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The best cheap stocks in the world right now include plenty of names in America. However, it is increasingly more difficult to find good investments with a low share price in the domestic market.
Sure, you can find lots of cheap stocks to buy under $10 … but many of those companies have been punished for good reason and aren't worth your money.
When putting together my list of the best cheap stocks in the world, I focused on companies that have outperformed year-to-date and have stable businesses that operate in the black or at least are in spitting distance of breakeven. I also focus on cheap stocks under $10 a share that still are good bargains based on earnings history.
Lastly, while I'm eager to look anywhere in the world, I demand companies have a $300 million market cap or higher to ensure these aren't microcaps that can be subject to incredible volatility on no news.
You should always tread lightly when buying cheap stocks, since these companies are off the beaten path and often include plenty of risks. However, if you time it right, you can make a bundle by buying the best cheap stocks before they gap up.
Here's my list of the best cheap stocks in the world, featuring plays in Brazil, Russia, Mexico and elsewhere:
Best Cheap Stocks in the World: Avid Technology (AVID)
Market Cap: $360 million
Share Price: ~$9.20
Forward P/E: 5.8
YTD Performance: +26% vs. 6% for the S&P 500
Before we get to some of the international names on the list of the best cheap stocks to buy now, I have to highlight Massachusetts' own Avid Technology, Inc. (NASDAQ: AVID ).
There are few places you'll find a stock with this many bullish factors in its favor. AVID has outperformed the market nicely so far in 2016 but is still comfortably under $10 a share. It also is packing 8% revenue growth this year, and will see earnings more than double. Despite this fundamental improvement in 2016, however, AVID stock still trades for a bargain basement price-to-earnings ratio.
As a communications technology company involved with cable TV, internet publishing, live concerts and other media applications, Avid is seeing strong growth. And it's not just a robust business - it's a potential acquisition target as it continues to succeed.
Best Cheap Stocks in the World: Banco Bradesco (BBD)
Market Cap: $51 billion
Share Price: ~$8.90
Forward P/E: 9.8
YTD Performance: +86%
Brazil continues to suffer from political and economic unrest, but investors by and large seem to think the worst is over and brighter days are ahead.
The iShares MSCI Brazil Index ETF (NYSEARCA: EWZ ) is one of the best-performing country funds in 2016 with 60%-plus returns, but the major Brazilian bank Banco Bradesco SA (ADR) (NYSE: BBD ) has outperformed this diversified ETF by virtue of being a direct play on the financial sector.
Even after this big rebound after a year-and-a-half of pain, however, Banco Bradesco remains one of the best cheap stocks to buy now. As more consumers and businesses see their finances improve, BBD stock will continue to improve.
Buying a big financial stock, especially in an emerging market, has its risk. But the bargain price-to-earnings ratio sweetens the deal a bit.
Best Cheap Stocks in the World: First Bancorp (FBP)
Market Cap: $1.1 billion
Share Price: ~$4.90
Forward P/E: 12
YTD Performance: +51%
From one troubled region's bank to another, we now move to Puerto Rico's First Bancorp (NYSE: FBP ) as one of the best cheap stocks to buy now.
Unlike Brazil, which has struggled under massive governmental corruption, Puerto Rico actually enjoys association with the might of the U.S. government and protection from Congress. The problem, however, is that high unemployment and constant migration to mainland America has made Puerto Rico's debts unmanageable and its economy stuck since 2011.
But at the end of June, the passage of a debt relief bill showed legislators finally willing to help the island nation. FBP stock has rallied strongly as a result on the news, and is now at a new 52-week high on optimism that Puerto Rico could be turning around.
Best Cheap Stocks in the World: Career Education (CECO)
Industry: Educational and Professional Services
Market Cap: $455 million
Share Price: ~$6.70
Forward P/E: 166
YTD Performance: +84%
Let's pivot back to the domestic now. The Obama administration and Department of Education has inflicted pain on for-profit educational companies, the most recent being ITT Educational Services, Inc. (NYSE: ESI ), which has become a cheap stock (under $1 per share) for some very bad reasons .
Given this, Career Education Corp. (NASDAQ: CECO ) may seem like a bad bet.
However, this stock has soared as the "diploma mills" in the for-profit ed space have been punished … while CECO picks up their scraps. Career Education Corp. is less aggressive in its marketing, has requirements like a 2.0 GPA for any graduate school applicants and is more focused on vocational training like criminal justice or gerontology. So CECO may be a for-profit company, but it is smaller and more scrupulous than its peers.
Career Education Corp. is seeing some pain, yes, but it's still profitable - and based on recent performance, investors think this is one of the best cheap stocks to buy now under $10 a share.
Best Cheap Stocks in the World: Grupo Simic (SIM)
Market Cap: $1.5 billion
Share Price: ~$9.20
Forward P/E: 0.9
YTD Performance: +38%
Grupo Simec SAB de CV (ADR) (NYSEMKT: SIM ) is a Mexico-based steel company that primarily makes automotive equipment including axles and wheel hubs. It's not a glamorous business, but it's one that has been booming lately as strong auto sales have been a feature of the U.S. economy for the last two years.
Vehicle sales hit a record in 2015 , and halfway through 2016, the industry was expecting the pace of sales to top even last year's high-water mark. This naturally means strong demand for the Mexican manufacturer thanks to its relationship with automakers north of the border.
SIM continues to see both its profits and revenue march steadily higher, and this cheap stock is currently bumping against its highest levels since 2014. So don't delay, because it won't be cheap much longer.
Best Cheap Stocks in the World: CYS Investments (CYS)
Industry: Real Estate
Market Cap: $1.3 billion
Share Price: ~$8.80
Forward P/E: N/A
YTD Performance: +24%
A currently unprofitable company dealing in mortgage paper may not be at the top of your list of investments. But mortgage real estate investment trust (mREIT) CYS Investments Inc (NYSE: CYS ) is actually one of the best cheap stocks to buy now based on the potential for share price appreciation and a juicy double-digit dividend yield.
For starters, let's acknowledge that for all the doom and gloom out there, it is quite good to be involved in the housing market in 2016. By any measure, prices continue to rise. Median home prices shot past pre-recession levels to new all-time highs. National home prices were up 5.7% in June, according to CoreLogic - an even faster rate of appreciation than the 5.3% rate in May and the 5.4% rate in April. New home sales have powered to a seven-year high on strong demand.
Also, let's remember that a low-interest-rate environment is great for mortgage paper-pushers like CYS. And while there's lots of talk about liftoff, the world is not exactly getting tighter on rates - if anything, they are only going lower.
So bet against a 10%-yielding REIT that has doubled the market with share appreciation year-to-date if you like. But me? I'm taking a close look at CYS as one of the cheap best stocks to buy now.
Best Cheap Stocks in the World: Mobile TeleSystems (MBT)
Market Cap: $7.2 billion
Share Price: ~$8.10
Forward P/E: 10.0
YTD Performance: +37%
Keeping with the international theme throughout this list is Mobil'nye Telesistemy PAO (ADR) (NYSE: MBT ) - a Russian telecom simply known as Mobile TeleSystems, or even more simply known as MTS.
As with the investments in Puerto Rico and Brazil, Russia's MBT is one of the best cheap stocks to buy now because of past pessimism that is giving way to future optimism. With a super-low P/E and a dividend yield north of 7% (though that is, admittedly, a biannual payout that can be volatile), there is a lot to like about this Russian stock.
Sure, the nation is very oil-dependent and Vladimir Putin is not exactly loved by the West. However, the country continues to push into the wireless and internet age and MBT stock has a big role to play.
And based on Wall Street's response to this cheap stock over the past few months, the worst seems to be in the rear-view mirror.
Best Cheap Stocks in the World: 1-800-Flowers.com (FLWS)
Industry: Flowers & Gifts
Market Cap: $610 million
Share Price: ~$9.30
Forward P/E: 16.3
YTD Performance: +28%
Whether you see flowers as a nice discretionary purchase or a chore centering around commercialized holidays like Valentine's Day, blooms are a part of life (and death, since they decorate many a funeral).
With the power of the 1-800-Flowers.Com Inc (NASDAQ: FLWS ) brand and a redirect from the ultimate Flowers.com web address, it's easy to understand why this portal continues to make a pretty penny by partnering with greenhouses and flower delivery services nationwide.
The company had a hard 2015, but it's back on the path to growth and is approaching a new 52-week high following quarterly earnings last week saw a quarterly loss in-line with estimates.
Unsurprisingly, the bulk of the profits come around the holidays, so don't read too much into the short-term. The long-term continues to show improving sales and revenue for this cheap stock.
Best Cheap Stocks in the World: Enova International (ENVA)
Industry: Online Financial Services
Market Cap: $330 million
Share Price: ~$9.60
Forward P/E: 7.9
YTD Performance: +45%
Enova International Inc (NYSE: ENVA ) is a modest-sized provider of online financial services to "non-prime" consumers and small businesses. In short, this means it provides credit to people that may not exactly be the best borrowers.
There is assuredly risk in this group, as evidenced by the roughly 70% plunge in Enova since its 2014 highs. However, in the current low-interest rate environment and in a ho-hum economy that continues to muddle through, this cheap stock still has plenty of room to operate at a profit.
ENVA has put on quite a show in 2016 with over 40% gains year-to-date, and investors worried about a downturn may actually find comfort in a company that provides credit to those who need it .
It's sad but true, but if things sour for low-income Americans, then they turn to lenders like Enova to bridge the gap.
Best Cheap Stocks in the World: Cliffs Natural Resources (CLF)
Market Cap: $1.4 billion
Share Price: ~$5.70
Forward P/E: 15.5
YTD Performance: +260%
After bankruptcy fears dissipated after strong earnings reports from Cliffs Natural Resources Inc (NYSE: CLF ), the stock has been on a tear in 2016. Admittedly, commodity stocks still face pressure from a current environment that features a slowing China and a comparatively strong dollar.
But the worst is certainly over for Cliffs.
The company has obviously seen better days; five years ago, CLF stock traded for about $100, and now it trades for about $6. However, the best cheap stocks to buy aren't $6 stocks that have a chance to get to $60 (or $100) … but rather, they're investments you think can "just" deliver 20%, 30% or even 50% gains in short order.
That's still quite achievable for Cliffs in 2016 from these prices, even after its run.
Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor's Guide to Finding Great Stocks . Write him at firstname.lastname@example.org or follow him on Twitter via @JeffReevesIP . As of this writing, he did not hold a position in any of the aforementioned securities.
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