How to Find Great Cheap Stocks Under $10 to Buy in October

The S&P 500 jumped to fresh highs on Monday and the Nasdaq’s climb put it on the cusp of its July peaks. The strong start to the week came after JPMorgan and other Wall Street giants kicked off earnings season on a high note.

See the Zacks Earnings Calendar to stay ahead of market-making news. 

The upbeat start to earnings season helped raise the outlook for total S&P 500 earnings growth.

More volatility could come down the road, especially with the election around the corner.

Still, the bullish backdrop of solid earnings growth and lower interest rates should propel investors to keep buying stocks.

Today we explore how to find great cheap stocks trading for $10 a share or less that investors might want to buy in October.

On top of their cheap price tags, Wall Street analysts are high on all of these stocks and their improving earnings outlooks earn them strong Zacks Ranks.

Penny Stocks

One dollar or less used to be the common threshold for what we call “penny stocks.” Today, the SEC has expanded penny stocks to securities that trade for less than $5 a share. Many investors avoid these stocks because they are speculative in nature.

Meanwhile, penny stocks often trade infrequently and hold wide bid/ask spreads. These stocks also carry many other traits that, in many cases, cause excessive volatility. With that said, some penny stocks perform incredibly well, which helps them remain attractive.

Stocks Under $10

Moving on, let’s briefly discuss the next class of cheap stocks. Stocks that trade in the $5 to $10 range are generally less risky than their penny stock counterparts. Investors might be more likely to have heard of these companies or seen the tickers. They are, however, still inherently more speculative than many other higher-priced stocks.

Investors can obviously find winning stocks for under $10 if they are extremely selective. So today, we narrowed the list of thousands of these more speculative stocks down to a more manageable group of $10 and under stocks that might help boost your portfolio.

Screen Parameters

• Price less than or equal to $10

• Volume greater than or equal to 1,000,000

• Zacks Rank less than or equal to 2

(No Holds, Sells or Strong Sells.)

• Average Broker Rating less than or equal to 3.5

(Average Broker Rating of a Hold or Better.)

• # of Analysts in Rating greater than or equal to 2

(Minimum of at least two analysts covering the stock.)

• % Change F1 Earnings Estimate Revisions -- 12 Weeks greater than or equal to 0

(Preferably upward earnings estimate revisions, but definitely no downward revisions.)

Here is one stock out of the nearly 50 highly-ranked names trading under $10 a share that made it through the screen today…

Why Soaring Amneal Pharmaceuticals is a Cheap ‘Strong Buy’ Stock

Amneal Pharmaceuticals, Inc. (AMRX) develops, males, and distributes a wide-ranging portfolio of over 280 generic and specialty pharmaceuticals. The New Jersey-based firm is expanding across a broad range of complex product categories and therapeutic areas, including injectables and biosimilars. Meanwhile, Amneal Pharmaceuticals’ branded pharmaceuticals are centered around central nervous system and endocrine disorders.

Amneal Pharmaceuticals crushed our adjusted earnings per share estimate in the trailing four quarters. The company raised its full-year 2024 guidance last quarter, “driven by broad-based growth.” Amneal Pharmaceuticals also highlighted the approval of CREXONT for Parkinson’s disease.

Image Source: Zacks Investment Research

Amneal Pharmaceuticals is projected to grow its revenue by 15% in 2024 and 4% next year to reach nearly $3 billion. The company’s improving earnings outlook helps AMRX earn a Zacks Rank #1 (Strong Buy).

AMRX stock has climbed 45% YTD and still trades 11% below its average Zacks price target at $8.80 a share. Amneal Pharmaceuticals also trades miles below its 2015 peaks.

Four of the five brokerage recommendations Zacks has for Amneal Pharmaceuticals are “Strong Buys.” Amneal Pharmaceuticals trades at a 33% discount to the Zacks Medical sector.

Get the rest of the stocks on this list and start looking for the newest companies that fit these criteria. It's easy to do. And it could help you find your next big winner. Start screening for these companies today with a free trial to the Research Wizard. You can do it.

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Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

Disclosure: Performance information for Zacks’ portfolios and strategies are available at: www.zacks.com/performance_disclosure

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AMNEAL PHARMACEUTICALS, INC. (AMRX): Free Stock Analysis Report

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