Top Cheap Stocks To Purchase in 2020

Cheap stocks (a.k.a. penny stocks) are shares of small public companies. Their distinctive feature is their low price. This is where the name “cheap stocks” comes from. The definition of cheap stocks may vary in different countries. In the United States, penny stocks are the shares that traded at a price below 5 USD. In the UK, stocks below 1 GBP can be considered cheap stocks.

Penny stocks may be of particular interest to all types of investors as they may have huge hidden potential. This is why this type of asset is very popular among investors. However, before we get down to our list of the top cheap stocks to buy in 2020, we are going to list the eventual risks that you may encounter investing in penny stocks:

1. Low liquidity risks. Many of the cheap stocks are traded over-the-counter. This is the main reason for their liquidity to be insufficient. Why is this important? Low liquidity assets are harder to sell at the right time for market price. Another important aspect is the low trading volumes. This means that even small transactions may cause significant price fluctuations.
2. Limited historical data. The majority of penny stocks are issued by relatively young companies. They have limited historical data (revenues, operations, products). This increases the risks of investment in those stocks.
3. A small amount of public information. The companies issuing penny stocks are not required to report to the regulatory bodies. Those shares are not covered by professional experts from various financial institutions. You will always have a lack of information about those assets.

If you keep reading this, you will have some idea about investing in cheap stocks. This type of investment is risky, but it also has some major benefits that you should keep in mind. They are the following:

1. The major advantage of investing in penny stock is its low price. You don’t need to have large capital to purchase a bunch of those shares.
2. Another great advantage of those penny stocks is their availability for a wide range of investors. 
3. Penny stocks have larger price changes. They may grow in shorter intervals, which is a good opportunity not only for investors, but also for traders.

Those are the essential advantages of cheap stocks. The list may be continued by some other great benefits. However, we will stop here to start our list of the top cheap stocks to watch in 2020.

Sirius XM Holdings (Ticker: SIRI)

Historical Background

Sirius Satellite Radio was founded in 1990. Robert Briskman becomes the first CEO of the company. In 2008, there was a merger between Sirius and XM. This led to a near-monopoly of the holdings in the industry of satellite radio. In 2018, the holdings have been acquired by Pandora that has led to faster revenue growth. More than 100 million people around the globe listen to their audio products these days.

Why Should I Pay Attention to Sirius XM Stocks?

In 2019, the number of Sirius XM subscribers has increased by 1.1 million people. The total amount of users has reached 30 million. The company has a good strategy to cooperate with the representatives of the auto industry to pre-install its products in new cars. This strategy may support the growth of their business.

Financial Information

1. P/E Ratio – 31.46
2. EPS – 0.20
3. Market capitalization – 28.245 billion USD
4. Current Ratio – 0.29

Plug Power (Ticker: PLUG)

Historical Background 

This is a U.S. company, established in 1997 as a joint venture between DTE Energy and Mechanical Technology Inc. Plug Power applied for an IPO in 2002. In 2017, Plug Power has shipped its ProGen engines for the first time. Amazon has bought more than 50 million stocks of the PLUG the same year. In 2020, they have presented a brand new 125kW ProGen engine for different classes trucks.

Why Should I Watch for Plug Power's Stocks?

The company does its best to become the leader in its industry. According to the latest research, automakers are increasingly pursuing this fuel-cell technology. This may lead to an increase in the number of Plug Power customers in the future. If this happens, Plug Power stocks will grow in price as well.

Financial Information

1. P/E Ratio – N/A
2. EPS – -0.40
3. Market capitalization – 1.621 billion USD
4. Current Ratio – 1.56

Zynga (Ticker: ZNGA)

Historical Background

The company was established in 2007. In 2013, the Interactive Entertainment president of Microsoft, Don Mattrick, became a CEO ofZynga. It is worth to mention that the company had difficulties at that time. Unfortunartely, Don Mattrick was not able to bring success to the company and in 2014 the total number of users fell from 53 million to 28 million. In 2014, Zynga employs Alex Garden, a co-founder of Relic Entertainment and a former CEO of Microsoft's Game Studios. The company’s IPO took place in 2011.

Current situation

Zynga has had rough time in the past. The company had to change its executives several times. Zynga shares had a strong rally last year, but they are currently suffering from a correction. The price stays below 10 USD per share which is comfortable for those who want to invest in cheap stocks. The company has shown impressive revenue growth (+48% in total), which is Zynga’s all-time record for the moment. Zynga “feels” well even in the times of COVID-19 as people turn to mobile devices for entertainment.

Financial Information

1. P/E Ratio – 181.00
2. EPS – 0.05
3. Market capitalization – 8.656 billion USD
4. Current Ratio – 2.12

Dynavax (Ticker: DVAX)

Historical Background 

The company was established in 1996. This is a biopharmaceutical company, which is aimed at developing products to prevent and treat infectious diseases. The intellectual property of Dynavax includes 96 registered patents. They have also registered 16 trademarks.

