In this article, we discuss 12 best affordable stocks to buy under $5. If you want to see more stocks in this selection, check out 5 Best Affordable Stocks to Buy Under $5.
Third Point, a New York-based financial advisor, published its third-quarter 2022 investor letter back in October, in which the fund highlighted its market outlook. It stated that the fundamentals lost ground as technical flows and macro analysis took prominence. The environment in August and September gradually became more depressing after the exuberant bear market bounce in July, which was motivated by promising indicators of inflation reduction, rate control, and assurances of a gentle landing. The letter said that the bearish trend persisted in the Q4 start amid the UK government’s inability to manage its own monetary and fiscal policies, which unhelpfully established a new narrative of concern about financial stability and made an already bleak situation worse. The letter added that most dependable analysts have made convincing arguments in favor of doomsday scenarios and joined the chorus of the famous bear Nouriel Roubini by claiming that a catastrophic recession and protracted bear market is about to begin.
However, amid all the gloom and bear-market chorus, wise investors are loading up on affordable stocks that can rebound in the long term. Almost all successful investors, including Warren Buffett, agree that one of the best ways to profit from the stock market is to buy solid stocks when they are trading at affordable prices and to never get distracted by short-term news.
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Our Methodology
The cheap stocks included in this list are trading under $5 as of December 17. These stocks have been narrowed down based on the growth catalysts each offers as growth potential. They are also popular among the 900 hedge funds tracked by Insider Monkey.
12. SoFi Technologies, Inc. (NASDAQ:SOFI)
Share Price as of December 17: $4.6400
Number of Hedge Fund Holders: 25
SoFi Technologies, Inc. (NASDAQ:SOFI) was established in 2011, with a mission to assist customers in refinancing their student loans at reduced interest rates. The company is now a full-service financial institution that offers digital financial services. It is divided into three business segments: lending, technology platforms, and financial services.
For SoFi Technologies, Inc. (NASDAQ:SOFI) to grow over the next five years, its banking license will be crucial. The company is already making use of its banking license to grow its deposit base by attracting customers with a 1.8% annual percentage return on deposits. In addition, it has increased deposit fees more swiftly than other banks to cross-sell its products to these new customers. The choice seems to be paying off since SoFi’s membership has risen 69% over the prior year.
SoFi Technologies, Inc. (NASDAQ:SOFI)’s technological platform, particularly its Galileo product, which it bought for $1.2 billion in 2020, is a crucial part of its expansion. In the third quarter of 2022, the number of technology platform-enabled accounts increased by 40% year over year to 124.3 million, driven by a variety of new client acquisitions and growth among existing clients. Additionally, the revenue of its technology business increased by 69% over the same period last year to $84.8 million.
The company’s excellent momentum in member, product, and cross-buy acquisitions demonstrates the advantages of its extensive product offering and unique Financial Services Productivity Loop (FSPL) methodology.
Just like Nokia Oyj (NYSE:NOK), Telefónica, S.A. (NYSE:TEF), and Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC), SoFi Technologies, Inc. (NASDAQ:SOFI) is one of the best affordable stocks to buy under $5.
11. Braemar Hotels & Resorts Inc. (NYSE:BHR)
Share Price as of December 17: $4.0500
Number of Hedge Fund Holders: 26
Braemar Hotels & Resorts Inc. (NYSE:BHR) is a real estate investment trust that invests in luxury hotels and resorts with high revenue per available room (RevPAR). It has about 3,875 rooms in 14 hotels in six states, the District of Columbia, and St. Thomas in the US Virgin Islands. Two of the firm’s hotel assets are indirectly held via investments in majority-owned consolidated entities, while the other two are owned directly by the company.
The preliminary occupancy rate in November for Braemar Hotels & Resorts Inc. (NYSE:BHR) was roughly 64%, which was lower than the 73% occupancy rate for October. In November, RevPAR increased by 5% year over year to $253, whereas in October, it increased by 25% year over year to $280. For the business, each of those numbers constituted all-time monthly highs.
The company’s premium resorts continued to profit from steady leisure demand throughout the third quarter, while its urban portfolio showed strong rebound growth. As a result, over the next three years, Braemar’s revenue is anticipated to increase at a pace of around 6.9% annually, which is roughly in line with the expected growth rate of the sector.
10. Transocean Ltd. (NYSE:RIG)
Share Price as of December 17: $4.2800
Number of Hedge Fund Holders: 36
Transocean Ltd. (NYSE:RIG) provides offshore contract drilling services for oil and gas wells. The company’s excellent market position and well-diversified clientele include significant oil and gas firms. Transocean Ltd. (NYSE:RIG), which is well-positioned to profit from the continued rise in demand for offshore drilling services, is one of the 12 best affordable stocks to buy under $5.
