2 Top Stocks Under $5

Bombardier Inc. (TSX:BBD.B) and Roots Corporation (TSX:ROOT) might be risky options, but at under $5 per share the rewards could be in the double digits.

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It’s all fine and good to buy and hold investments that are basically a sure thing. Canadian National RailwayEnbridge Inc., and basically any of Canada’s Big Six Banks all provide such surety.

But what about something more exciting? And for a fraction of the price?

The opportunity exists to make a killing off of stocks that are below the $5 mark. Any movement, and you stand to gain – or lose – quite a lot of money.

So, yes, it can be risky, but I’ve found two top stocks that should keep your numbers out of the red, and way up in the black.

Bombardier

It’s been a bad couple of decades for this transportation Bombardier Inc. (TSX:BBD.B). Once a TSX must have, this stock has plummeted from its all-time highs near $25 per share to where it is at the time of writing at $2.42. Its most recent problems came from its C Series aircraft, which after numerous cash infusions from our government was eventually purchased by Airbus for a majority stake in the project, now called A220.

But a new management team, brought in a couple years back, has analysts optimistic that shareholders are in for a turnaround. The company is shedding multiple assets, prime real estate in Toronto, and the Q400 turboprop plane. These moves should keep costs down, and put the focus back on its business jet and transportation businesses.

Once the focus is back here, Bombardier believes there should be significant cash flow coming in from its Global 7500 ramp up. In the short term, analysts believe the stock could reach $5 per share in the next 12 months, which is nothing to sneeze at given that you’d be buying it for less than half that right now. Depending on what you’re willing to invest, you could double your money in only a year! Given that the company hit that $5 mark last summer, it’s not all too crazy to think they can do it again.

Roots

Roots Corporation (TSX:ROOT) is another opportunity to double your money for low cost. The retail company’s share price is a third of what it used to be 12 months ago, leaving many investors spooked about whether they should get out, get in, or leave it alone.

But while the share price is so low, it’s already starting to climb. Year to date it’s already risen a dollar, leading analysts to believe that it could double to $8 per share in the next 12 months. While it’ll need to prove a lot more than just slight sales growth and reasonable revenue in its earnings reports to get back to that $13 mark, as long as it’s going in a positive direction we should see the stock rise along with it.

It’s not like there’s nowhere to go in the future for this company. True, the United States is a tough nut to crack for a company that’s only well known in Canada. But hey, Canada Goose did it, so it’s not impossible to think Roots could eventually market itself in a way that’s attractive to an international clientele.

Bottom line

While these investments are both on the risky side, for such a low stock price you really can’t go wrong. Whether you’re investing $100 or $10,000, you could double that number and be laughing in only 12 months.

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 Amy Legate-Wolfe owns shares of ENBRIDGE INC. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of Canadian National Railway and Enbridge.

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