In this article, we discuss 10 best Canadian stocks under $10. If you want to skip our detailed discussion on the Canadian economy, head directly to 5 Best Canadian Stocks Under $10.
Previously, we reported that the Canadian economy rebounded from the COVID-19 crisis with a 3.2% growth rate in 2022, outperforming the G20 and OECD averages. However, challenges persist due to inflation, slowed investment, and limited productivity growth. The robust labor market and household savings may delay the impact of tighter monetary policy, but rising interest rates are already impacting after-tax incomes. The Royal Bank of Canada predicts a “mild” recession in 2023, with GDP decline expected in the third and fourth quarters. Achieving the central bank’s inflation target depends on economic weakening, and higher-than-expected growth may lead to more interest rate hikes. Housing markets are showing signs of recovery, but a bumpy landing is expected as prices and interest rates impact purchasing power, although consumer spending remains largely steady.
According to TD Economics, Canadian consumers started 2023 with strong spending on durable goods, particularly in auto sales, but this momentum is expected to slow down as the year progresses. The overall consumer spending profile has been upgraded, with any potential contraction now forecasted for 2024. The labor market slowdown has also been delayed, with signs of cooling in May, but not seen as a broader trend. Investment in Canada is influenced by high commodity prices, the energy transition, and infrastructure projects, with non-residential investment showing resilience despite soaring interest rates. However, TD Economics expects major projects to wind down, impacting investment in 2024. Residential investment has fallen due to rising borrowing costs, but real estate activity is picking up, driven by population growth and undersupply. Core inflation has increased, and the Bank of Canada (BoC) will monitor key metrics closely as it contemplates another interest rate hike. Rate cuts are pushed back to the second quarter of the next year, with a focus on core inflation metrics reaching the BoC’s 2% target. The Canadian dollar (CAD) is expected to have a near-term upside against the US dollar (USD) as the BoC keeps pace with the Fed. However, as the policy rate approaches 5%, interest rate differentials will play a smaller role. Energy price fluctuations will have less influence on the CAD compared to the past, as the US becomes a net-energy exporter.
Don’t Miss: 10 Undervalued Canadian Stocks To Invest In
Bloomberg reported on July 24 that a group of economists now predict that the Canadian economy will experience a soft landing rather than a recession this year, despite interest rates reaching a 22-year record high. According to a recent monthly Bloomberg survey of 27 economists, the economy is expected to stall in the latter half of 2023 but not contract. The median forecast suggests that the Bank of Canada will maintain its overnight rate at 5% until well into the following year, with no rate cuts until April. Governor Tiff Macklem stated this month that policymakers are looking to strike a balance between the risks of tightening the economy too much or too little, aiming to avoid unnecessary economic hardships for everyone. The economists’ projections indicate that the gross domestic product (GDP) will grow by 0.4% in the third quarter and remain steady in the final quarter of this year. This contrasts with last month’s survey, which predicted a slight contraction in both quarters, referred to as a technical recession. The economists believe that the current policy rate of 5% is the highest point the Bank of Canada will reach before starting to implement rate cuts in the second quarter. The next decision by Macklem and his officials will be announced on September 6.
Normally, investors tend to favor safe Canadian stocks such as Canadian Pacific Kansas City Limited (NYSE:CP), Shopify Inc. (NYSE:SHOP), and Nutrien Ltd. (NYSE:NTR). However, factors like budget limitations, skepticism about the stock market, the desire for long-term gains through inexpensive stocks, or the need for diversification might lead investors to seek out cheaper stocks. In this article, we discuss 10 best Canadian stocks priced under $10.
Our Methodology
We selected the Canadian stocks which were priced under $10 as of July 25 and sorted them based on the hedge fund sentiment toward each stock. We have assessed the hedge fund sentiment from Insider Monkey’s database of 943 elite hedge funds tracked as of the end of the first quarter of 2023. The list is arranged in ascending order of the number of hedge fund holders in each firm.
Photo by Austin Distel on Unsplash
Best Canadian Stocks Under $10
10. Sandstorm Gold Ltd. (NYSE:SAND)
Number of Hedge Fund Holders: 14
Share Price as of July 25: $5.56
Sandstorm Gold Ltd. (NYSE:SAND) is a gold royalty company acquiring royalties and purchase agreements for gold and other metals from companies engaged in advanced stage development projects or operating mines. Sandstorm Gold Ltd. (NYSE:SAND) was incorporated in 2007 and is headquartered in Vancouver, Canada. During the quarter ending on June 30, 2023, the company achieved a notable milestone by selling approximately 24,500 ounces of gold equivalent, resulting in a record preliminary revenue of $49.8 million. In comparison, for the same period in 2022, Sandstorm Gold Ltd. (NYSE:SAND) sold around 19,276 ounces of gold equivalent, generating $36 million in revenue.
According to Insider Monkey’s first quarter database, 14 hedge funds were bullish on Sandstorm Gold Ltd. (NYSE:SAND), compared to 16 funds in the prior quarter. Murray Stahl’s Horizon Asset Management is the leading stakeholder of the company, with 6.13 million shares worth $35.6 million.
