Beat the Market

The 10 Highest-Rated Stocks Under $10

For each of the high-rated companies trading below $10 a share there is a success story to be told. For investors, though, it's more important to know how well these businesses are growing than what exactly they do.

One company works in the arcane parts of the microchip manufacturing process. Another provides specialized document services to architects and engineers. And there's one firm whose equipment helps computer systems connect with each other.

Investors are smart to focus more on how the companies are growing their sales and profits. Seven of the 10 companies on this list have three-year sales growth rates of at least 17%. Some are as high as 58% or 136%. The three-year earnings per share growth rates of some companies top 25%. Some have lower growth rates of 15% or even less, although some of these are early in their development.

The key point is that strong growth is a principal reason these companies can rank among the top-rated stocks.

To compile this list, IBD searched for the stocks priced under $10 that have the highest IBD performance ratings. Specifically, the list shows stocks with the highest Composite Ratings, which combine the five IBD Ratings into a comprehensive figure. Secondarily, the stocks were sorted by earnings growth (measured by IBD's Earnings Per Share Rating).

The results, compiled using Custom Screen Wizard at, are from Wednesday, Nov. 30.

But bear in mind that historically, low-priced stocks have gone on to higher-priced ones. Research by IBD found the most successful stocks are typically priced over $15 a share when they begin their major advances.

Institutional investors normally avoid cheap stocks because they lack the liquidity major investors look for. Without the huge buying power of mutual funds, insurance firms, pension funds and other major investors, it's pretty hard for a stock to make a meaningful, sustained advance. Often, spikes in low-priced stocks are short-lived.

Back to Beat the Market: The 10 Highest Rated Stocks Under $10.

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This list was generated from a computer database and is the result of parameters selected and filtered by Investor's Business Daily, Inc (IBD). The information and data on this page are provided by IBD for informational purposes only and not as a recommendation to invest. All information and data were obtained by IBD from sources believed by IBD to be reliable; however, no guarantee is made or implied with respect to accuracy or completeness. The information and data contained herein are subject to change by IBD without notice, and IBD, its parent company, sister companies, subsidiaries, employees, officers, agents, or representatives may from time to time have long or short positions or may acquire direct or indirect beneficial interest in securities mentioned or those not so mentioned. Yahoo! has not reviewed, and in no way endorses the validity of the information and data provided by IBD on this page. Neither Yahoo! nor IBD is liable for any errors or delays in the data and information on this page, or for any actions taken in reliance thereon. By accessing the Yahoo! site, a user agrees not to redistribute the information found therein.
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