Five Stocks Under $5 to Buy Now

Low-priced stocks can present immense opportunities if purchased at the right time. Several factors affect stock prices, including broader market disruption, negative news, bad quarters, or temporary product failures. Even slight delays in product launches can knock down stock prices, as can technical trading run amok, presenting a great opportunity for buyers who know when to pounce on declines.

Low-priced stocks do not necessarily equate to low-market cap companies and greater risk, as the stock price is a combination of number of shares in circulation and market cap. Nonetheless, low-priced stocks may also have an undeserved reputation among inexperienced investors as being too volatile to invest in.

In this article we will share 5 of the best under-$5 stocks which you can buy now. These stocks have huge potential for growth in the future, which is why they’re extremely popular among the collection of top hedge funds in our database, which includes many of the 140 Biggest and Most Famous Activist Hedge Funds in the world. Read on to find out what stocks made the list.

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1. Avon Products, Inc. (NYSE:AVP)

Avon is a New York-based company which sells beauty and personal care products. Last month, Avon shares lost a lot of value amid a disappointing fourth quarter report. Avon’s revenue declined by 2.4% during the period to $1.57 billion, while analysts’ were expecting revenue of $1.61 billion. However, investment firm Jefferies reiterated its ‘Buy’ rating on the company, along with a price target of $8, suggesting nearly 100% upside potential. The firm thinks that Avon’s valuation is compelling and that its long-term goals are achievable. A total of 31 hedge funds tracked by Insider Monkey were bullish on Avon Products, Inc. (NYSE:AVP) heading into 2017, owning 12.7% of the company’s shares.

2. Office Depot Inc (NASDAQ:ODP)

Office Depot Inc (NASDAQ:ODP) recently posted upbeat results for its fourth quarter and fiscal year 2016, though the market has been rather tepid towards the stock this year. The office supplies retail company posted sales of $2.73 billion for the fourth quarter, versus the FactSet consensus of $2.70 billion, while EPS of $0.11 was also above the Street’s forecast of $0.10. Full-year sales of $11 billion were down by 6% from 2015. Office Depot’s new CEO Gerry Smith said in a statement that he has developed a three-year ‘strategic plan’ for profitability improvement and shareholder returns. A total of 31 hedge funds tracked by Insider Monkey were long Office Depot Inc (NASDAQ:ODP) as of the end of the fourth quarter, with their positions valued at over $277 million.

3. SUPERVALU INC. (NYSE:SVU)

SUPERVALU INC. (NYSE:SVU) is trading at new lows and presents an attractive bargain. The Minnesota-based retail company’s earnings per share in its fiscal third quarter came in at $0.05, on $3 billion in revenue, worse than the Street’s projections of $0.13 in EPS and $3.79 billion in revenue. SUPERVALU’s CEO Mark Gross said in a statement that the sale of its Save-A-Lot supermarket business in the fourth quarter will help the company grow its business and operations. In January, RBC Capital analyst William Kirk reiterated his ‘Buy’ rating on SUPERVALU INC. (NYSE:SVU) and said that the company’s macro trends are beginning to improve. As of the end of the fourth quarter, 29 hedge funds in our database were long SUPERVALU INC. (NYSE:SVU), including Cliff Asness’ AQR Capital, which owned 2.64 million shares on December 31.

5 Stocks Under $10 Set to Soar

DELAFIELD, Wis. (Stockpickr) --  There isn't a day that goes by on Wall Street when certain stocks trading for $10 a share don't experience massive spikes higher. Traders savvy enough to follow the low-priced names and trade them with discipline and sod risk management are banking ridiculous coin on a regular basis.

Just take a look at some of the monster movers to the upside in the under-$10 complex from Wednesday, including China Shengda Packaging  (CPGI), which exploded higher by 40.7%; Oragenics  (OGEN), which soared higher by 38.6%; Andatee China Marine Fuel  (AMCF), which spiked sharply higher by 35%; and Opexa Therapeutics  (OPXA), which ripped higher by 24.9%. You don't even have to catch the entire move in lower-priced stocks such as these to make outsized returns when trading.

Low-priced stocks are something that I tweet about on a regular basis. I frequently flag high-probability setups, breakout candidates and low-priced stocks that are acting technically bullish. I like to hunt for low-priced stocks that are showing bullish price and volume trends, since that increases the probability of those stocks heading higher. These setups often produce monster moves higher in very short time frames.

When I trade under-$10 names, I do it almost entirely based off of the charts and technical analysis. I also like to find under-$10 names with a catalyst, but that's secondary to the chart and volume patterns.

With that in mind, here's a look at several under-$10 stocks that look poised to potentially trade higher from current levels.

China Ming Yang Wind Power Group

One under-$10 industrial goods player that's starting to trend within range of triggering a near-term breakout trade is China Ming Yang Wind Power  (MY - Get Report), which designs, manufactures, sells, and services megawatt-class wind turbines in the People's Republic of China. This stock has been exploding to the upside over the last three months, with shares sharply higher by 49%.

If you take a glance at the chart for China Ming Yang Wind Power, you'll see that this stock has been uptrending a bit during the month of June, with shares moving higher from its low of $3 to its recent high of $3.29 a share. During that uptrend, shares of China Ming Yang Wind Power Group have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed this stock within range of triggering a near-term breakout trade above some key overhead resistance levels.

Market players should now look for long-biased trades in shares of China Ming Yang Wind Power if it manages to break out above some near-term overhead resistance levels at $3.29 to around $3.40 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action 983,275 shares. If that breakout hits soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $3.64 to $3.82 a share, or even its 52-week high of $3.88 to $4.34 a share.

