While most financial advisors will probably steer you away from under $5 stocks, they have their benefits. Just like in football – the American kind – you can't just run up the gut.
Well, technically, you can. That's where the phrase three yards and a cloud of dust basically originated. If you hold onto the ball and keep marching down the field, you eat up the clock and deny opportunities to your opposition. However, the problem with this rather unimaginative strategy is that stuff happens.
And that stuff – the unpleasant kind – puts your portfolio against the eight ball. To right the ship, you may need to take calculated risks. These volatile but compelling companies just might get the job done. With that, below are under $5 stocks to consider.
EV stocks: A close-up shot of a ChargePoint charging station.
Source: YuniqueB / Shutterstock.com
Speaking about unpleasant stuff, I'm going to go full-on risk mode at the start with ChargePoint (NYSE:CHPT). One of the arguably popular names among under $5 stocks, the problem of course is that it's been under a Lincoln for several months now. During CHPT's heyday, its equity unit featured an average price above a Jackson.
And that's not the worst of the company's problems. Instead, with a full-blown price war erupting in the underlying electric vehicle space, individual companies have struggled badly. Unfortunately, the pressure spilled over into the charging infrastructure domain, leaving CHPT stock limping.
To be quite blunt, the EV sector seems a minefield at the moment. However, if I had to bet on one of the related under $5 stocks, I might throw some pocket change at ChargePoint. With an infrastructure play, you're selling tickets to the game, not wagering on a specific team to win it all.
Despite the obvious risks, analysts rate shares a consensus moderate buy. Also, the price target lands at $3.26, implying over 58% upside potential.
B2Gold (BTG)
b2gold (BTG) logo on a web browser enlarged by a magnifying glass
Source: Pavel Kapysh / Shutterstock.com
At first glance, precious metals mining company B2Gold (NYSEAMERICAN:BTG) doesn't seem particularly inviting. Sure, technically speaking, it's one of the under $5 stocks. However, in the past 52 weeks, the security lost 23% of its market value. Further, the negative acceleration has been acute. For example, in the trailing one-month period, BTG slipped more than 12%.
Financially, though, the company offers a very enticing framework. According to investment data aggregator Gurufocus, BTG enjoys 10 positive signs. These elements include a strong balance sheet, broad financial strengths, and a high Piotroski F-Score, which implies solid value. Even better, B2Gold – at least according to Gurufocus – shows no warning signs, whether moderate or severe.
Also, it's worth noting that BTG trades at only 9.6X trailing-year earnings. That's noticeably lower than the sector median value of 15.47X. Fundamentally, if the economy rises, advanced sectors – including EVs – will require increased supplies of precious metals.
Analysts peg shares a consensus strong buy with a $4.27 average price target, projecting over 69% upside potential.
Cipher Mining (CIFR)
Concept art of crypto mining with little figuring and a Bitcoin token.
Source: Shutterstock
Seemingly everyone is going gaga for cryptocurrencies. Don't forget, folks, I helped InvestorPlace readers onto this ship early. Anyways, the situation with virtual currencies is that the underlying sector features unique challenges. From lost passwords to cyberattacks to entire exchanges crumbling due to ownership running Ponzi schemes, the arena is a minefield.
That's where Cipher Mining (NASDAQ:CIFR). It's not a cryptocurrency but rather a crypto-mining enterprise. Long story short, mining involves the decentralized competitive process that govern supply trends for individual cryptos. Therefore, CIFR should enjoy some forward correlation to the price of benchmark digital assets.
To be sure, CIFR doesn't exactly correlate to cryptos. And blockchain enterprises have their own concerns to deal with that are independent of crypto pricing dynamics. Still, if you want a public security that offers exposure to the ecosystem, CIFR ranks among the popular under $5 stocks.
Analysts see good things ahead, rating shares a unanimous strong buy. Also, the price target soars to $6.33, implying 81% upside potential.
