10 Stocks Under $10 With High Potential

8. Sasol Limited (NYSE:SSL)

Share Price: $6.67

Analyst Upside Potential: 67.76% 

Sasol Limited (NYSE:SSL) is one of the largest chemical and oil producers in the South African region. The company operates through two main segments namely Chemical and Energy. It uses the proprietary Fischer-Tropsch technology to develop fuel from natural gas and coal.

Although the company has been facing some challenges as indicated by its F24 year-end financial results. However, analysts still believe that it will bounce back, 8 analysts have a consensus Buy rating on the stock with their average price target pointing towards a 68% upside from current levels.

When we compare the F23 with the most recent year we see that the company suffered a 3% decrease in Brent Crude Oil production, a 35% decrease in Ethane production, and around 8% less Polyethylene production during the most recent year. As a result, its overall turnover and margins were down 5% and 1%, respectively.

This was just one side of the story. On the bright side, Sasol Limited (NYSE:SSL) improved its mining productivity by 3%, whereas its Mozambique gas production was up 6%. Management has been focused on reducing the capital expenditure; it was able to reduce the capEx by 2% year-over-year. Another important indicator to look at while analyzing a company is Free Cash Flow. Sasol Limited (NYSE:SSL) took a hit in free cash flow generation every year, however, if we compare the H1 and H2 of 2024, we see that the company improved its cash flow by 100%.

Looking ahead, the company remains focused on prudent and disciplined spending. It is one of the best stocks under $10 with high potential on our list.

White Falcon Capital Management made the following comment about Sasol Limited (NYSE:SSL) in its second quarter 2023 investor letter:

“Precious Metals Royalty basket (WPM, Sasol Limited (NYSE:SSL), TFPM): In the current macroeconomic environment, there are many ways to ‘win’ with gold. It is remarkable that even with record positive real yields, gold is flirting with all time highs. Why? Western central banks are increasing interest rates which means that they will have to pay more interest on the record levels of debt that their government’s owe. Where will the money come from to pay the higher interest expense? The answer is simple – more debt and more money printing! We believe the gold knows this! We believe that precious metals will protect real purchasing power and act as a hedge to the portfolio when macroeconomic uncertainty arises. Owning royalty companies at reasonable valuations gives us a high quality exposure to precious metals without project or cost inflation risks inherent in a mining company.”