In this article, we will look at the 10 Stocks Under $10 With High Potential.
How Does the Market Look Like in the Current Geopolitical Environment
There has been ongoing geopolitical in the Middle East, which escalated recently when Iran launched a series of missiles toward Israel. These tensions are no longer restricted to just the Middle East but are having impacts globally. On October 1st Reuters reported that the Iraqi armed groups have threatened to attack US bases in Iraq and the region if it joins forces in response to its strike on Israel.
Tom Lee, managing partner and head of research at Fundstrat Global Advisors, appeared on CNBC to discuss what the stock market looks like in the current geopolitically tense environment. Lee has been bullish on small caps for a long time however, he has also remained cautious regarding some bumps in the start before the market for small caps starts to rise. He maintained a bullish stance, projecting a year-end target of 6,000 for the S&P 500, despite acknowledging potential short-term volatility due to upcoming events like the election and geopolitical tensions in the Middle East.
He emphasized that current market conditions are tricky, with headline risks stemming from a potential port strike that could impact the economy. Lee suggested that if a significant dip occurs, it would be a good opportunity to buy, as he believes the long-term outlook remains positive despite temporary setbacks.
Talking about how the market has performed during wars in the past. Lee noted that historically, market reactions to geopolitical conflicts have often been more positive than anticipated. He cited past conflicts where buying during initial downturns proved beneficial, except for the recent Russia-Ukraine war which went otherwise due to concurrent Federal Reserve tightening.
He also discussed the implications of the ongoing longshoremen strike, indicating that each week of disruption could reduce GDP by approximately 0.3%. Lee believes that if this leads to a weakening labor market, the Fed might adopt a more dovish stance, meaning more interest cuts and money supply by the Fed.
China is one of the silver linings in the current market environment, Lee thinks China is currently one of the best-performing markets this year. He believes there is significant room for improvement in the Chinese market due to its historical underperformance when compared to the United States Market.
In one of our recent articles about the 8 Most Active US Stocks To Buy Now, we talked about how the market is expected to remain resilient moving into the elections. Here’s a piece from the article:
Liz Young Thomas, SoFi head of investment strategy, joined ‘Squawk Box’ at CNBC on September 30 and shared her insights regarding the market’s trajectory as it approaches an easing cycle. She acknowledged that while there has been a significant run-up leading to this cycle, much of the substantial gains may have already been realized.
However, she noted that this does not necessarily mean the market will slow down immediately. Historically, after the first rate cut, markets tend to remain flat or slightly up in the following 30 to 60 days. 3 months post-cut, the market evaluates whether these cuts were necessary due to cooling economic conditions or if they were merely opportunistic adjustments.
Young highlighted several positive factors contributing to the current market rally. Despite a slight pullback in technology stocks, she observed that many other stocks are performing well, with 80% of the S&P 500 trading above their 200-day moving averages. This indicates a strong internal market dynamic. Additionally, optimism surrounding potential stimulus measures from China adds further support to market sentiment.
When discussing valuation concerns, Young agreed that while US market multiples are relatively high, hovering around 21 to 22, this is not unprecedented when compared to historical standards. She pointed out that current valuations are above both the 5-year and 10-year averages but not at overbought levels. Young referenced Warren Buffett’s long-term investment philosophy, emphasizing that he does not focus on timing market multiples but rather on fundamental growth.
Young expressed a desire for the market to shift towards trading based on fundamentals rather than multiple expansions. She noted that while earnings stability is crucial, there are signs of strength in sectors outside of technology, particularly in industrial stocks. However, financials have shown mixed signals.
Let’s now look at the 10 stocks $10 with high potential.
A graph plotting the trends and performance of stocks on the public equity markets.
Our Methodology
To compile a list of 10 stocks under $10 with high potential, we used the Finviz stock screener. Using Finviz we screened stocks trading below the share price of $10 with analyst price target above 50%. Once we had an aggregated list we ranked these stocks based on the analyst upside potential sourced from CNN. Please note that the share price is accurate as of October 1st, 2024.
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 Stocks Under $10 With High Potential
10. Transocean Ltd. (NYSE:RIG)
Share Price: $4.25
Analyst Upside Potential: 52.94%
Transocean Ltd. (NYSE:RIG) is an international provider of offshore contract drilling services for the oil and gas industry. The company differentiates itself through its ability to operate in technically demanding environments including deepwaters and harsh conditions. As of recent reports, the company’s fleet comprises 26 ultra-deepwater floaters, 8 harsh environment floaters, and other drilling units for specific operational needs. Transocean Ltd. (NYSE:RIG) is one of the best stocks under $10 with high potential.
Transocean Ltd. (NYSE:RIG) has recently been landing a series of contract wins. On September 10 the company announced a one-year contract for the Deepwater Atlas with BP in the United States Gulf of Mexico. The program will start in the second quarter of 2028 and is expected to add $232 million to the company’s backlog.
Moreover, the company also announced a 300-day program with Reliance Industries Limited For the Dhirubhai Deepwater KG1 for six wells offshore in India. This project is set to start in the second quarter of 2026 and will add approximately $123 million to its backlog.
These recent contracts indicated two main strengths of the company. First its global reach with operations running internationally and second, a robust project backlog which puts the company on route to long-term growth. During the second quarter of 2024 as well, the company demonstrated its ability to drive substantial revenues. Its total contract drilling revenue reached $861 million during the quarter, which was a robust increase from the same quarter the previous year.
Carillon Scout Mid Cap Fund stated the following regarding Transocean Ltd. (NYSE:RIG) in its fourth quarter 2023 investor letter:
“Transocean Ltd. (NYSE:RIG), a leader in deepwater offshore drilling rigs, was next among the losers in a generally weak energy group. Oil fell from recent highs, partially driven by Mideast tensions, and this hurt sentiment in the energy sector despite little change in offshore rig day-rate pricing or long-term fundamentals.”
9. Geron Corporation (NASDAQ:GERN)
Share Price: $4.54
Analyst Upside Potential: 54.19%
Geron Corporation (NASDAQ:GERN) is a biopharmaceutical company that focuses on developing treatments for blood cancer-related diseases. The company develops a drug called imetelstat, which targets enzymes that cancer cells use for growth, thereby controlling its spread.
The company has gained significant spotlight recently due to its launch of the first commercial product RYTELO (imetelstat). Geron Corporation (NASDAQ:GERN) gained FDA approval on June 6 and has gained significant sales from the product. The company announced its second-quarter results in August. The revenue for the quarter amounted to $882,000 up around 2938.10% year-over-year.
The quick adoption of the drug for blood cancer treatment can be estimated by the fact that during the first 60 days of its approval, the drug was already being used by 160 patients. This indicates a promising start for the company.
Another impressive news that adds to the investment case for the company came in from the National Comprehensive Cancer Network. The Network updated the MDS NCCN Clinical Practice Guidelines in Oncology to include RYTELO for the treatment of anemia patients with LR-MDS.