Just because something is low cost, doesn’t necessarily mean its bad, nor does it signal a bargain. When it comes to stock prices, it’s an investor’s job to determine if the low price is the fair price, or if shares are being unfairly valued. One definitive upside to a low price stock is that a small price increase equals a big percent change relative to their high priced peers. If a stock bought at $2 goes up to $4, that’s a 100% percent change. Similarly, if it falls from $4 to $2, you’ve lost 50% of your investment. Risk works both ways.
An investor with limited funds may find that low-price stocks make it easier to diversify a portfolio. Instead of purchasing shares of one firm priced at a higher rate, the prospect remains to buy shares of multiple companies if that price is cheaper. Below are 4 stocks that are priced below $10, offer dividend yields between 2-10% (a sign of profitability, and capped at 10% for stability), and market cap above $300 million: 1. PDL BioPharma, Inc. (PDLI), 2. World Wrestling Entertainment Inc. (WWE), 3. Hot Topic Inc. (HOTT)and 4. AEGON N.V. (AEG).
Source: Kapitall
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Undervalued Dividend Stocks Under $10
Posted by D4L | Wednesday, June 20, 2012 | ArticleLinks | 0 comments »________________________________________________________________
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