Best cheap stocks to buy under $5 in 2021

| May 26, 2021

In my experience, looking in the right places is the key to finding valuable investing opportunities. Finding cheap stocks under $5 requires looking at smaller and riskier companies, the majority of which remains undiscovered or unrecognised by the mass population. While searching for cheap stocks to buy, the majority of the options may not seem like an attractive investment today. But they are a long-term investment that requires patience and a longer holding period.

Here I have compiled a list of Best Cheap Stocks under $5, which will become part of my investment portfolio for the current year:

Cheap stocks #1: Express Inc

Express (NYSE:EXPR) is a modern, versatile, dual-gender apparel and accessories brand. The company operates over 500 retail and factory outlet stores in the United States and Puerto Rico and also runs an online store. Express is amongst those companies which have been negatively affected by the pandemic. It has reported comparatively lower sales and profits in the year-end 2020.

On the other hand, the apparel and accessories brand announced has tremendously improved its liquidity through rent abatements, deferrals, and future rent reductions. To further strengthen its balance sheet, Express has entered into a definitive loan agreement with Sycamore Partners.

Moreover, they also plan to grow their digital channel to $1.0 billion in 2024. Keeping in line with the change in the shopping patterns of the consumer, I believe these developments are expected to take the firm’s share price to new higher levels. Of course, suppose it fails to meet expectations. In that case, there could be considerable volatility in the share price of this cheap stock.

Next is Nokia Corporation

Nokia Corporation (NYSE:NOK) is a Finnish telecom and consumer electronics company founded in 1865. Today it is recognised as one of the largest mobile phone manufacturers in the world.

Nokia’s key earning source and strength are its networks. In network infrastructure, it holds the industry-leading FP4-based products. It is developing transformational cloud-native 5G core solutions for CSPs and Enterprise customers in cloud and network services. And in Mobile Networks, the firm holds the worldwide 5G speed record, with Elisa and Qualcomm. Further ahead this year, Nokia announced that its Nuage Networks will be used by China Mobile Cloud for nationwide deployment of its public cloud service.

I consider Nokia amongst those cheap stocks that can outperform, despite the high level of competition. And given the rollout of 5G has only started, I believe it will continue to climb over the long term.

And finally BioDelivery Sciences International Inc

BioDelivery Sciences International Inc. (NASDAQ:BDSI) is a North Carolina-based pharmaceutical company developing and commercialising drugs for chronic conditions. The new addition of BELBUCA, an opioid-containing drug, has fueled up the company’s performance. In 2020, the company reported a 40% increase in net revenue.

With life returning to normality and patients returning to the physician’s offices, the company foresees an increase in the prescription of this drug, leading to improved financials.

However, it is worth noting that BELBUCA currently represents nearly 90% of the firm’s revenue stream. As its competitors are pursuing their own versions of this drug, should they receive approval from regulators, it could substantially impact BioDelivery’s primary source of income.

According to my research, the post-pandemic period will lead to better company performance, despite the risks. And generally, improved underlying performance typically results in a higher share price over the long term, especially for cheap stocks.

Is it time to buy these Cheap Stocks?

The above-listed companies have had a versatile stock and company performance in the previous years. In my opinion, the current on-goings of each company will have a multi-fold positive impact in the long run. Despite having their own unique risks, I think these cheap stocks could deliver enormous long-term growth for my portfolio. Therefore, I am including them in my list of Best Cheap Stocks to buy in 2021. But only time will tell if I am right.

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Saima Naveed does not own shares in any of the companies mentioned. The Money Cog has no position in any of the companies mentioned. Views expressed on the companies and assets mentioned in this article are those of the writer and therefore may differ from the opinions of analysts in The Money Cog Premium services.

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