Nominal stock prices shouldn't matter. If Groucho Tech and Harpo Corp are identical companies, it should make no difference to investors that Groucho has 10 million shares outstanding priced at $4.50 apiece, and Harpo has one million shares selling for $45. After all, companies can lower or raise their stock prices at will simply by splitting or reverse-splitting their shares.

Yet price does seem to affect performance. A 2006 study of eight decades of trading data found that sub-$5 stocks beat $20-plus stocks by an average of 0.8 percentage points a month--nearly 10 percentage points a year. Since the 1960s, the outperformance has been smaller but still significant: 0.5 percentage points a month, or 6 percentage points per year.

Companies seem to have caught wise to the appeal of low stock prices. During the Great Depression, eggs sold for 18 cents a dozen and an electric washing machine could be had for $34. But a typical share of stock was $35, the same as today. That's because most companies periodically split their shares. Freeport McMoRan (FCX), Hormel Foods (HRL) and Lincoln Electric (LECO) are among those with splits this year.

If low-price stocks outperform, why not buy only ones with single-digit prices? Careful there. There are far more important factors than share price to consider, including things like price-to-earnings ratios, earnings growth prospects, dividend payments and debt levels. And keep in mind, just about every company that has gone belly-up has worn a single-digit share price shortly before it did.

The Fidelity Low-Priced Stock fund has had success with its strategy, returning an average of 10% per year for the decade ending July 31, versus 6.5% for its benchmark, the Russell 2000. But it shops for stocks under $35, not $10, and it holds many that have since traded well higher. UnitedHealth Group (UNH), the fund's top holding, recently fetched $46 and change.

I recently searched through the S&P Composite 1500 index for stocks priced under $15 and found nearly 350 of them. Many of the lowest-priced ones were attached to deeply challenged companies. By searching for modest price-to-earnings ratios and recent analyst upgrades, I reduced the list to fewer than two dozen companies. Below are listed three.

Dell

Dell (DELL) doesn't have shoppers standing in line the way Apple (AAPL) does when it launches new gear, but then, it collects only one-fifth of its sales from consumers. Most come from businesses in the U.S. and abroad. Last quarter the company reported meager sales growth but a handsome profit increase. Dell has a free cash yield of greater than 15%, of which it unfortunately spends zero on dividends. But its cash and investments on hand are equal to nearly one-third of its stock market value, and it has bought back about 5% of its shares over the past year.

American Eagle Outfitters

Teen clothier American Eagle Outfitters (AEO) isn't especially popular with Wall Street analysts, but two of the 30 who cover the stock have traded in "sell" recommendations for "holds" this month. The company's chief executive resigned in March; it's searching for a new one. Sales at longstanding stores aren't growing, but nor are they plunging as they did in 2009. Last quarter the company reported flat "same-store" sales, beating estimates for the first time in more than three years. That's little sign of a turnaround yet, but shares are just 12 times earnings, and earnings at the moment are depressed to less than half what they were a few years ago. The company holds about one-quarter of its stock market value in cash.

Arctic Cat

Arctic Cat (ACAT) has been making snowmobiles for 50 years but today collects most of its income from all-terrain vehicles (four-wheelers and the like). Its sales peaked in 2006 and have tumbled since, much like the U.S. real estate market, but last year the company returned to growth. Last quarter it reported an 18% sales increase with improvements in all categories. It sits on spare cash equal to more than one-third of its stock market value. The stock has climbed 12% in two days, including an 8% jump Monday that put it just above the $15 mark.