The allure of Wall Street’s favorite cheap stocks lies in their high upside potential, requiring smaller up-front investments. These stocks, which are priced under $10 apiece, offer investors with the opportunity to build a diverse portfolio without breaking the bank. Moreover, some of the best cheap stocks in the market, such as those listed below, can be found with strong underlying business models and fundamentals. This makes such companies ideal for those looking to employ a long-term investment strategy.

Indeed, 2023 has seen a marginal uptick in major indices amid market volatility, a welcome change from last year’s stock market rout. While most indices suggest some stability and recovery on the horizon, it’s important to remember that low-cost stocks often carry higher levels of risk.

However, it’s a misconception to label all cheap stocks as speculative. There are potential multi-baggers out there with attractive risk profiles. So, let’s take a look at some of Wall Street’s favorite cheap stocks, and dive deeper into wether these may fit your portfolio moving forward.

Aemetis (AMTX)

Aemetis (NASDAQ:AMTX) is a small-cap biofuels producer that focuses on low- to negative-carbon-intensity biofuels. These biofuels are derived from agricultural waste products, a testament to the company’s commitment to environmental stability.

The biofuel industry itself is on a positive growth trajectory spurred by a push for lower carbon-intensity fuels. Amid this dynamic landscape, Aemetis stands out with its forward-looking strategy. It already has a strong order backlog, suggesting the company could produce as much as $1.5 billion in sales and $500 million in profits by 2026.

However, the firm is currently grappling with considerable financial challenges, mainly due to a significant rise in energy costs. Specifically, the company decided to idle its Keyes plant in late 2022 due to a 500% increase in energy costs. This decision significantly impacted its top-line results in the first quarter of 2023. Nevertheless, AMTX stock remains an excellent story stock over the long term, with forward revenue growth estimates at over 24%. Moreover, Tipranks analysts have assigned a cumulative moderate buy rating for the stock, expecting over 140% upside from current prices.

Payoneer Global (PAYO)

Payoneer Global (NASDAQ:PAYO) has effectively carved out a robust niche in the financial technology industry thanks to its comprehensive payment platform. It enables businesses and professionals in more than 200 countries to effectively manage cross-border payments, with a particular focus on small to medium businesses (SMBs).

The company’s fundamentals have been killing it of late, as Payoneer reported another stunner in the first quarter. Sales rocketed by 40%, while customer funds reached a whopping $5.5 billion, an 18% increase year-over-year. Moreover, the company plans to introduce new financial products and expand existing offerings, like the commercial card and checkout.

Notably, Payoneer remains in an enviable position for even greater success in the future. Despite these promising prospects, the stock remains modestly-priced at a forward price-to-sales multiple of 1.9-times. Any fintech expected to maintain over 20% growth is trading remarkably cheaply at such multiples.

Nokia (NOK)

Nokia (NYSE:NOK), once a dominating force in the smartphone industry, has now evolved into one of the biggest forces in the telecommunications infrastructure sphere. Under the strategic leadership of CEO Pekka Lundmark, the firm has become one of the biggest 5G players globally. The company’s stellar execution and effective capital allocation position it for massive long-term gains in the burgeoning 5G market.

Nokia already boasts more than 286 commercial 5G agreements, adding more deals at a healthy pace each quarter. Moreover, the company has successfully carved out a niche in countries such as India, where the 5G rollout is currently just getting started. As of this year, India has roughly 10 million 5G connections, and the number could surge past the one billion mark by the conclusion of 2023.

Looking ahead, Nokia is set to achieve full-year sales growth of between 2% and 8% in 2023. The company’s resurgence is also underscored by robust top- and bottom-line growth, marked by double-digit increases over the past year. This continued growth trajectory makes Nokia an appealing prospect for long-term investors. Tipranks Analysts expect a 41% upside from current price levels.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines