There is a natural appeal to owning cheap stocks. No one wants to overpay for stocks in their portfolio. And if you have $10,000 to invest, it is much easier and more satisfying to buy many shares of a company’s stock rather than just a handful at around $500 per share.
However, cheap stocks do not mean scraping the bottom of the barrel. If you know how to identify stocks with the best potential to outperform the market over the next few months, you can find amazing value in the right low-cost stocks.
This is where the Portfolio Grader comes in. My free tool assigns each stock a grade from “A” to “F” based on earnings history, stock performance, sentiment, buying momentum, and other factors. Investors looking for good cheap stocks can find solid opportunities with an “A” or “B” grade, ensuring that there is real strength behind these low prices.
However, a word of caution: Some of these stocks have very low market capitalizations and are considered penny stocks. This means they lack the resources that larger blue-chip companies have to recover from setbacks. Additionally, when you’re dealing with emerging companies with low market caps, there’s always a risk of being acquired by a bigger player.
So, consider these cheap stocks carefully and understand that they may carry additional volatility that you wouldn’t find in more established names. But if you’re willing to take the risk, these affordable stocks have strong potential.
7 Cheap Stocks to Watch:
| Ticker | Company Name | Price (as of last update) |
|---|---|---|
| BBAI | BigBear.ai | $2.44 |
| OCEA | Ocean Biomedical | $6.64 |
| CDIO | Cardio Diagnostics | $3.91 |
| CTRM | Castor Maritime | $0.79 |
| MTC | MMTec | $1.20 |
| AMAM | Ambrx Biopharma | $8.92 |
| ALT | Altimmune | $4.22 |
BigBear.ai (BBAI)
BigBear.ai (NYSE: BBAI) is a promising defense contractor that appears to be punching above its weight. Headquartered in Maryland, the company has a market cap of under $300 million but has already secured a $900 million contract as a major supplier to the U.S. Air Force.
BigBear’s end-to-end data analytics platform leverages artificial intelligence and machine learning to provide insights to clients. Investors are betting that BigBear’s superior AI-driven solutions will help it expand its government portfolio and maintain strong revenue growth.
However, holding BBAI stock can be a challenge. The stock fell nearly 40% last month, but it also delivered massive gains in early 2023, surging about 200% year-to-date. If you take a position in BBAI, you’re hoping there is more room for upside.
Ocean Biomedical (OCEA)
Ocean Biomedical (NASDAQ: OCEA), based in Providence, Rhode Island, is a biotech company focused on developing treatments for lung cancer, brain cancer, pulmonary fibrosis, and malaria.
The company is funded by $123.9 million in grants for research. OCEA stock surged over 32% in early March after the company announced progress on its malaria drug candidate.
As a result, the stock moved out of the penny stock category, rising above $7 per share. Analysts are optimistic, with EF Hutton and Fundamental Research Corp. initiating coverage on OCEA with “Buy” ratings.
Meanwhile, Portfolio Grader gives OCEA a “B” rating.
Cardio Diagnostics (CDIO)
Cardio Diagnostics (NASDAQ: CDIO) is a personalized medicine company that began trading in October after merging with a special purpose acquisition company (SPAC). However, its stock has dropped below half its opening price.
The company uses an integrated genetic-epigenetic engine to develop personalized treatment options for patients with cardiovascular disease or at risk of developing it. It has already secured patents in the U.S. and Europe, and recently China granted intellectual property protection, expanding its market potential.
If Cardio Diagnostics can build momentum and deliver solid earnings, its current price could prove to be a bargain.
CDIO stock has a “B” rating from Portfolio Grader.
Castor Maritime (CTRM)
Unlike other biotech and AI-driven names on this list, Castor Maritime (NASDAQ: CTRM) is a global shipping company.
Based in Cyprus, Castor Maritime specializes in the sea transportation of dry bulk vessels around the world.
The importance of a strong supply chain became evident during the COVID-19 pandemic, when companies struggled to obtain raw materials, leading to long delays for consumers.
Shipping companies have benefited from the rising demand for goods, and Castor Maritime delivered strong Q4 earnings. Revenue rose to $69.3 million from $60 million the previous year, while EPS doubled from Q4 2021.
With CTRM stock trading under $1 per share, Portfolio Grader assigns it a “B” rating.
MMTec (MTC)
MMTec (NASDAQ: MTC) operates within the financial industry, running a platform used by Chinese hedge funds, mutual funds, investment advisors, and brokerage firms.
Its system enables these firms to trade securities on global exchanges efficiently.
⚠ Warning: This is an extremely small-cap publicly traded company with a market cap of just $3.5 million. Its Q4 revenue was only $366,000, a 41% increase from the previous year.
Despite its small size, MMTec stock has seen huge volatility. Some trading days in the last month saw 49% gains or 35% losses in a single session.
If you’re a risk-tolerant investor, this could be an interesting play.
MTC stock holds a “B” rating from Portfolio Grader.
Ambrx Biopharma (AMAM)
Ambrx Biopharma (NASDAQ: AMAM) is another biotech stock, focusing on precision-engineered cancer treatments using a strong genetic code platform.
Its pipeline includes drugs designed to treat prostate cancer, lung cancer, ovarian cancer, multiple myeloma, non-Hodgkin’s lymphoma, and leukemia.
Like many biotech firms, Ambrx faces the challenge of high R&D costs. It recently raised $78 million by selling 16.5 million shares, which should provide enough funding through 2025.
AMAM stock is up over 300% this year and has earned a “B” rating from Portfolio Grader.
Altimmune (ALT)
Altimmune (NASDAQ: ALT) is a clinical-stage biopharma company based in Maryland, developing treatments for obesity, non-alcoholic steatohepatitis (NASH), and hepatitis B.
Its obesity drug Pemvidutide recently completed a Phase 2 trial with 320 participants, showing an average weight loss of 7.3% to 10.7% over 24 weeks.
With obesity rates rising, Altimmune’s drug could become a game-changer.
ALT stock has fallen around 70% this year, but investors are betting on its potential rather than its recent performance.
Altimmune holds a “B” rating from Portfolio Grader.
These 7 cheap stocks could offer strong upside potential, but they also come with risks due to market volatility and small market caps. Investors should weigh these factors carefully before making a decision. 🚀
