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Here we present five stocks priced under $5 that have conservative accounting practices, according to the ratings developed by forensic accounting firm Audit Integrity.

Audit Integrity was founded in 2002 to develop risk management tools based on a statistical analysis of corporate integrity. The Accounting and Governance Risk (AGR) rating is a forensic measure of the transparency and reliability of a corporation’s financial reporting and governance practices. The closer the score is to 100, the more conservative the company's accounting practices, according to Audit Integrity.

All the companies in this list have high AGR scores and are categorized by Audit Integrity as “Conservative," i.e. more conservative and transparent accounting practices than most other firms.

How much do you value the earnings quality of the names mentioned below? Use this list as a starting-off point for your own analysis.

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List sorted by AGR score.

1. Level 3 Communications Inc. (NYSE:LVLT): Diversified Communication Services Industry. Market cap of $2.46B. Current price at $1.47. According to Audit Integrity, the company follows conservative accounting practices, with an AGR score of 100. LVLT is exhibiting strong upside momentum - currently trading 8.77% above its SMA20, 12.94% above its SMA50, and 33.35% above its SMA200. The stock has had a couple of great days, gaining 13.08% over the last week.

2. Corcept Therapeutics Inc. (NASDAQ:CORT): Biotechnology Industry. Market cap of $354.35M. Current price at $4.22. According to Audit Integrity, the company follows conservative accounting practices, with an AGR score of 96. The stock has had a good month, gaining 11.35%.

3. Office Depot, Inc. (NASDAQ:ODP): Specialty Retail Industry. Market cap of $1.30B. Current price at $4.70. According to Audit Integrity, the company follows conservative accounting practices, with an AGR score of 92. This is a risky stock that is significantly more volatile than the overall market (beta = 3.29). It has been a rough couple of days for the stock, losing 5.62% over the last week.

4. Durect Corp. (NASDAQ:DRRX): Drug Manufacturer. Market cap of $309.01M. Current price at $3.54. According to Audit Integrity, the company follows conservative accounting practices, with an AGR score of 86. The stock has gained 28.73% over the last year.

5. Vonage Holdings Corporation (NYSE:VG): Diversified Communication Services Industry. Market cap of $930.80M. Current price at $4.20. According to Audit Integrity, the company follows conservative accounting practices, with an AGR score of 86. The stock has gained 213.43% over the last year.

*AGR ratings sourced from Audit Integrity, all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 5 Stocks Under $5 With Conservative Accounting Practices