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3 Stocks Under $10: 2 Buys and 1 Sell

NEW YORK ( TheStreet) -- Who doesn't love a bargain? Whether at the grocery store or to get our oil changed, everybody loves a deal. In fact, Groupon (GRPN) has built an entire business model around our desire to spend less.

However, it's not the same on the stock market. Wall Street doesn't send out coupons, only reminders that, "Price is what you pay, value is what you get."

Even so, there remains an attraction to what seems like a "cheap" price. Investors are drawn to the perceived less-risky proposition of the per-share amount. But are they really less risky or is it the higher number of shares that one can presumably afford?

Regardless of the reason, what remains true is that if the business does well, the stock price will follow. With that in mind, here's a look at three stocks that are trading under $10 -- two to buy and one to avoid.

Buy Nokia (NOK)

The first stock we're going to take a look at is Nokia, which I'm recommending as a buy. Shares are currently trading around $4, down 2% for the year to date. But don't be fooled. Since reaching a low of $3.02 on April 19, the stock has been up by as much as 42% when factoring the $4.24 per share reached on July 9. Still, if you've been following this company for a while, you have every right not to be excited.

Despite these gains, we can say it pales in comparison to the $60 per share level that the stock reached in 2000. More recently, we know Nokia is still far from the $30 per share mark reached in 2008, which means that investors have lost more than 90% over the past decade. Companies don't reach the depths that Nokia has suffered without having grossly mismanaged its business.

However, there are now signs that things are beginning to turn around. I'm not suggesting that Apple (AAPL) and Google (GOOG) should suddenly fear their positions in the smartphone race. But I'm willing to now give Nokia's management credit for improving the company's financial position. They've done this, while at the same time keeping Nokia's head above water as it sorts things out.

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