Investors are interested in Transocean Ltd. (NYSE:RIG), which has a market value of $2.9 billion and an order backlog of $8.2 billion. There are still 12 rigs cold-stacked by Transocean. With the market situation improving, these rigs will provide more revenue visibility. In addition, Transocean Ltd. (NYSE:RIG) is ready to reduce debt as cash flows increase. As a result, the business aims to significantly reduce its $3 billion debt over the next few years.
9. Nu Holdings Ltd. (NYSE:NU)
Share Price as of December 17: $3.9000
Number of Hedge Fund Holders: 33
Nu Holdings Ltd. (NYSE:NU) operates primarily in Brazil, Mexico, and Colombia as a digital financial services platform and technology firm. Nu went public in 2021 at a valuation of over $41 billion and is down more than 55% this year.
However, Nu Holdings Ltd. (NYSE:NU) keeps registering astounding development. Examining client growth is one of the most important methods to judge a company’s profitability. Nu acquired 5.1 million new customers in a single quarter, bringing its total customer base in Brazil, Mexico, and Colombia to 70.4 million. By the number of active clients, this marks a 46% year-over-year (YoY) growth, making Nu Holdings Ltd. (NYSE:NU) one of the largest and fastest-growing digital financial services platforms globally.
8. Altice USA, Inc. (NYSE:ATUS)
Share Price as of December 17: $3.8000
Number of Hedge Fund Holders: 42
Altice USA, Inc. (NYSE:ATUS) and its subsidiaries supply broadband communications and video services in Puerto Rico, the United States, Canada, and the Virgin Islands. Altice USA, Inc. (NYSE:ATUS) is one of the 12 most affordable stocks to buy under $5.
Over the last three years, the stock price of Altice USA, Inc. (NYSE:ATUS) has decreased by 84%. Despite the share price declining over three years, the company was still able to increase EPS by 40% annually. Over the past three years, Altice USA, Inc. (NYSE:ATUS) has maintained rather good sales. However, general market uncertainty has affected the share price.
7. Heron Therapeutics, Inc. (NASDAQ:HRTX)
Share Price as of December 17: $2.7400
Number of Hedge Fund Holders: 27
Heron Therapeutics, Inc. (NASDAQ:HRTX) is a biotechnology business at the commercial stage. Heron’s product portfolio includes two cancer care medications and two acute care drugs. SUSTOL and CINVANTI are two of its cancer care products, whereas its acute care drugs are ZYNRELEF and APONVIE.
The U.S. Food and Drug Administration (FDA) authorized the injectable emulsion APONVIE (aprepitant) on September 16, 2022. APONVIE is anticipated to go on sale in the United States in the first quarter of 2023. This medication will likely boost the business’s revenue growth starting in Q1 2023. The cancer care division of Heron Therapeutics, Inc. (NASDAQ:HRTX) announced strong net product sales of $23.9 million for the third quarter of 2022, and the company is still on pace to meet its $93 million to $95 million full-year estimate. In addition, Heron reported $77.6 million in sales for the first nine months of 2022. Heron Therapeutics, Inc. (NASDAQ:HRTX) is one of the best under $5 stocks worth buying.
6. SomaLogic, Inc. (NASDAQ:SLGC)
Share Price as of December 17: $2.2600
Number of Hedge Fund Holders: 29
SomaLogic, Inc. (NASDAQ:SLGC) is a protein biomarker research and clinical diagnostics firm based in the United States. The healthcare technology firm has partnered with Molecular Genomics to offer its 7,000-plex SomaScan platform to Asia. Approximately 7,000 protein measurements may be conducted using SomaLogic on a single 55-microliter plasma or serum sample. More than 550,000 samples have been run by the business to date.
Over the past twelve months, the firm has attracted more than 50 new users on its platform. The main goal of SomaLogic, Inc. (NASDAQ:SLGC) is to expand its biosciences division. It will continue to make strategic investments in its global commercial organization to ensure they are well positioned to benefit from the immense opportunities in proteomics.
2023 looks promising as SomaLogic, Inc. (NASDAQ:SLGC) is safeguarding its healthy balance sheet and being prudent with its spending at the same time by concentrating its efforts on the most important life science possibilities.
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Disclosure: None. 12 Best Affordable Stocks to Buy Under $5 is originally published on Insider Monkey.