In the middle of a bull market, it is difficult to find good, cheap growth stocks. While you could dig amongst penny stocks to find something to buy, they tend to carry too much risk. More often than not they have a story to tell but no real products or services to sell.

Yet raise your sights just a little and you can find growth stocks under $5 that you can buy today. They are accomplished businesses with a proven (or provable) track record. They might not be profitable but there is a clear roadmap towards achieving it.

Certainly, they carry more risk than buying blue-chip stocks but what you give up in reliability and consistency, you make up for with potential outsized returns. That’s why you should look closely at the three under $5 growth stocks below. They might be small in price but offer the possibility of big rewards later on.

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Iamgold (IAG) Gold bars and Financial concept, studio shots. Costco's gold bars, cost stock

Source: Misunseo / Shutterstock.com

Canadian gold miner Iamgold (NASDAQ:IAG) is the first growth stock trading below $5 to consider. Gold prices keep climbing and currently sits at over $2,460 per ounce, very near its record high. That bodes well for Iamgold’s long-term profitability as its all-in-sustaining costs (AISC) stand at $1,493 per ounce sold.

The situation will soon improve even more. Iamgold recently announced it completed its first gold pour at the Cote gold mine in Ontario. As the mine nears its commissioning date, Iamgold expects gold production to reach 220,000 ounces to 290,000 ounces this year. With a total estimated measured and indicated mineral resource of 16.5 million ounces with an additional 4.2 million ounces inferred, Cote is forecast to have an estimated life expectancy of 18 years.

Even better, Cote promises to reduce Iamgold’s AISC. After it achieves 90% throughput, which is expected by the end of 2024, Cote will have AISC per ounce sold of $1,100 to $1,200. Moreover, Cote has the potential to become Canada’s third-largest gold mine.

Cronos Group (CRON) A marijuana leaf rests on top of little tins filled with a balm.

Source: Shutterstock

Canadian marijuana producer Cronos Group (NASDAQ:CRON) may be the riskiest growth stock under $5 to buy. As one of the smallest “major” cannabis stocks, Cronos has a limited market. It withdrew from the U.S. cannabidiol market last year, preferring to wait for federal legalization before entering. That means it serves only two markets currently, Canada, which accounts for three-quarters of its revenue, and Israel, which makes up the balance. As Israel severely limits the number of pot stocks allowed, it does have some market protection.



Because of its narrowed focus, though, there is a natural limitation on its ability to reach scale. Yet it has better finances than most even though it continues to lose money. Cronos has not spent much of the $1.8 billion Altria (NYSE:MO) invested in the marijuana stock and still has $855 million in cash sitting in the bank. Canopy Growth (NASDAQ:CGC), for example, which generates about 2.5 times the sales of Cronos and has raised cash numerous times through stock sales, has about $203 million in cash and equivalents.

Cronos has also not needed to dilute shareholders the way Canopy Growth has. Shares outstanding have increased just 11% over the last five years. Canopy’s share count has more than tripled.

It is also important to note that Cronos bought an option in 2021 to acquire a 10.5% stake in PharmaCann, which could give it backdoor entry into the U.S. market when legalization occurs.

Legalization here at the federal level could trigger other key events for Cronos. In particular, Altria likely would invest more in the company and help reintroduce it to the market, or better, might outright acquire the business. Either way, Cronos Group might not be the fastest grower but it could offer significant upside potential from its current price.

Lilium (LILM) The website for Lilium (LILM) is displayed on a smartphone screen.

Source: T. Schneider / Shutterstock.com

German air taxi company Lilium (NASDAQ:LILM) is still an affordable option for investors looking to break into the electric vertical takeoff and landing (eVTOL) aircraft industry. It is one being built from the ground up by just a handful of companies. Although Joby Aviation (NYSE:JOBY) and Archer Aviation (NASDAQ:ACHR) are arguably better known than Lilium and further along in the commercialization process, Lilium still deserves your attention.

It is developing an electric jet aircraft built with its proprietary propulsion technology. Rather than running an air taxi service itself, though, it is building aircraft for others, including airlines that may be interested in developing regional air mobility services. It is close to signing a deal for 100 jets with Saudi Arabia’s state-owned airline Saudia.

Lilium recently completed the first successful test of its electric jet propulsion unit. It is a critical step toward verifying the flight safety of its jet. As previously noted, Joby and Archer are much further along on in the certification process, but Lilium is making great strides. The interest shown by Saudi Arabia indicates there could be a large commercial market for its unique aircraft.

In total, Lilium has binding orders or memoranda of understanding from customers for 780 jets. Shares of Joby and Archer recently soared 42% and 57%, respectively, on progress towards certification. Lilium can join such growth stocks as it progresses as well.

On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.

On the date of publication, Rich Duprey held a LONG position in MO stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Rich Duprey has written about stocks and investing for the past 20 years. His articles have appeared on Nasdaq.com, The Motley Fool, and Yahoo! Finance, and he has been referenced by U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, USA Today, Milwaukee Journal Sentinel, Cheddar News, The Boston Globe, L’Express, and numerous other news outlets.

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