In this article, we discuss the 10 best affordable stocks under $10. To skip the detailed analysis of current economic conditions and experts’ outlook around them, go directly to the 5 Best Affordable Stocks Under $10.
On March 20, the Federal Reserve Chairman, Jerome Powell, highlighted that the economy remains strong with substantial easing of inflation along with a robust labor market. However, he said that inflation remains relatively high compared to the Fed’s longer-run goal of 2 percent and that future inflation trends could remain uncertain. The Fed chair highlighted that the unemployment rate has been relatively low at 3.9%, and job gains have averaged around 265,000 over the last three months.
Moreover, the Fed shed light on the US GDP growth and its outlook, stating that the GDP growth reached 3.2% in the fourth quarter of 2023 and predicted a slowdown in the near future. The committee is expecting a median projection of 2.1% GDP growth for 2024 and 2% for the following two years. The Fed maintained the overnight federal funds rate at the current range of 5.25% to 5.5%, and the committee still projects three rate cuts this year. Nevertheless, Jerome Powell said that it will still depend upon incoming data.
Market Outlook According to Experts
In an interview with Yahoo Finance, chief economist of Annex Wealth Management, Brian Jacobsen, said their committee has been in discussion about “where the market narrative might shift towards,” and pointed toward the small-cap space. Jacobsen’s team also has a bullish view of the industrials, materials, and utilities sectors. He highlighted that these three sectors have underperformed and that the utilities sector could benefit a lot in case of interest rate stability or cuts. Brian Jacobsen said that the materials and industrials sectors are more “cyclically oriented”, and if manufacturing gets out of the “long hibernation” it has experienced, both sectors could even outperform for three years.
Despite the underperformance of the materials and industrial sectors compared to the broader market in 2023, both of them are competing fairly well in 2024. Materials Select Sector SPDR Fund (XLB) has been up 8.5% year-to-date, compared to the S&P 500 10.08% gain as of March 27. On the other hand, the Industrial Select Sector SPDR Fund (XLI) has outperformed the S&P 500 with an 11.61% year-to-date gain.
Jeremy Siegel, Wharton School finance professor, told CNBC on March 27 that he is still optimistic about the US economy, and it isn’t showing any signs of weakness. He said that he wouldn’t be surprised about a little correction in the market, but the current bull market is strong and has “ways to go”. Professor Siegel also commented on Morgan Stanley’s executive chairman James Morgan’s statement about not being shocked if the Fed doesn’t cut rates for the whole year. He said it is possible, but he thinks it is unlikely and “against the odds.”
On the other hand, Elizabeth Evans, Managing Partner of Evans May Wealth, said in a CNBC interview on March 27 that the market is due for a pullback, and her company is suggesting the clients take a time-out and make some adjustments. Evans’ firm is bullish on mega-cap tech stocks along with D.R. Horton, Inc. (NYSE:DHI) and CrowdStrike Holdings, Inc. (NASDAQ:CRWD).
D.R. Horton, Inc. (NYSE:DHI) is a Texas-based home-builder that has built over 1 million homes as of 2023 and has been the largest home-builder in the US by volume for over two decades. On January 29, Argus raised its FY24 EPS outlook for the stock to $13.72 from $12.50. Argus believes that D.R. Horton, Inc.’s (NYSE:DHI) strength lies in delivering affordable homes, as approximately 68% of its homes sold for less than $400,000 in FY23. This positioning indicates the company’s readiness to cater to value-conscious buyers.
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is a well-known name in the cyber-security space, providing endpoint security, threat intelligence, and cyber attack response services. Over the last three months, Wall Street has been quite bullish on the company’s stock, with 39 out of 41 analysts maintaining a Buy-equivalent rating on the stock, according to TipRanks. Their average price target of $394.36 shows a 22.38% upside to CrowdStrike Holdings, Inc.’s (NASDAQ:CRWD) stock price of $322.25 as of March 27.
In light of current economic conditions and outlook, some of the best affordable stocks under $10 include Southwestern Energy Company (NYSE:SWN), Under Armour, Inc. (NYSE:UA), and Kosmos Energy Ltd. (NYSE:KOS).
10 Best Affordable Stocks Under $10
Our Methodology
For this article, we identified 24 stocks with market capitalizations of over $2 billion and PE ratios below 15, trading on the NYSE and NASDAQ for under $10 as of the March 26 market close. Next, we narrowed down our list to 10 stocks most widely held by institutional investors and ranked them in ascending order of the number of hedge funds that have stakes in them as of Q4 of 2023.
The hedge fund data was taken from Insider Monkey’s database of 933 elite hedge funds. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
10 Best Affordable Stocks Under $10
10. Comstock Resources, Inc. (NYSE:CRK)
Number of Hedge Fund Holders: 18
TTM PE ratio as of March 26: 11.84
Share Price as of March 26: $8.86
Comstock Resources, Inc. (NYSE:CRK) acquires, explores, develops, and produces natural gas and oil properties in the U.S. The company has 1,600 net drilling locations in the Haynesville and Bossier shales. As of March 26, Comstock Resources, Inc. (NYSE:CRK) has a PE ratio of 11.84.
In the fourth quarter of 2023, hedge fund sentiment was positive toward Comstock Resources, Inc. (NYSE:CRK). In the quarter, 18 hedge funds held stakes in the company with positions worth $69.874 million. This is compared to 12 funds in the preceding quarter, and their stakes amounted to $68.88 million. As of Q4, 2023, Todd J. Kantor’s Encompass Capital Advisors is the most dominant shareholder in the company and has a position worth $31.030 million.
Comstock Resources, Inc. (NYSE:CRK) is one of the best affordable stocks under $10. Other such stocks include Southwestern Energy Company (NYSE:SWN), Under Armour, Inc. (NYSE:UA), and Kosmos Energy Ltd. (NYSE:KOS).
9. Playtika Holding Corp. (NASDAQ:PLTK)
Number of Hedge Fund Holders: 19
TTM PE ratio as of March 26: 10.78
Share Price as of March 26: $6.94
Playtika Holding Corp. (NASDAQ:PLTK) is a developer of casual and social casino-themed mobile games. The company has more than 34 million monthly active users and 17 office locations.
As of March 26, Playtika Holding Corp. (NASDAQ:PLTK) has a PE ratio of 10.78. According to our database, the stock was part of 19 hedge funds’ portfolios in the fourth quarter of 2023, with positions worth $102.777 million. This is compared to 19 funds in the previous quarter with a total stake of $96.730 million. AQR Capital Management is the most dominant shareholder in the company, with a position worth $44.488 million as of December 31, 2023. Playtika Holding Corp. (NASDAQ:PLTK) takes the 9th spot on our list of best affordable stocks under $10.
On February 26, for the first time ever, Playtika Holding Corp. (NASDAQ:PLTK) declared a quarterly dividend of $0.10 per share, payable by April 5 to the shareholders of record on March 22. As of March 26, the stock’s dividend yield was 5.76%.
Playtika Holding Corp. (NASDAQ:PLTK) has received Buy ratings from 4 Wall Street analysts over the past three months. As of March 26, the average price target of $9.78 represents an upside of 39.91%.
8. iQIYI, Inc. (NASDAQ:IQ)
Number of Hedge Fund Holders: 20
TTM PE ratio as of March 26: 14.87
Share Price as of March 26: $4.0400
iQIYI, Inc. (NASDAQ:IQ) is a subsidiary of Baidu, Inc. (NASDAQ:BIDU) and offers online entertainment video services in China. The company’s product offerings include online video, online games, online literature, and more. According to the company’s website, it has a daily subscriber base of over 100 million. iQIYI, Inc. (NASDAQ:IQ) has a TTM PE ratio of 14.87 as of March 26.
Based on 5 Wall Street analysts’ ratings over the last three months, iQIYI, Inc. (NASDAQ:IQ) has a consensus rating of Strong Buy. The average price target of $6.43 represents an upside of 59.158% from the last price of $4.04 as of March 26.
The company is one of the best affordable stocks under $10. In the fourth quarter of 2023, 20 hedge funds held positions in iQIYI, Inc. (NASDAQ:IQ), and their total stake was worth $98.275 million. As of December 31, 2023, Maple Rock Capital is the most prominent shareholder in the company. In the quarter, the firm increased its stake in the company by 53% to 6.24 million shares worth $30.451 million.
Ariel Investments made the following comment about iQIYI, Inc. (NASDAQ:IQ) in its Q2 2023 investor letter:
“Lastly, we established a new position in IQIYI, Inc. (NASDAQ:IQ), a leading long form online video entertainment service in China. Despite facing recent obstacles, including competition from short-form content platforms, iQIYI boasts a devoted user base, robust partnerships with major content providers and an extensive collection of original and licensed content. Our confidence in this investment is further strengthened by iQIYI’s implementation of a proprietary industrialized production system. This technology leverages data-driven approaches to effectively manage content creation, allocate budgets, and monitor production progress, facilitating sustainable growth and informed decision-making.”
7. Sirius XM Holdings Inc. (NASDAQ:SIRI)
Number of Hedge Fund Holders: 22
TTM PE ratio as of March 26: 12.17
Share Price as of March 26: $3.86
Sirius XM Holdings Inc. (NASDAQ:SIRI) provides various types of audio entertainment services. Among its products, SiriusXM is subscription-based and provides different types of content like comedy, music, sports, and more. Meanwhile, Pandora is an audio streaming service that allows users to curate their listening experiences. Pandora has 50 million active users, and SiriusXM has 34 million paid subscribers. As of March 26, Sirius XM Holdings Inc. (NASDAQ:SIRI) has a market cap of $14.9 billion.
Sirius XM Holdings Inc. (NASDAQ:SIRI) was part of 22 hedge funds’ portfolios, and the total stake value was $345.503 million in the fourth quarter of 2023. This is compared to 24 funds in the third quarter, and their stakes amounted to $146.375 million. Warren Buffett’s Berkshire Hathaway has increased its stake in the company by 316% to 40.243 million shares worth $220.13 million and is the most significant shareholder as of December 31, 2023.
On March 27, Benchmark Co. analyst Matthew Harrigan lowered the price target from $7 to $6.50 and maintained a Buy rating on Sirius XM Holdings Inc. (NASDAQ:SIRI). As of March 26, the stock has a PE ratio of 12.17.
6. Itaú Unibanco Holding S.A. (NYSE:ITUB)
Number of Hedge Fund Holders: 22
TTM PE ratio as of March 26: 10.24
Share Price as of March 26: $6.88
Itaú Unibanco Holding S.A. (NYSE:ITUB) is a Brazilian company that offers financial products and services, including loans, credit and debit cards, property and casualty insurance products, and more. The company runs three segments, namely Retail Banking, Wholesale Banking, and Activities with the Market + Corporation, and conducts its operations in 18 countries.
On March 21, Itaú Unibanco Holding S.A. (NYSE:ITUB) announced a monthly dividend of $0.0487 per share for shareholders of record on March 25. Furthermore, the stock has a PE ratio of 10.24 as of March 26.
In Q4 of 2023, 22 hedge funds held positions in Itaú Unibanco Holding S.A. (NYSE:ITUB), and their total stakes amounted to $433.146 million. As of the fourth quarter of 2023, Fisher Asset Management is the most significant shareholder in the company. The firm has increased its stake in the company by 44% to 52.322 million shares worth $363.641 million.
Southwestern Energy Company (NYSE:SWN), Under Armour, Inc. (NYSE:UA), and Kosmos Energy Ltd. (NYSE:KOS) are some of the best affordable stocks under $10, along with Itaú Unibanco Holding S.A. (NYSE:ITUB).
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Disclosure. None. 10 Best Affordable Stocks Under $10 is originally published on Insider Monkey.