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10 Best Cheap Stocks For 2026
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Best Cheap Stocks to Buy Today
Methodology
Traditionally, so-called “cheap” stocks are those trading at $5 or less. These stocks are closer to gambling than investing, as often there is a reason for these stocks to have lower valuations. Because of that we adjusted our screening criteria and raised the cutoff to stocks priced at $30 or less.
The following best cheap stocks to invest in all trade on a major U.S. stock exchange and meet the following criteria:
- Member of the S&P 500 index. While the S&P 500 index is often used as a broad view of the U.S.’s economic health, the famed benchmark includes many large-cap companies, which tend to be less volatile.
- Stock price is less than $30. Most stocks priced at under $30 tend to be issued by small-cap or mid-cap companies. The stocks selected on this list are issued by established companies with a market capitalization of at least $10 billion.
- Consensus analyst recommendation of “buy” or better. A strong number of Wall Street analysts’ “buy” ratings indicates an expectation the stock will outperform the overall market.
- Forward earnings multiple less than 25. This metric can be used to find a good stock valuation based on the stock’s projected future earnings.
- Positive projected EPS growth. Analysts expect EPS growth over the next five years.
To learn more about our rating and review methodology and editorial process, check out our guide on how Forbes Advisor rates investing products.
Under $5 is not a desirable range for a stock to be selling in, because many stocks selling in that range have been driven to low share values because the firms have performed poorly.
– Robert R. Johnson, professor of finance at Heider College of Business at Creighton University in Omaha, Nebraska
How To Find Cheap Stocks
Using a stock screen to find a few good deals based on some of the analyst ratings and fundamental criteria is just one way to identify stocks with growth potential. When looking for cheap stocks, it’s important to do your own due diligence and research.
For Forbes Advisor’s best cheap stocks to buy, we used market capitalization as a parameter to screen out companies that might be a bit more volatile. We also only focused on companies listed in the S&P 500. That ensures that we’re just targeting relatively more stable large-cap stocks in our selection.
This approach doesn’t mean that mid-cap or small-cap stocks aren’t worth considering. But in the screen that we chose, large capitalization was used to filter volatility. While this is not a perfect system, comprehensive stock research involves delving into the reports and digging deep into each company.
Cheap stocks are generally cheap for a reason … the business isn’t doing well and their prospects are bleak. The stock market is typically well ahead of the situation, so if a stock is cheap because there are more sellers than buyers, there’s usually a good reason for that.
– Craig Kirsner, financial advisor and president of Kirsner Wealth Management in Coconut Creek, Florida
How To Buy Cheap Stocks
To buy cheap stocks, you first need to open a brokerage account. Once you have opened and funded a brokerage account, you’ll need to do some research. To identify “cheap” companies, you’ll look for stocks that have positive underlying business fundamentals, with attractive valuations.
Once you’re ready to place orders to buy your stocks of choice, make sure to use limit orders. This ensures your trade is executed at or below a specific price.
Buying Penny Stocks
We deliberately excluded penny stocks for a number of reasons. Penny stocks typically have a market capitalization of $300 million or less. So, these are microcap companies. It’s not unusual for these companies to trade for less than a dollar and to be listed over the counter—known as OTC stocks. So, you’re not talking about stocks that necessarily trade on the NYSE or Nasdaq Composite.
Penny stocks tend to be more illiquid, making it more difficult to buy stocks and sell them quickly.
(An) important risk consideration is the fact that penny stocks have limited trading volumes. In other words, once you choose to sell – there is no guarantee that there will be a buyer on the other side, and vice versa.
– Arie Brish, adjunct business professor at St. Edward’s University in Austin, Texas
Penny Stocks With High Volume Trading
To identify penny stocks with the strongest momentum right now, we applied a screen that includes only companies above microcap threshold. Specifically, we selected stocks with a market capitalization greater than $50 million, but less than $300 million. So, we excluded smaller microcap companies as well as larger small cap companies. In addition, all companies included in this screen have an average daily trading volume (ADTV) of at least 500,000. Having an ADTV greater than 500,000 indicates liquidity, being able to buy and sell your position, as well as stronger market interest.
The table below highlights the penny stocks showing the largest positive daily price changes based on this criterion.
Alternatives To Buying Cheap Stocks
You don’t have to limit yourself to low- priced stocks to begin your investing journey. There are plenty of brokerages that allow you to purchase fractional shares of individual stocks or funds.
A fractional share represents a portion of a single share. So, it allows you to invest in a specific dollar amount rather than purchasing the full share itself. For example, if a stock is trading for more than $500 per share, you can choose to invest in just $100 and own a fraction of that stock.
A popular example of a brokerage that offers fractional shares is Charles Schwab. It offers fractional shares through a program called Schwab Slices. But that program isn’t limited to Schwab, as many major brokerages now support fractional and sharing investing.
Below is a list of top brokerages and whether they support fractional share access or OTC stock trades. Oftentimes if you’re buying a penny stock, you’ll likely need a brokerage that supports OTC trades.
| Brokerage | Fractional Shares | OTC Trading |
|---|---|---|
|
Yes
|
Yes
| |
|
Yes
|
Yes
| |
|
Yes
|
No
| |
|
Yes
|
Yes
| |
|
Yes
|
Yes
| |
|
Yes
|
No
| |
|
Yes
|
No
| |
|
Merrill Edge
|
Yes
|
Yes
|
|
SogoTrade
|
No
|
Yes
|
|
TradeStation
|
Yes
|
No
|
See the full rankings here: Best Online Brokerages and Trading Platforms 2026
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Frequently Asked Questions (FAQs)
Can I invest in the stock market with little money?
Most popular online brokerages have zero account minimums. That means you can start buying cheap stocks no matter how much money you have in your account.
Even if you don’t have enough money to buy a share of pricier stocks, such as Blackrock, KLA Corp. or Costco Wholesale, there are plenty of brokers that offer fractional share investing. Fractional shares allow you to buy a partial share of stock for less than the cost of a single share.
What factors should I consider when evaluating cheap stocks?
Just because a stock has a low share price does not mean its shares are attractively valued. You should also consider the quality of a cheap stock’s business and its valuation based on fundamental metrics, such as P/E, price-to-sales (P/S) and price-to-book (P/B) ratios.
What are the potential advantages of investing in cheap stocks?
You can buy a relatively large number of shares if a particular stock has a lower share price. Most financial advisors will tell you penny stocks are akin to gambling, so you’ll want to allocate a very small portion of your investment portfolio to cheap stocks – some suggest as low as 1%.
In other words, only invest as much as you can afford to lose (because of the riskier nature of these stocks).
“Penny stocks are extremely volatile because any small move, up or down, is (a) very significant percentage. If the stock price is 5 cents, any one cent move is 20% of its value,” Brish says.