Like Canadian Pacific Kansas City Limited (NYSE:CP), Shopify Inc. (NYSE:SHOP), and Nutrien Ltd. (NYSE:NTR), Sandstorm Gold Ltd. (NYSE:SAND) is one of the best Canadian stocks to look out for.
9. New Gold Inc. (NYSE:NGD)
Number of Hedge Fund Holders: 15
Share Price as of July 25: $1.24
New Gold Inc. (NYSE:NGD) is a Toronto-based intermediate gold mining company that is involved in the exploration, development, and operation of mineral properties. Its main focus is on exploring for deposits of gold, silver, and copper. New Gold Inc. (NYSE:NGD) is one of the best Canadian stocks to invest in. On April 26, the company reported a Q1 non-GAAP EPS of $0.03, beating Wall Street estimates by $0.01. The revenue increased 15.4% on a year-over-year basis to $201.6 million, topping market consensus by $9.89 million.
According to Insider Monkey’s first quarter database, 15 hedge funds were bullish on New Gold Inc. (NYSE:NGD), compared to 14 funds in the prior quarter. Eric Sprott’s Sprott Asset Management is the largest stakeholder of the company, with a position worth $14.6 million.
8. BlackBerry Limited (NYSE:BB)
Number of Hedge Fund Holders: 15
Share Price as of July 25: $4.715
Founded in 1984, BlackBerry Limited (NYSE:BB) is a Canadian firm specializing in cybersecurity enterprise software and services. Previously, the company also provided Blackberry smartphones, which are now discontinued. On June 28, BlackBerry Limited (NYSE:BB) reported a Q1 non-GAAP EPS of $0.06 and a revenue of $373 million, outperforming Wall Street estimates by $0.11 and $213.71 million, respectively. BlackBerry Limited (NYSE:BB) is one of the best Canadian stocks priced under $10.
According to Insider Monkey’s first quarter database, 15 hedge funds were bullish on BlackBerry Limited (NYSE:BB), with collective stakes worth nearly $260 million. Prem Watsa’s Fairfax Financial Holdings is a prominent stakeholder of the company, with 46.7 million shares worth $213 million.
7. Crescent Point Energy Corp. (NYSE:CPG)
Number of Hedge Fund Holders: 16
Share Price as of July 25: $7.99
Crescent Point Energy Corp. (NYSE:CPG) is a Canadian energy company that focuses on exploring, developing, and producing light and medium crude oil, natural gas liquids, and natural gas reserves in Western Canada and the United States. Crescent Point Energy Corp. (NYSE:CPG) is one of the best Canadian stocks to invest in.
On May 29, Crescent Point Energy Corp. (NYSE:CPG) announced that it has successfully resumed full production of 45,000 boe/day at the Kaybob Duvernay shale play, which had been temporarily halted due to the Alberta wildfires. Despite the challenges faced during Q2 because of the wildfires, the company maintained its original guidance for the year, with an expected average production ranging from 160,000 boe/day to 166,000 boe/day.
According to Insider Monkey’s first quarter database, 16 hedge funds were bullish on Crescent Point Energy Corp. (NYSE:CPG), compared to 24 funds in the prior quarter. Thomas E. Claugus’ GMT Capital is the leading position holder in the company, with 4.7 million shares worth $33.6 million.
6. AbCellera Biologics Inc. (NASDAQ:ABCL)
Number of Hedge Fund Holders: 19
Share Price as of July 25: $7.80
AbCellera Biologics Inc. (NASDAQ:ABCL) builds a specialized engine aimed at antibody drug discovery and development. This engine is designed to identify antibodies sourced from natural immune responses, which have been pre-enriched for their antibody properties. On May 24, AbCellera Biologics Inc. (NASDAQ:ABCL) disclosed a joint funding venture with the Governments of Canada and British Columbia, totaling C$701 million. The initiative seeks to advance the development, research, and production of antibody-based medications. AbCellera Biologics Inc. (NASDAQ:ABCL) will invest C$401 million over the next eight years, while Canada and British Columbia will contribute C$225 million and C$75 million, respectively. The joint project intends to initiate up to 17 drug development programs focused on novel antibody therapies, with a primary focus on cancer and immune diseases.
According to Insider Monkey’s first quarter database, AbCellera Biologics Inc. (NASDAQ:ABCL) was part of 19 hedge fund portfolios, compared to 25 in the prior quarter. Julian Baker and Felix Baker’s Baker Bros. Advisors is the largest position holder in the company, with 10.4 million shares worth $78.7 million.
In addition to Canadian Pacific Kansas City Limited (NYSE:CP), Shopify Inc. (NYSE:SHOP), and Nutrien Ltd. (NYSE:NTR), AbCellera Biologics Inc. (NASDAQ:ABCL) is one of the best Canadian stocks to invest in.
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Disclosure: None. 10 Best Canadian Stocks Under $10 is originally published on Insider Monkey.
