7 top stocks under $5

In a hot market where the popular names can cost hundreds of dollars a share, the real potential may be in stocks that go for less than five bucks.

By Money Staff May 16, 2013 4:04PM
Odyssey Marine Exploration; Sirius XM Radio Copyright Odyssey Marine Exploration; Cindy Ord/Getty ImagesWith the Dow Jones Industrial Average ($INDU) and the S&P 500 Index ($INX) regularly setting new highs, it's enough to make anyone want to jump into the market. But it can be hard to get a foothold in stocks when single shares of popular companies like Google (GOOG) -- which just topped $900 a share -- cost as much as a new refrigerator.

However, as Michael Brush notes, "If you look beyond the household names, you'll find a lot of stocks from solid companies that go for much more modest prices -- say, less than $5 a share. Given that so many of these small companies get overlooked by the experts, here's where you can find bargains ready to jump higher."

Brush reviewed his own holdings and picks from his Brush up on Stocks portfolio to find seven budget-priced stocks with solid potential, like Sirius XM (SIRI) -- with one crucial caveat: "Do not overpay!"

He notes that thinly traded small-cap stocks can be impacted by many outside factors -- including investing columns -- and that it's important to wait for the right price to buy.

"Because the catalysts at most of these companies are still months away, just patiently wait for a retreat if they happen to advance sharply," Brush says.

Click here to see 7 top stocks under $5.

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