What are the cheapest stocks to buy under $5?

Here’s a little bit about each of the best cheap stocks to buy under $5, along with some key Morningstar metrics. All data is through Oct. 9, 2023. The cheapest stock on our list of the best stocks to buy below $5, Hanesbrands is trading 81% below our fair value estimate of $19.70.

Is a $5 stock a cheap stock?

Stocks that trade under $5 are considered cheap stocks. But unlike stocks under $10 or stocks under $20, stocks under $5 are in a separate category. The Securities and Exchange Commission (SEC) considers stocks that trade under $5 to be penny stocks. Yes, these are often the best cheap stock to buy even if they’re called “penny stocks”.

Should you buy stocks under $5?

Searching for quality stocks under $5 is a lot like bargain hunting. Low prices allow you to buy these stocks in large quantities without stretching your wallet. The payoffs can be huge, but so can the volatility when stock prices are relatively low. This is why the best stocks to buy now cheap must be monitored carefully.