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Everybody loves a cheap stock. The problem is, cheap stocks are hard to find, and they're often cheap for a reason.

But what about a really cheap stock? As in, under $5 a share? Sometimes even if a stock has "issues," they're not significant enough to necessitate a price that low. Sometimes stocks costing under $5 are priced too cheap for the difficulties they face.

That's why today we'll be taking a look at three top stocks costing under $5 to see if we can find (at least) one bargain.

Broker pointing at stock chart going up.

Looking for cheap stocks that could go up a lot? What a coincidence! So are we! Image source: Getty Images.

Plug Power (PLUG -5.26%)

We begin today's search with hydrogen fuel cell pioneer Plug Power, a stock that costs just $2 and change -- and used to cost less than half that (in fact, as recently as March).

Plug Power went on its own personal version of Mr. Toad's Wild Ride earlier this month after the company announced a deal to supply (AMZN -0.16%) with fuel cells and "GenKey technology" to power forklifts at Amazon warehouses, along with warrants to buy 55.3 million Plug shares for prices of less than $1.19 a share. This demonstration of faith from the nation's largest e-tailer sparked an enthusiastic response from Plug investors -- but should you buy this under-$5 stock?

That depends. According to its press release, the deal with Amazon is likely to add $70 million to Plug Power's revenue stream this year. That's a good thing, because before those revenues were factored in, analysts quoted on S&P Global Market Intelligence were projecting essentially zero sales growth at Plug this year.

With the Amazon deal in place, analysts expect to see Plug nearly double its 2016 revenue in 2017, then double it again by 2019, and keep growing from there. Current estimates call for Plug Power to finally turn profitable in 2019, earning $0.08 per share, and more than triple its profits (to $0.27 per share) by 2021 (which is as far as the estimates go out). At today's price of $2.24 per share, Plug stock costs a mere 8.3 times the profits it might earn four years from now. If it does earn them, that could turn out to be a very cheap price indeed.

Hovnanian (HOV -0.99%)

Not interested in gambling on a (currently) profitless, high-tech, high-risk stock like Plug? Perhaps a settled and staid homebuilder is more your speed? In that case, you might check out Hovnanian.

Unlike Plug, Hovnanian is already profitable, with trailing-12-month earnings of $13 million. With Hovnanian stock's $323 million market capitalization, that works out to a P/E ratio of 24.

Factor next year's earnings growth into the picture, and Hovnanian's forward P/E ratio falls to just 15. But according to some analysts (JMP Securities among them), the most an investor should really pay for Hovnanian stock is about 8 times forward earnings -- so, should you buy it or not?

That really depends on what matters to you most: Cash, or debt. Hovnanian has a lot of both. On the cash front, this homebuilder cranked out more than $470 million in positive free cash flow over the past year -- an order of magnitude more real cash profit than its GAAP income statement reflects. But on the debt side of the equation, Hovnanian has about $1.5 billion more debt than cash on its books, which gives the stock an enterprise value several times greater than its market capitalization -- about $1.8 billion.

All of this gives Hovnanian an enterprise value-to-free cash flow ratio of just 3.9. So long as the housing market doesn't tank, and Hovnanian continues producing cash at the levels it's been able to recently, the stock should have no problem making payments on its debt, and even continuing to pay it down -- in which cash, this sub-$5 stock could be a lot less risky than its price suggests.

Ascena Retail (ASNA)

But wait! We've saved the (possibly) best stock idea for last.

Once upon a time, Ascena Retail went by the better-known, if decidedly un-sexy, name "Dress Barn." A few purchases of other brands later (Ascena now owns such famed names as Ann Taylor, Loft, and Lane Bryant, in addition to Dress Barn), and management decided it needed a new, more ambiguous name to house all its brands in.

The problem is, business hasn't been going so great for Ascena since the name change (to put it mildly). Last quarter, for example, Ascena reported declines in overall sales, in same-store sales, and in profits. (More accurately, it reported a bigger loss than in the previous year's fiscal second quarter). This is all probably in part a facet of the "Amazon effect," where online e-tailers continue to steal sales from bricks 'n' mortar retailers. But whatever the cause, the fact remains that Ascena hasn't been looking so healthy lately -- which helps to explain its sub-$5 stock price.

Now here's the good news: Despite weak sales and profits, Ascena Retail continues to generate healthy levels of free cash flow, pumping out more than $150 million in cash profit over the past 12 months. Weighed against its debt-adjusted enterprise value, that works out to an EV/FCF ratio of just 13 times for Ascena stock -- and if debt doesn't worry you, the un-debt-adjusted price-to-FCF ratio is a mere 5x.

Whichever way you value the stock, analysts are projecting a big revival in profits at Ascena over the next five years, with earnings growing at 20% annually. If Ascena manages anything near this level of growth, the company could prosper enormously.