Current situation

The price of DVAX stock has increased significantly in May due to the news about the vaccine against COVID-19. They have offered a vaccine that they have been used to treat hepatitis B. Company’s stock is hot now as Dynavax has announced that at least one of the firm’s partners is going to start testing of the COVID-19 vaccine by July 2020. The price of the stock has increased by 25% in 2020. It added 70% in May 2020, which is a very strong trend for the stock market. Even so, DVAX stock price remains below 10 USD making the shares attractive for the investors who want to add cheap stocks to their portfolios.

Financial Information

1. P/E Ratio – N/A
2. EPS – -2.38
3. Market capitalization – 704.998 million USD
4. Current Ratio – 4.94

Century Casinos (Ticker: CNTY)

Historical Background 

The company was established in 1992. Century Casinos was created by several executives of Casinos Austria. The company operates eleven casinos in different US states. They have expanded significantly their business since the launch of the company. For example, in 2010, they bought Silver Dollar Casino in Calgary, Canada. In 2019, they have purchased three casinos in Missouri and West Virginia. Century Casinos becomes the second smallest publicly traded resort and casino company on Wall Street.

Current Situation

Why do we have to pay attention to this firm? The answer is trivial – they have many casinos across the planet including the United States, Canada and Poland. Moreover, they are expanding their business continuously by purchasing more casinos. This helps them to increase their revenue. We expect the company to show even better results in the future.

Financial Information

1. P/E Ratio – 151.75
2. EPS – 0.04
3. Market capitalization – 179.526 million USD
4. Current Ratio – 1.11

Dasan Zhone Solutions (Ticker: DZSI)

Historical Background

This California based company was established in 1999. The founders of Dazan Zhone were former executives of Ascend Communications. The company made several acquisitions during the first ten years of its existence. In 2020, the executives of the Dasan Zhone decided to move to Texas. 

Current Situation

According to the company's CEO, Dasan Zhone is well positioned on the market to have advantages from the pandemic. According to the analysts, the stocks of Dasan Zhone may see a 40% growth in the nearest future. This is due to the high interest of 5G technologies.

Financial Information

1. P/E Ratio – N/A
2. EPS – -0.21
3. Market capitalization – 193.621 million USD
4. Current Ratio – 2.20

Identiv (Ticker:INVE)

Historical Background 

Identiv is another California-based company. It was founded in 1990. This global provider of physical security systems has many subsidiaries. They also produce software for network security. Identiv was formed as a combination of SCM Microsystems, Bluehill ID AG, and Hirsch Electronics. The company has managed to become one of the leaders in its industry.

Current Situation

The pandemic has significantly changed the landscape of the American job market. Many companies went online. This shift was a great opportunity for many to keep their jobs, but telework imposes many security problems. This is where Identiv comes into play with their security solutions. In particular, Identiv offers several mobile security solutions. The company looks promising and may get much better results in 2020.

Financial Information

1. P/E Ratio – N/A
2. EPS – -0.23
3. Market capitalization – 88.02 million USD
4. Current Ratio – 1.37

ADT (Ticker:ADT)

Historical Background

ADT was established in 1874. The HQ of the company is located in Florida, the U.S.A. In 1997, ADT was acquired by Tyco. In 2011, Tyco split into three companies and ADT re-appeared. In 2012, ADT issued stocks, which began trading on NYSE. In 2014, the company purchased Reliance Protectron Security Services from Canada. Even so, in 2016, ADT was purchased by Apollo Global Management.

Current Situation

The stocks of ADT have lost 75% during the coronavirus sell-off. Those stocks are not the best choice to buy today but experts predict the stock market to return to its pre-pandemic levels. This means that losses may turn into profits in the nearest future. Moreover, ADT has this opportunity to refinance debt at lower rates which is a great benefit for the company. The company currently focuses on automation, home, and mobile security.

Financial Information

1. P/E Ratio – N/A
2. EPS – -0.67
3. Market capitalization – 6.446 billion USD
4. Current Ratio – 0.89

B2Gold (Ticker: BTG)

Historical Background

The company was established in 2007 by Clive T. Johnson. Initial listing was done on the Toronto Venture Exchange. BTG managed to raise 100 million USD during the IPO. In 2008, the company stocks appeared on the Toronto Stock Exchange. In 2009, B2Gold bought Central Sun Mining company, which operated La Libertad mine in Nicaragua. In 2012, B2Gold purchased another mining company, CGA, with operation in Australia. In 2019, B2Gold established an annual record for gold production and revenues. 

