitability. CFRA has a “buy” rating and $5 fair value estimate for PSNY stock, which closed at $2.87 on Oct. 16.
iQiyi (IQ)
iQiyi is a leading Chinese streaming video platform that is often compared to U.S. streaming platform Netflix Inc. (NFLX). Analyst Jian Xiong Lim says iQiyi has an innovative monetization model that includes tiered membership services that cater to a wide range of customers and unique needs. In addition, Lim says iQiyi has a valuable library of premium and on-demand content, and the company is poised to turn a profit in 2023 following five consecutive years of losses. He projects 13% revenue growth in 2023. CFRA has a “buy” rating and $6.50 price target for IQ stock, which closed at $4.77 on Oct. 16.
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