The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
By David Sterman
NEW YORK (StreetAuthority) -- It's no secret that small-cap and micro-cap stocks really take it on the chin when investors grow skittish. A 5% or 10% drop in the broader market can lead to even deeper hits for these riskier stocks. The converse is also true: When the market is in rebound mode, these oversold stocks can post some of the most impressive rallies.
At this point, investors in a buying mood are faced with two choices: They can either focus on lower-risk blue chips that appear inexpensively valued and possess respectable upside. Or they can focus on riskier, beaten-down stocks that could rise much more sharply in an improving economy.I've spent a considerable amount of time the last few months focusing on blue-chip bargains. Here's a look at the other end of the spectrum -- five stocks under $5 that could rise sharply in the next few years, granted the global economy dodges a bullet with the current crises.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV