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5 Cheap Stocks Under $10 to Buy for December Heading into 2020

All three major U.S. indexes surged over 1% through morning trading Friday on the back of strong U.S. jobs data. U.S. employers added 266,000 jobs in November, which crushed economists’ estimates of 187,000. Meanwhile, overall unemployment fell to 3.5%, which matched its 50-year lows.

Despite the ongoing U.S.-China trade uncertainty, the upbeat jobs report is likely to give Wall Street a boost. Therefore, some investors might want to take this time to find a few cheap stocks to add to their portfolios.  

Here at Zacks, we try to avoid labeling stocks as “cheap” or “expensive.” Instead, look beyond a stock’s face value. When searching for these lower-priced stocks, we still look for similar trends in growth, value, and momentum. Then we apply the Zacks Rank to properly analyze the potential that these companies have.

Today we found five stocks, with the help our Zacks Stock Screener, that are currently trading for under $10 per share and sport a Zacks Rank #2 (Buy) or better that investors might want to buy in December heading into 2020…

MFA Financial, Inc. MFA

Prior Close: $7.69 USD

MFA Financial is a real estate investment trust or REIT mostly engaged in investing, on a leveraged basis, in residential mortgage assets such as mortgage-backed securities. The firm is coming off back-to-back bottom line beats and MFA stock has climbed 15% in 2019. Our current Zacks estimates call for MFA’s full-year sales to jump 7.3% and 7.2%, respectively, in fiscal 2019 and 2020. Meanwhile, its adjusted earnings are projected to pop 13.2% and 6.5% during this same stretch.

MFA is currently trading at 9.4X 12-months Zacks earnings estimates, which marks a discount against its own three median and its industry’s 16.6X average. Plus, the firm’s dividend yields a whopping 10.40% at the moment. And this isn’t artificially inflated since the stock is up 7% in the last 12 months and has moved relatively sideways for nearly five years. MFA is a Zacks Rank #2 (Buy) right now.

B2Gold Corp BTG

Prior Close: $3.73 USD

B2Gold, which was founded in 2007, operates three gold mines and is in the midst of multiple exploration and development projects from Colombia to Mali. BTG stock is up 30% in the last six months and 41% in the past two years. The Vancouver, Canada-headquartered firm topped our Q3 estimates in early November and it also declared its first quarterly dividend of $0.01 per share. B2Gold’s longer-term positive earnings estimate revision activity helps it hold a Zacks Rank #2 (Buy) at the moment.  

BTG also sports an “A” grade for Growth and a “B” for Value in our Style Scores system. On top of that, B2Gold is part of our Mining – Gold industry that rests in the top 18% of our 253 Zacks industries. The company’s adjusted full-year earnings are projected to jump 44% in 2019 and another 68% in 2020 to reach $0.39 per share. Plus, the company’s 2020 sales are projected to soar 23% above our current-year estimate, which calls for a slight dip, to hit $1.48 billion.

Tesco PLC TSCDY

Prior Close: $8.92 USD

Tesco is a UK multinational grocery and retail powerhouse that has seen its stock price jump 21% in 2019 and 13% in the past three years. The firm currently holds a dividend yield of 2.29%, which tops the 10-year U.S. Treasury note’s 1.83% payout. Tesco is also part of an industry that rests in the top 35% of our more than 250 Zacks industries, and TSCDY holds an overall “A” VGM score, supported by an “A” grade for Value and a “B” for Growth.

Overall, the company’s adjusted full-year earnings are projected to jump nearly 11% on 9.2% stronger sales. Next year, Tesco’s bottom line is expected to expand by another 8.2% on 1.4% higher revenue. Tesco is a giant that is projected to pull in over $80 billion in revenues this year and next, which puts it right at the level of U.S. titan Target TGT. Investors should also note that Tesco recently became the first major British supermarket chain to offer a subscription customer loyalty program, in an effort to further fight off discount encroachment.

NeoPhotonics Corporation NPTN

Prior Close: $7.51 USD

NeoPhotonics designs and makes optoelectronic solutions utilized in high-speed communications networks across telecom and datacenters. The San Jose, California-based company easily topped our quarterly estimates at the end of October. And NeoPhotonics’ core business should continue to expand as datacenters become more important in the cloud computing age. Plus, NPTN shares have skyrocketed 120% since June 2019 from under $4 per share to their current price point.

NPTN rocks “A” grades for Growth and Momentum. And NeoPhotonics’ full-year fiscal 2019 sales are expected to jump 9%, with 2020 expected to come in 7% higher. NPTN’s consensus fiscal 2019 earnings estimate jumped from -$0.15 to break-even after it reported its Q3 2019 results, with its 2020 estimate up 33% to $0.24 per share. This bottom-line positivity helps NeoPhotonics earn a Zacks Rank #1 (Strong Buy) at the moment.

TrueCar, Inc. TRUE

Prior Close: $4.83 USD

TrueCar, as its name might suggest, is a digital automotive marketplace that hopes to give consumers access to more comprehensive pricing information. The firm operates its own branded site and has a nationwide network of more than 16,500 certified dealers and also powers car-buying programs for the likes of AARP and Sam's Club WMT. The stock has been on a wild ride since it went public in 2014, and 2019 had been rough on TRUE until it topped our bottom-line estimates in early November.

TRUE shares have surged 32% in the last month. The company’s 2019 sales are projected to dip marginally and it is expected to post a loss of -$0.06 per share. However, peeking ahead, TrueCar’s fiscal 2020 sales are projected to jump 6.5% above our current year estimate and its earnings are expected to climb closer to break-even. TRUE is currently a Zacks Rank #2 (Buy) that holds a “B” grade for Momentum in our Style Scores system. Plus, it rests in an industry that sits in the top 30% of our more than 250 Zacks industries.

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TrueCar, Inc. (TRUE): Free Stock Analysis Report
 
NeoPhotonics Corporation (NPTN): Free Stock Analysis Report
 
B2Gold Corp (BTG): Free Stock Analysis Report
 
MFA Financial, Inc. (MFA): Free Stock Analysis Report
 
Walmart Inc. (WMT): Free Stock Analysis Report
 
Target Corporation (TGT): Free Stock Analysis Report
 
Tesco PLC (TSCDY): Free Stock Analysis Report
 
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