Traders can look to buy this stock off weakness to anticipate that breakout and simply use a stop that sits just below some key near-term support levels at 3.06 to $3 a share. One can also buy shares of China Ming Yang Wind Power off strength once it takes out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Must Read: 5 Foreign Stocks to Trade for Gains

Aeterna Zentaris

Another under-$10 specialty biopharmaceutical player that's starting to trend within range of triggering a near-term breakout trade is   (AEZS - Get Report), which engages in developing and commercializing novel treatments in oncology, endocrinology, and women's health. This stock has been smacked lower by the sellers over the last three months, with shares off by 42%.

If you take a look at the chart for Aeterna Zentaris, you'll notice that this stock has been consolidating a bit over the last few weeks, with shares moving between 26 cents on the downside and 33 cents on the upside. Shares of Aeterna Zentaris have started to spike higher right above some near-term support levels at 27 to 26 cents per share. That spike is quickly pushing this stock within range of triggering a near-term breakout trade above some key overhead resistance levels.

Market players should now look for long-biased trades in this stock if it manages to break out above some key near-term overhead resistance levels at 30 to 31 cents per share and then above 32 to 33 cents per share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action 3.12 million shares. If that breakout hits soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at 40 cents to its 50-day moving average of 46 cents, or even 50 to 55 cents per share.

Traders can look to buy this stock off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at 27 to 26 cents per share. One can also buy shares of Aeterna Zentaris off strength once it starts to clear those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

7 Energy Stocks to Buy for Under $5

While nominal price typically doesn’t mean much when it comes to actual value, stock prices generally don’t make it into sub-$5 territory without a good reason.
This is a perceived death blow for many smaller energy stocks. Many small-cap energy firms that operate in more expensive-to-drill shale formations, and that have heavier debt loads, have sold off hard, pushing their share prices down. In many cases, they’re trading for Great Recession prices.For energy firms, that reason has been a huge plunge in crude oil and natural gas prices. Abundant supplies have been met with dwindling demand, and that has caused crude oil to drop about 50% from its peaks.

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If you’ve got some money designated for riskier investments to burn … well …

These exploration companies serve as some of the main providers of new hydrocarbon supplies by finding new deposits and bringing them into production. Major producers see these junior discoverer corporations as a way to add to their overall reserves, and often partner with or simply buy these mid-tier producers — sometimes at a high premium.

Are they risky? Sure. But that’s how you reap outsized rewards.

Top 10 Stocks for 2015: FREE Buy List. Click here to download.

So, in no particular order, here’s a look at seven energy stocks to buy for less than $5 a pop.

Energy Stocks to Buy for Under $5: Goodrich Petroleum Corporation (GDP)

Price as of 4/30: $3.87

As the low oil price took told, it hit Goodrich Petroleum Corporation(NYSE:GDP) especially hard. The firm’s stock price fell from a peak around $30 during the summer down to just $3.87 today. That huge drop could be attributed to GDP’s main area of operation — the Tuscaloosa Marine Shale.

The Tuscaloosa Marine Shale is one of the most underdeveloped shale fields in the country and mirrors the Eagle Ford in terms of geology. Early estimates of the field show that the reserve potential is huge — with more than 7 billion barrels. And GDP owns the most acreage by far in the field.

The problem is drilling in the Tuscaloosa Marine Shale is expensive — as in, it’s the most expensive field in the country. Costs per well range in the $13 million mark. You need higher oil prices to make the field even worth drilling. So despite great success with its initial test and prospecting wells, GDP has run into problems.

Still, the field is prolific, and Goodrich really is the only pure player left in town. If oil prices do come back, the Tuscaloosa Marine Shale (and GDP stock) will come roaring back too.

And any larger energy firm that wants in on the action could easily just swallow Goodrich with a lucrative buyout offer.

Energy Stocks to Buy for Under $5: Rex Energy Corporation (REXX)

Price as of 4/30: $5

It’s not just oil prices that have been falling. Natural gas and natural gas liquids (NGLs) have been taken to the woodshed as well.

And as a producer of these energy commodities, Rex Energy Corporation (NASDAQ:REXX) has dropped from a high of $20 per share down to … OK, right at the $5 mark, not under it.

Assets were never the problem at REXX; the firm has premier holdings in the Marcellus, Utica and other Appalachian basin shales. The problem was the hefty amount of money required to obtain and drill on those assets.

Debt ballooned at REXX, and while bankruptcy wasn’t a near-term issue, the recent fall in natural gas and oil prices didn’t calm investors.

However, a new deal helps remove much of that risk altogether. REXX has partnered with ArcLight Capital Partners LLC to form a joint venture to develop natural gas wells in Pennsylvania. The JV will help reduce REXX’s capex and bring in some much-needed cash. At the same time, the firm has managed to renegotiate the terms of its credit facility to be a tad more favorable toward the energy stock.

As such, REXX can focus solely only drilling and not have to worry about keeping the lights on.

Energy Stocks to Buy for Under $5: Swift Energy Company (SFY)

Price as of 4/30: $3.02

For investors looking for a potential lotto ticket among energy stocks, Swift Energy Company (NYSE:SFY) could be it at $3 per share.

Swift’s growth story has never been all that exhilarating. The firm’s core asset base — the Eagle Ford and Louisiana — are just OK. Not big enough to get excited about, but nothing so small that it’s not worth noticing.

The problem is that among those confines, SFY has a huge debt problem. The company’s last annual report showed a whopping $1.01 billion — about eight times its current market cap.

And still, SFY might be worth a salvage mission.

The firm has cut capex spending by more than 75%. That will help it save much-needed cash and potentially pay down some of that large debt burden. As for that debt, none of it is due until 2017 and 2022. That gives SFY plenty of time for oil prices to come back before it even needs to think about bankruptcy proceedings.

For investors, buying SFY stock is basically a lotto ticket on whether oil will recover enough by 2017 to make Swift shares rise.