3 Stocks Under $5 That Could Be Great Buys Today

Neptune Wellness Solutions Inc (TSX:NEPT)(NASDAQ:NEPT) and these two other stocks are cheap buys that have a lot of potential.

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The recent downturn in the markets should offer a reminder to investors the importance of buying low rather than high. After all, stocks that are modestly valued have far less to fall than stocks trading at high multiples of earnings or sales. Below are three stocks that are trading at less than $5 per share that could have significant upside over the long term and that could make for great buys today.

Neptune Wellness Solutions (TSX:NEPT)(NASDAQ:NEPT) has been doing very well in 2018 with its share price rising by more than 50% since the start of the year, although in the past month it has dipped by more than 10%. The wellness company has been around for a long time, but why it has recently grabbed my attention is its interest in the cannabis industry and by working with industry giant Canopy Growth to develop pills and edibles, which could unlock a lot of value for investors as that segment could take off in the near future.

Neptune offers investors a great way to invest in the emerging cannabis industry without taking a risk on high-risk cannabis stocks that still might be a long way away from turning a profit. Neptune, meanwhile, has proven that although it has seen some fluctuations in its earnings, it can provide investors with a much more stable investment. This is definitely a stock I’d keep on my radar, especially if it continues to fall in price.

Westport Fuel Systems (TSX:WPRT)(NASDAQ:WPRT) is a good long-term buy, as the company’s focus on environmentally sustainable engines and technologies give it a bright future as our society continues to show a desire for greener and cleaner products. Westport has continued to inch closer toward profitability over the years, but this is definitely a long-term play that will require some patience.

Year to date, the stock has declined by more than 30%, although it looks to have found some support at around $3 a share, and it could be a good buy at this price point, especially as it continues to grow and come closer to posting a profit.

DHX Media (TSX:DHX)(NASDAQ:DHXM) has also fallen heavily this year, declining by around 40% since the start of the year. The company has struggled to stay out of the red in recent quarters, and how well its restructuring changes go will have a big impact on how much of a rally we’ll see from the stock for the remainder of the year. In the past month, it has shown a bit of a recovery, but it still has a long way to go to get back to where it was at the beginning of the year.

The media company has many different brands and channels that it operates that are targeted towards families and kids, which can deliver a lot of growth. Content is big these days, and having a quality product can help drive value. And the proof for investors is in the results: in four years, DHX has seen its sales nearly quadruple, and last year the company’s sales rose by more than 45%. If DHX is able to find a way to consistently stay in the black and continue this impressive growth, its stock price could soar back to previous highs.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor David Jagielski owns shares of DHX Media.

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