Some investors consider cheap stocks under $10 to be too risky. Some call stocks selling for $80 per share “cheap.” Others think the risk is worth it when it comes to penny stocks. Wherever you fit on the cheap stocks radar, it’s good to remember that there was a time when Amazon (NASDAQ:AMZN) was basically a $5 stock.

So I would never say never to stocks under $5. Here are 2 cheap stocks that could be worthy of your attention.

Cheap Stocks Under $5: Francesca’s Holdings (NASDAQ:FRAN)

Francesca’s Holdings has been offering many opportunities this week. The stock has yo-yo’d in the last five days but at $3.08 at present, this stock is a potential winner.

From 2010 to 2016 Francesca’s was on fire selling cute, trendy, Instagram-worthy clothes and accessories. Success was so great that over that period, comparable sales growth was in excess of 50%. In those good days, FRAN stock sold for $35 and up.

Since 2016, comparable sales have dropped significantly. Last quarter they dropped 15%, and the company’s gross margins fell 250 basis points. 

Because we are talking about the retail sector here, it’s easy for investors to see these numbers and believe Francesca’s is another failing brick and mortar in the era of e-retailing.

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But the stock could easily come shooting back up. This may just be a rough patch. This cheap stock is currently trading at under nine-times this year’s earnings, and FRAN is aligning itself with a popular trendy sector of artsy clothing. I wouldn’t write FRAN out just yet.

Cheap Stocks Under $5: Rite Aid Corporation (NYSE:RAD)

Pharmacy chain Rite Aid Corporation is currently selling for a very cheap $1.16. But this chain has been struggling. A merger that could’ve rescued the group fell through recently, sending shares lower.

But this cheap stock is trading at less than 10% of its trailing sales. Also, the company is reducing its debt by downsizing and selling several stores that have been underperforming.

So at a very low price tag, the settling of debts, and compacting its business, Rite Aid may just be able to begin again. This cheap stock may never be the next Amazon, but it may return at least double its near $1 price tag.

Featured Image: Depositphotos/© Skovoroda