Current Situation

The company has mining properties in many countries including Mali, The Philippines, Nicaragua, Burkina Faso, Namibia, and Colombia. The price of the stock almost doubled in the past five years but experts expect it to grow 20% in 2020. Gold is currently a hot asset due to the fall of stock markets. There are also great inflationary fears that will push gold even higher. With this in mind, gold as well as B2Gold can be a high-profit asset for 2020.

Financial Information

1. P/E Ratio – 91.25
2. EPS – 0.06
3. Market capitalization – 6.446 billion USD
4. Current Ratio – 0.89

Nokia Corp. (Ticker: NOK)

Historical Background 

Nokia is another centenarian in our list of cheap stocks. The company was established in 1865 in Finland. Even so, we know Nokia particularly for its telecommunication and mobile devices. In 2013, Microsoft announced the purchase of Nokia's mobile business. However, Nokia hasn’t left the mobile industry. They produced their next smartphone in 2017. This time it was based on Android.

Current Situation

Wall Street investors are expecting Nokia stocks to have an 8% growth in 2020. Moreover, experts expect a 30% profit growth in 2021. Nokia has seen a 14% sales growth in the past five years. They have a rather generous dividend program paying 8% of their revenue to the stockholders. It is to mention also that Nokia has overvalued status according to Yahoo.finance. 

Financial Information

1. P/E Ratio – N/A
2. EPS – -0.19
3. Market capitalization – 25.059 billion USD
4. Current Ratio – 1.34

Celsius Holdings (Ticker: CELH)

Historical Background

The company was established in 2004. It has it sown formula for the brand CELSIUS. Their corporate mission is to become the world’s leaders in their industry. Their main products are seven delicious non-carbonated flavors and in powder stick form. Their product line is kosher and vegan approved. 

Current Situation

Celsius stocks are considered to be the best option to buy when dealing with cheap stocks. The company makes health drinks under the main brand CELSIUS. The company’s sales had seen growth from 14.6 million to 75 million USD in 2015. According to the expert, the stocks of Celsius are likely to see a 50% growth in 2020.

Financial Information

1. P/E Ratio – 53.72
2. EPS – 0.18
3. Market capitalization – 669.931 million USD
4. Current Ratio – 4.42

Sequans Communications (Ticker:SQNS)

Historical Background

The company is famous in the world of telecommunications. It produces chips for 4G mobile technology. Its HQ is located in Paris, but it has offices across the globe. Sequans Communications was established in 2003 by Georges Karam. This specialist previously worked for Sagem, Alcatel Lucent, and Phillips. Sequans Telecommunications went public in 2011. The company was recognized by Verizon and partnered with them later. 

Current Situation

Sequans Communication was one of the leaders of 4G. The company is expected to be one of the pioneers of 5G as well. Many analysts are bullish when they talk about the company. Sequans website states that their chips are the best of the best. They are producing offerings for the Internet of Things. Moreover, their chips are designed for different purposes. 

There is only one issue. The pandemic has shed negative light on 5G. However, this negativity will not last forever. According to the analysts, the price may add over 65% to the current cost of the stock.

Financial Information

1. P/E Ratio – N/A
2. EPS – -1.60
3. Market capitalization – 130.985 million USD
4. Current Ratio – 0.97

Yahoo finance fair value indicator marks Sequans Communication stocks as overvalued.

SmileDirectClub (Ticker: SDC)

Historical background

The company was founded in 2014 by Jordan Katzman and Alex Fenkell. They are focusing their efforts on transforming human smiles and becoming popular in the United States. Smile Direct Club has managed to grow 6300+ employees and 391 shops across the United States. The volume of their services almost doubled from 2018 to 2019. The company issued its stocks in 2019. The IPO price was 23 USD, but the stocks soon corrected to 7.50 USD. 

Current Situation

SmileDirectClub has recently announced a partnership with Walmart. The huge retail network will sell oral care products. Experts predict overwhelming sales growth, which may significantly increase the company’s revenue this year. Analysts predict 200% growth of SmileDirectClub stocks.

Financial Information

1. P/E Ratio – N/A
2. EPS – -1.12
3. Market capitalization – 3.392 billion USD
4. Current Ratio – 3.54

Yahoo finance fair value indicator marks SmileDirectClub stocks as overvalued.

FS KKR Capital Corp (Ticker: FSK)

Historical Background

FS KKR Capital Corp was established in 2007. The company resides in Philadelphia, the U.S.A. It is a publicly-traded business development company providing credits to middle-sized companies in the United States. The BDCs were approved by the US Congress in the 1980s to help small and middle-sized businesses to get access to funding. There were some insider buys in 2020 showing that investors believe in this company.

Current Situation

Why is this company worth your attention? The current situation with the pandemic won’t last for long. Small and mid-sized companies will need capitals to develop and FS KKR’s services will be in demand in the foreseeable future. 

