In this article, we will look at the 10 Best Canadian Stocks to Buy Under $10.
How are Canadian Stocks Performing?
The Canadian stock market had a positive third quarter, following a sluggish start earlier in 2024. The market was driven by domestic rate cuts and rebounding global markets. The BMO S&P 500 Index ETF, iShares Core S&P/TSX Capped Composite Index ETF, and iShares S&P/TSX 60 Index ET have surged over 33%, 20%, and 22% year-to-date, as of November 27.
If we talk about year-over-year headline inflation, it has cooled as per the Bank of Canada’s target rate of 2%. Hence, policymakers have cut rates four times consecutively and another 50 basis points cut is expected in December. The Bank of Canada’s benchmark lending rate stands at 3.75%, while economists are projecting a terminal interest rate of as low as 2%.
The managing director and head of macro strategy at Desjardins Group pointed out that the GST tax break from December 14 to February 15, 2025, will have a high fiscal multiplier, adding a noticeable boost to growth in the first half of 2025. The tax break is to increase consumer spending which has been severely impacted by interest rate increases and high debt levels since 2022. The tax break will allow consumers to buy essentials such as groceries, snacks, and kids’ clothing – all tax-free.
In the long run, the potential trade tariffs pose a wider threat to companies. The newly elected U.S. President Trump has vowed to impose a 25% tax on imports from Canada as well as Mexico. In 2023, the U.S. accounted for more than 75% of exports from Canada.
READ ALSO: Jim Cramer’s Latest Lightning Round: 11 Stocks to Watch and Jim Cramer on AMD and Other Stocks.
Canada’s Precious Metal and Mining Industry: The Real Deal
Some of the largest Canadian companies are involved in minerals and mining of rare earth metals, mainly involved in gold and uranium exploration. Canada is also one of the largest producers of rare earth metals including Gold and Uranium. According to the World Gold Council, Canada was the fourth largest producer of gold with a total production of 192 tonnes in 2023. Are you interested in Gold Stocks to Buy Under $30? (Click Here)
In addition, Canada was the second largest Uranium producer in 2022, accounting for a total production of 7,351 tonnes, as per the World Nuclear Association. Cigar Lake was the largest operational highest-grade Uranium mine, located in northern Saskatchewan, Canada.
With that, let’s take a look at the 10 Best Canadian stocks to buy under $10.
Our Methodology
To compile our list of the 10 best Canadian stocks to buy under $10, we scanned Canadian stocks through Finviz Screener using two indicators. We shortlisted the stocks with a share trading price of under $10 and market capitalization of more than $1 billion trading on U.S. stock exchanges. From that list, we narrowed our choices to the 10 stocks that are widely held by hedge funds, as of Q3 2024. The list is ranked in ascending order of hedge fund sentiment, as of the third quarter.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Canadian Stocks to Buy Under $10
10. Sandstorm Gold Ltd. (NYSE:SAND)
Number of Hedge Funds Holders: 18
Share Price as of November 27: $5.83
Sandstorm Gold Ltd. (NYSE:SAND) is a precious metals-focused streaming and royalty firm headquartered in Vancouver, British Columbia, Canada. Sandstorm focuses on acquiring royalties and gold alongside other metals purchase agreements from companies that have advanced-stage operating mines. The company owns more than 230 royalties, out of which 41 mines are producing.
During the third quarter of 2024, the company posted revenue of $44.7 million, up from $41.3 million in Q3 2023. The company’s net income was reported to be around $5.8 million compared to $0.01 million a year ago. Driven by strong commodity prices, Sandstorm Gold Ltd. (NYSE:SAND) generated record operating margins for the third consecutive quarter. In the next five years, the company expects significant growth with production to reach nearly 125,000 attributable gold equivalent ounces. This production outlook is solely based on streams and royalties that Sandstorm has purchased and paid for.
Sandstorm Gold Ltd. (NYSE:SAND) has reduced its debt from $640 million to $369 million and plans for further reduction, making its financial condition stronger. The company’s Greenstone project is on the verge of commercial production which would contribute significantly to its future production outlook.
9. IAMGOLD Corporation (NYSE:IAG)
Number of Hedge Funds Holders: 18
Share Price as of November 27: $5.39
IAMGOLD Corporation (NYSE:IAG), based out of Toronto, is an intermediate gold producer and developer. The gold mining firm focuses on the exploration, development, and operation of gold mining properties in North America and West Africa. The company is also involved in non-gold metals with segments including the Cote Gold project, Exploration, Evaluation, and Development, and Corporate, which includes royalty interests. The Burkina Faso segment is where the company makes the majority of its revenue.
IAMGOLD Corporation (NYSE:IAG) has had robust growth in the last few years, mainly driven by its explorations and rising prices of gold. In Q3, the company reported a noticeable revenue growth of 96% from a year ago, mainly driven by year-to-date gold production of 490,000 ounces. The company’s segments at Westwood and Essakane have added to IAMGOLD’s impressive performance. The company’s improving operating performance has increased overall guidance for the year.
In addition to that, the company obtained significant commercial production metrics at the Côté Gold Mine, which improved the outlook for cash flow. By the end of Q3, the company had $511.4 million in cash and cash equivalents, reflecting a strong financial position. To further enhance its production capacity and financial flexibility, IAMGOLD Corporation (NYSE:IAG) repurchased a 9.7% stake in Côté Gold from Sumitomo.
