Investing in stocks publicly traded shares of companies remains one of the most effective ways to build wealth over time. While all investing carries risk, history shows that the stock market generally rises over long periods. Stocks allow investors to participate in a company’s growth and, more broadly, in the expansion of the economy.
Long-term success in equities comes from diversification and a disciplined approach. Prices fluctuate daily, but over time, stocks often outperform conservative options like government bonds or savings accounts.
Looking Beyond Price
Many investors focus on the stock’s current price when deciding what to buy. However, price alone doesn’t tell the full story. Factors such as a company’s financial health, projected revenue, earnings, and its position within the industry are all crucial to evaluate.
According to Steven Conners, founder of Conners Wealth Management, the best low-priced stocks are those with strong fundamentals but facing short-term setbacks. Conversely, cheap stocks without a clear path to improvement tend to be riskier.
Price-to-earnings (P/E) ratios can help determine value, showing how much you’re paying for each dollar of earnings. If a company has negative earnings, price-to-sales (P/S) ratios comparing price to revenue can be useful. Generally, lower P/E and P/S ratios indicate better value, though ideal ranges vary by sector.
Low-priced stocks can generate impressive returns with modest price increases, but they carry higher volatility. With careful research, these investments can be a rewarding part of a diversified portfolio.
1. Village Farms International Inc. (VFF)
VFF is an agricultural and cannabis-focused company operating greenhouse facilities in the U.S. and Canada. Its subsidiary, Balanced Health Botanicals, is a major player in the U.S. CBD market. The stock has soared this year, reflecting both high growth potential and increased volatility. VFF offers a way for investors bullish on cannabis to enter the market, with strong liquidity and trading volume.
2. E.W. Scripps Co. (SSP)
SSP is a diversified broadcast and media company with more than 60 stations across the U.S. Its flagship, the ION Network, reaches over 128 million households. The company focuses on local news and national programming, which has helped it thrive despite challenges in the traditional media industry. SSP has shown solid gains this year and may continue benefiting from its targeted audience and digital transitions.
3. GoPro Inc. (GPRO)
GoPro is a well-known tech company producing cameras, drones, and accessories. The company also offers subscriptions, which have grown steadily over the past few years. With a strong social media following and consistent trading volume, GPRO remains a liquid, affordable option for investors seeking exposure to consumer tech and lifestyle products.
4. Uranium Royalty Corp. (UROY)
UROY focuses on uranium, a key resource for nuclear energy. The company could benefit from shifts in energy policy and restrictions on Russian uranium imports. With high liquidity and rising demand for nuclear fuel, UROY offers investors a chance to participate in a specialized, high-potential sector.
5. Oncology Institute Inc. (TOI)
TOI is a U.S.-based cancer-care provider. Despite operating at a net loss, its stock has experienced rapid growth this year, driven by improved revenue and strong insider ownership. The company is expected to join key Russell indexes, which could further support its stock performance. TOI offers high upside potential but carries risk typical of smaller, fast-growing companies.
Stocks under $5 can deliver remarkable returns, but they come with higher volatility. By focusing on fundamentally strong companies and considering metrics like P/E and P/S ratios, investors can find affordable stocks with significant growth potential. As always, diversification and long-term planning remain key to navigating the risks.
Resources:
https://www.investing.com/
https://knowledgenexuses.com/
