There are thousands of publicly-traded companies from which to choose. How can an investor possibly determine WHAT stocks to buy now – let alone the BEST stocks to buy now?
There is no clear consensus within the investment community regarding how to invest. Value investors look for stocks that appear cheap and undervalued with low price-to-earnings ratios. But some believe that this approach merely identifies stocks with overstated fundamentals and is not a good indicator of future appreciation potential. Growth investors look for companies with above average earnings, but there are no guarantees those higher levels of earnings can or will continue.
Which strategy — growth or value — is likely to produce higher returns over the long term? Each side can offer statistics to support its beliefs. Is either method better at determining what stocks to buy now? Some studies show that value investing has outperformed growth over extended periods of time. Value investors further argue that a short-term focus can often push stock prices to low levels, which creates great buying opportunities for value investors.
There is No Single Strategy for all Investors
The best way to learn – especially for beginning investors, is to experiment a bit. Try a number of strategies and approaches. Don’t worry if you don’t get it exactly right the first time. There are solid choices that won’t require you to put all your capital at serious risk.
Below, we’re going to look at five of the best stocks to buy if you’re new at investing. Remember, there are no guarantees. These are good stocks to buy – in our opinion, but they may or may not beat the market over the next year. More importantly, they offer a chance to own shares in different market sectors, all with very good upside potential.
Top 5 Stocks To Buy Now
Every investor wants top stocks to buy, but also loves to find a bargain. You know, cheap and undervalued stocks to buy at a bargain price. Our top 5 stocks to buy are considered cheap by their trade prices, but they look like bargains – poised for big potential advances. They just happen to currently trade for less than $5 a share. Remember, with prices this low, these stocks may be riskier than a DJIA blue chip. Keep the risks-versus-rewards in mind before making any final decisions. Disclaimers aside, here are five of the best cheap stocks to buy now for less than $5 a share.
Zynga (ZNGA) Mobile Gaming
Analysts expect Zynga to grow sales more than 14.4% this year and another 13.4% in 2019. On the earnings front, estimates call for 66% growth this year to 15 cents per share and another 33% in 2019. That prices ZNGA stock at about 26 times this year’s earnings. The company has more than $635 million in cash and short-term investments with no debt. Zynga is not be a blue-chip, but double-digit revenue growth with zero debt makes it very attractive to consider.
Gran Tierra Energy (GTE) Oil & Gas
GTE is a Canada-based energy company engaged in oil and gas acquisition, exploration, development and production. The Company focuses on onshore oil and gas properties in Colombia, and also own rights to oil and gas properties in Brazil and Peru. GTE’s shares used to trade in the $5 to $9 a share range (2010-2014), but share prices plunged with the global slump in energy prices four years ago. GTE now trades above $3 a share on the New York Stock Exchange. Although its share price is mostly influenced by oil prices, it has a low forward price-to-earnings ration of 8.6 and lists recent insider buying. This puts the $1.3 billion GTE at the top of our list of stocks to watch and consider.
Lloyds Banking Group (LYG) Financial
Is a leading UK based financial services group providing a wide range of personal and commercial financial services including retail, commercial and corporate banking, general insurance, and life, pensions and investment provision. This may be the single best stock below $5; with a market valuation of about $60 billion. LYG is currently a deep value play, trading at 0.87 times book and paying a 5 percent dividend. Profits rose 24 percent in 2017, and earnings per share jumped 36 percent in the first quarter.
United Microelectronics Corp. (UMC) Technology
Manufactures semiconductor wafers for other chip making companies. There are no extraordinary circumstances surrounding UMC. It appears almost “boring”, but this Taiwanese tech company is no “plain Jane. It has shown consistent, steady growth with top-line sales advancing about 2-4 percent a year. At approximately $5 billion in annual business, it is consistently if not modestly profitable. UMC is suing Micron Technology (MU) for patent infringement. A win could boost UMC stock, but the company is doing just fine without it.
Office Depot (ODP) – Dividend Stock
Office Depot provides a selection of products and services to consumers and businesses of various sizes. Office Depot presents a number of interesting elements to consider for a stock priced below $5. First, the office supplies chain is profitable – analysts expect revenue growth this year to be about 6 percent. Second, ODP pays a pretty sizable dividend of 4.2 percent. Third, this stock is cheap by a number of traditional measures, including forward P/E (6.9), price-sales (0.13), price-book (0.6) and price-free cash flow (4). Finally, one of Wall Street’s favorite hedge fund managers, David Einhorn, just bought 2.1 million shares of ODP in the first quarter through his fund, Greenlight Capital.
How to Buy Stocks
In order to buy stocks, you can either use an online broker, or appoint a full service stockbroker who is licensed to purchase securities on your behalf. If you plan to select stocks and manage your portfolio yourself, an online discount broker would save you significant commission expenses over full-service brokerage fees.
How To Buy Stocks Online
A quick search on the internet will identify dozens of online brokers for you to consider. All you need to do is select one and open an online investment account. Select the stock(s) you want to purchase and place an order. That’s it! Remember to check your investments and check your share positions regularly.
How To Buy Stock With a Full Service Broker
Traditional stockbrokers will sit down with you and get to know your personal investment goals and financial history. They look at factors such as: marital status, lifestyle, personality, risk tolerance, age (time horizon), income, assets, debts and more. Full-service brokers then work with you to develop a financial plan. This plan will be ideally suited to your investment goals and objectives. They can also assist with other financial issues such as estate planning, tax advice, retirement planning, budgeting and any other type of financial advice. These types of brokers are for those who want everything in one package. In terms of fees, they are more expensive than discount brokers. It is up to you to decide if a professional financial adviser by your side is worth the additional costs.
Stocks To Buy Now
Learn more about penny stocks and our top picks here