VAALCO Energy (EGY)
Rise in gasoline prices concept with double exposure of digital screen with financial chart graphs and oil pumps on a field. Oil prices and oil price predictions
Source: Golden Dayz / Shutterstock.com
To be quite blunt, VAALCO Energy (NYSE:EGY) seems destined for a date with irrelevance. Yes, EVs are struggling as I mentioned earlier. However, futurists agree that mobility belongs to the realm of electric-powered vehicles. Further, with innovations such as electric vertical takeoff and landing (eVTOL) aircraft, a company like Vaalco – which specializes in hydrocarbon exploration – seems anachronistic.
Nevertheless, the world continues to run on oil. Moreover, for EVs to fully integrate themselves into society, public infrastructure must accommodate them. While projects are building out this accommodation, the reality is that the current framework overwhelmingly supports combustion-powered cars. And it's quite possible that the future of mobility may first involve advancements in combustion technology rather than a wholesale pivot to EVs.
Combine this dynamic with harsh geopolitical realities and suddenly, Vaalco seems much more relevant. What's more, with a price tag of $4.29 as of Tuesday's close, it qualifies as one of the under $5 stocks. Analysts view shares as a moderate buy with an $8.62 price target, just over double their present value.
Planet Labs (PL)
Global network of map points
Source: Blue Planet Studio/Shutterstock.com
An earth-imaging enterprise, Planet Labs (NYSE:PL) organically attracts attention as one of the under $5 stocks. With so much attention paid to the space economy, the sector enjoys a strong narrative. However, narratives alone don't sustain market performances. Sadly, stakeholders of PL stock learned this the hard way, with shares stumbling 53% over the past 52 weeks.
Even worse, the company has suffered about a 78% negative return since its public market debut. Understandably, such a magnitude of loss represents a clear signal to get out. However, as a speculative play, PL stock could potentially ride coattails on the renewed interest in space exploration. For example, Intuitive Machines (NASDAQ:LUNR) was also struggling in the market until strong fundamental developments lifted sentiment.
In my opinion, the same could happen to Planet Labs because the underlying business of orbital imaging offers myriad relevancies. From civilian to defense applications, various operators require a broad view of the matter – quite literally.
Analysts rate shares a strong buy with a $4.71 price target, projecting over 112% growth potential.
Wag! Group (PET)
a puppy and a kitten sniggling together. represents pet stocks
Source: Shutterstock
A pet care company – if you didn't notice by its name – Wag! Group (NASDAQ:PET) offers a technology platform to connect pet owners with independent pet professionals for on-demand and scheduled dog walking, training and other pet care services through a mobile application. In some ways, it's the ride-sharing app for dogs.
It's an intriguing idea for under $5 stocks. Since the January opener, PET stock jumped nearly 26%. However, it's trying to make up for lost time (and value). Since its public market debut, shares have lost more than 77%, inclusive of this year's auspicious performance.
Looking at its financials, at the moment, Gurufocus notes that PET's three-year revenue growth rate stands at 90.5%. As the law of large numbers weighs on the business, you shouldn't expect this trend to last. However, the top line is moving at a solid clip.
Blurred hospital images, Patient bed in the hospital, Hospital cleaning, Hospital disinfection cleaning, Patient bed cleaning for emergency patients. Medical Properties Trust (MPW)
Source: venusvi / Shutterstock.com
I bought call options on Accuray (NASDAQ:ARAY) – a medical technology firm specializing in oncological radiotherapy – so I have a vested interest in how well it does. So, take whatever I say with a grain of salt. Despite my bias, though, Accuray appears awfully compelling. Through its radiation therapy, the company can potentially deliver effective life-saving treatments.
According to its website, the underlying radiotherapy regimen commands over 25 years of clinical evidence. As Zacks Equity Research points out, the firm is upbeat on ARAY stock as the underlying business has been registering robust customer adoption over the past few months. Globally, management revealed that it witnessed strong demand for system installations.
Further, the radiation oncology market reached a valuation of $9.37 billion last year. Experts project that the space can expand at a compound annual growth rate (CAGR of 12.3% to 2030. At the forecast culmination point, the sector may print revenue of $21.14 billion.
Analysts see nothing but upside for ARAY stock, rating shares a unanimous strong buy. Also, the price target lands at $8.57, implying about 221% upside potential. It's one of the under $5 stocks – which is why I'm betting on it.
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On the date of publication, Josh Enomoto held a LONG position in ARAY. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.