Financial Information

1. P/E Ratio – N/A
2. EPS – -1.08
3. Market capitalization – 1.99 billion USD
4. Current Ratio – 2.80

According to the Yahoo finance fair price indicator, the stocks of FS KKR are near the fair value.

Constellium (Ticker: CSTM)

Historical Background

Constellium was established in 2011. The company was created when Rio Tinto has sold Alcan Engineered Products to Apollo Management and FSI. CSTM stocks are traded on the NYSE. In 2018, the company delisted its stocks from Euronext. The company’s HQ is in Paris. It produces aluminum for various needs. The price of the shares of Constellium is down by almost 35% in 2020, which is worse than the broader market. 

Current Situation

CSTM stock price decline is primarly due to the situation with the partners of the company. Two biggest buyers of the Constellium products are Ford and Boenig, which were significantly hurt by the pandemic crisis. Anyway, the current price of the stock is very attractive. Once the pandemic ends, the industries are going to take off again and the price of Constellium stock is likely to rise above 10 USD per share.

Financial Information

1. P/E Ratio – 6.60
2. EPS – 1.45
3. Market capitalization – 1.317 billion USD
4. Current Ratio – 1.04

According to the Yahoo finance fair price indicator, the stocks of Constellium are significantly overvalued.

Ovid Therapeutics (Ticker:OVID)

Historical Background 

Ovid Therapeutics was established in 2014. It is a biopharmaceutical company, which has the main focus in developing impactful medicine for the people having rare neurological disorders. They are developing a drug for Angelman symptoms. 

Current Situation

Biotech companies are currently looking strong. The company gives positive updates on its OV935 drug development. The company has no medicine on the market yet, but clinical trials are worthy of optimism. As long as this optimism continues, the price of the stock is likely to go up. According to the analysts, the price of the stock is likely to have 260% growth in the next 12 months.

Financial Information

1. P/E Ratio – N/A
2. EPS – -1.47
3. Market capitalization – 289.649 million USD
4. Current Ratio – 6.08

According to the Yahoo finance fair price indicator, the stocks of Ovid Therapeutics are significantly overvalued.

Vonage (Ticker: VG)

Historical Background

Min-X company was founded in 1998. This was a voice over IP exchange. In 2001, they changed their name to Vonage Holdings Corp. in 2005, they changed location and moved to Holmdel. The company’s business expanded to Canada in 2004 and to UK in 2005. The IPO took place in 2006. The company’s stock has lost 20% in 2019, but gained 33% in the beginning of 2020. 

Current Situation

The industry, where Vonage is operating is currently in great demand. The analysts predict the stock price to gain 23% in 2020 despite the pandemic. 

Financial Information

1. P/E Ratio – N/A
2. EPS – -0.09
3. Market capitalization – 2.628 billion USD
4. Current Ratio – 0.86

X4 Pharmaceuticals (XFOR)

Historical Background

The company was established in 2010 in the United States. X4 Pharmaceuticals develops therapeutics to treat several immune diseases as well as oncological problems. The team behind the project has great experience in biopharmaceutical product develpments. XFOR has offices in Austria and the United Stated. This is a worldwide company. 

Current Situation

X4 Pharmaceuticals works in the immune field, which is relevant in the current climate of the COVID-19 pandemic. They are developing therapeutical drugs against primary immunodeficiency. Mavorixavor, developed by the company is currently at the stage 3 of clinical studies, which is a positive sign for XFOR. Analysts expect the price to reach 27 USD within the next 12 months.

Financial Information

1. P/E Ratio – N/A
2. EPS – -3.30
3. Market capitalization – 141.548 million USD
4. Current Ratio – 15.34

The stock price is considered to be overvalued according to the Yahoo finance fair value indicator.

Nomura Holdings (Ticker: NMR)

Historical Background

The company began its history in 1925 with the establishment of Nomura security. Nomura’s HQ was in Osaka. In 1961 the company became public. They bought most of Lehman Brothers Asian operations in 2008. In order to change the focus of the company, the HQ moved from Tokyo to London in 2009. 

Current Situation

Nomura’s famous competitor is Goldman Sachs as the bank conducts the same operations. Even so, Nomura stocks are traded for modest value of 4 USD (and even cheaper), Nomura is a true Japanese giant with 14+ billion capitalization level. They offer high dividend level (7%) and stability to the investors.

Financial Information

1. P/E Ratio – 16.63
2. EPS – 0.27
3. Market capitalization – 14.041 billion USD
4. Current Ratio – 1.37

The stock price is considered to be overvalued according to the Yahoo finance fair value indicator.

This is our watchlist of cheap stocks for 2020. As you can see, there are famous names accompanied with some dark horses that may shine one day. Analysts have optimistic projections about the majority of those companies, while Yahoo finance fair price indicator shows that most of them are currently overvalued.