Tickers in this Article: AEM, RBY, GLDX, GSS, BAA, JAG, VGZ, AZK
For many investors, one of most intriguing aspects of the stock market are firms that trade for less than five dollars. After all, the idea of loading up on a bunch of shares for next to nothing and watching them shoot higher, is incredibly appealing. While no company's share prices trade that low without a reason, there are plenty of interesting picks within that price range, across a variety of sectors. One such opportunity exists within the gold world. As investors continue to clamor for gold as a safety net and inflation hedge, the precious metals portfolio prominence is almost assured. (For more, check out Strike Gold With Junior Mining.)

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Think Cheap
While a $100 stock can be very cheap and $2 stock can be very expensive, based on metrics like price-to-earnings ratios, there is some method to madness of picking low priced stocks. The strategy was first popularized by Fidelity in 1989, with its Low-Priced Stock Fund (FLPSX), and has produced amazing results. Since its inception, manager Joel Tillinghast has helped steer the fund to a market beating 13.47% annual return.

The basic idea is that the majority of institutional investors are either forbidden from investing in, or do not focus on, very low-priced equities. In addition, many of these stocks receive very limited analyst research coverage. These conditions create great opportunities to find securities that are trading below their intrinsic worth. Overall, the low-priced stock world offers investors tremendous prospects, if they are willing to do the research.

In the gold world, this effect is intensified. Generally, low-priced gold miners tend to be of the junior persuasion. These smaller resource firms are the major source of new mines and supply in the world. Functioning as the real exploration firms, the juniors search for new mineral deposits, often without many of the bureaucratic red tape associated with larger mining firms. When a behemoth miner like Agnico-Eagle (NYSE:AEM) needs to add new supply, they don't dig. They purchase or partner with a junior producer, as they did with their 10% stake in Rubicon (NYSE:RBY). (To learn more about investing in metals, read Investing In The Metals Markets.)

Four Low Priced Picks
For investors, adding a dose of low-priced gold firms could be the rocket their portfolios are looking for. The newly minted Global X Gold Explorers ETF (Nasdaq:GLDX) could be an interesting starting point for investors. However, there are plenty of individual low-priced picks.

Africa is home to some of the world's largest gold and mineral deposits. Priced at around $2, Golden Star Resources (NYSE:GSS) allows investors to tap into that potential. Operating two mines in Ghana, the company has faced a few minor setbacks, in the way of equipment and power problems, but has recently reaffirmed its gold production quotas for the fourth quarter, and could make an interesting pick. Similarly, miner Banro (NYSE:BAA) is almost finished with the construction of its Democratic Republic of the Congo mine.

Suffering from operational setbacks and mismanagement, shares of Jaguar Mining (NYSE:JAG) may have finally turned a corner. The firm's recent second quarter results were favorable and earnings per share growth over the last two quarters has surged 325 and 257%. Overall, Jaguar controls nearly 7.5 million ounces of gold across three Brazilian mines, and has two more E&P projects coming online shortly.

Finally, Vista Gold (NYSE:VGZ) could be an undervalued takeover target. The firm has projects across Australia, North America, and Indonesia, with proven and probable reserves of around 16 million ounces. Shares of the gold miner are dirt cheap in price, at around $3, and on a metric basis. Vista trades at current P/E of 4.2 and its market cap is less than $250 million.

The Bottom Line
Investing in companies trading for less than a Lincoln is risky, but they may provide the jolt our sagging portfolios need. The gold sector offers investors plenty of choice to find low-priced deals. The previous companies along with Aurizon Mines (NYSE:AZK) make interesting choices for further research. (For more on how you can profit through gold, see Getting Into The Gold Market.)

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