The S&P 500 popped on the final day of March to end a rough quarter on an upbeat note. The benchmark still fell 6% in Q1, with the Nasdaq down over 10%. Tariff uncertainty and a wave of profit-taking following a stellar run off the market’s 2022 lows drove the downturn.
Wall Street began the second quarter struggling to find direction and waiting to see what Trump’s April 2 tariff updates will look like.
No one knows what is just around the corner. What we do know is that the Nasdaq has dropped from some of its most overheated RSI levels in the past 20 years to roughly neutral. On top of that, the outlook for earnings growth remains strong and the Fed is projected to cut interest rates twice more in 2025.
This backdrop should give long-term investors confidence to buy into the downturn and the uncertainty.
Today we explore how to find great cheap stocks trading for $10 a share or less that investors might want to buy in April.
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 70 highly-ranked names trading under $10 a share that made it through the screen today…
Buy This Cheap, Soaring Stock and Hold Forever?
Rolls-Royce RYCEYis a historic engine maker at the cutting edge of complex power and propulsion solutions for aircraft, ships, and beyond. Rolls-Royce is utilizing its expertise in nuclear propulsion systems to design cutting-edge small modular nuclear reactor (SMR) technology and micro-reactors.
Zacks Investment Research
Image Source: Zacks Investment Research
Rolls-Royce is successfully revamping and streamlining its business to boost profitability after a disappointing decade. Former oil industry executive Tufan Erginbilgic took over as CEO in January 2023. RYCEY grew its operating profit by 55% in 2024 on 16% higher sales. It is now well ahead of schedule on Rolls-Royce’s goal of quadrupling profits by the end of 2028.
The engine giant reinstated its dividend and rolled out a share buyback program. On top of that, the firm is looking to expand its reach into the larger narrowbody aircraft segment. RYCEY is projected to grow its revenue by 19% in 2025 and 8% in 2026 to help boost its adjusted earnings by 27% and 19%, respectively. Rolls-Royce’s earnings estimates continue to climb, helping it land a Zacks Rank #2 (Buy).
Zacks Investment Research
Image Source: Zacks Investment Research
Rolls-Royce shares have soared over 650% in the past three years. At $10, RYCEY still trades 49% below its Average Zacks price target of $14.60 a share. On the valuation front, Rolls-Royce trades in line with its 10-year median and near its industry at 28.4X forward 12-month earnings.
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.
Click here to sign up for a free trial to the Research Wizard today.
Want more articles from this author? Scroll up to the top of this article and click the FOLLOW AUTHOR button to get an email each time a new article is published.
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
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
