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.
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.”
7. Patterson-UTI Energy, Inc. (NASDAQ:PTEN)
Share Price: $7.65
Analyst Upside Potential: 69.93%
Patterson-UTI Energy, Inc. (NASDAQ:PTEN) is a prominent company that provides essential services for the oil and gas extraction industry. The company helps companies in drilling by offering drilling rigs and crew to operate the project. The company specializes in using technology that allows drilling at different angles allowing access to resources that are otherwise not extractable.
The company has merger deals with NexTier Completion Solutions to have a portfolio of industry-leading drilling services. Moreover, it has also acquired Ulterra Drilling Technologies which not only puts the company in a leading position in PDC bits but also helps broaden the international footprint.
The company has a significant presence in North America. As per the company’s September investor presentation, Patterson-UTI Energy, Inc. (NASDAQ:PTEN) stands as the 3rd largest offer of sale in the North American region by revenue.
During the second quarter of 2024, the company reported revenue of $1.3 billion and a net income of $11 million indicating its strong financial position in the market. Patterson-UTI Energy, Inc. (NASDAQ:PTEN) also reported significant cash generation from operations. Its cash from operations amounted to $563 million.
Recently, the company announced signing an agreement with ADNOC Drilling to formalize its joint venture in the UAE. This will expand its presence in the Middle East region. Patterson-UTI Energy, Inc. (NASDAQ:PTEN) is one of the best stocks under $10 with high potential. Analysts are expecting the stock price to jack up by around 70% during the year.
Bernzott Capital Advisors US Small Cap Value Fund stated the following regarding Patterson-UTI Energy, Inc. (NASDAQ:PTEN) in its fourth quarter 2023 investor letter:
“Patterson-UTI Energy, Inc. (NASDAQ:PTEN): Lower energy prices and depressed rig counts caused the underperformance during the quarter. Recently completed merger with NextTier Oilfield Solutions and the acquisition of Ulterra should drive improved cash flow and cost synergy opportunities.”
6. Cosan S.A. (NYSE:CSAN)
Share Price: $9.56
Analyst Upside Potential: 74.81%
Cosan S.A. (NYSE:CSAN) is a holding company that operates in several key sectors primarily focusing on bioenergy and fuel distribution. There are 5 main key business segments of the company. The Raízen Energia segment produces and distributes products derived from sugarcane, such as raw sugar and ethanol. It also generates energy using the leftover sugarcane material. On the other hand, the Raízen Combustíveis deals with fuel distribution operations. Moreover, the Comgás segment focuses on the distribution of natural gas and the Radar segment manages buying and selling of agricultural lands.
The company not only operates as one of the largest lubricants companies in Brazil but it is also the country’s largest individual sugar exporter globally. Management has been focused on developing capital discipline and is paying attention to leverage the interest rates.
During the quarter Cosan S.A. (NYSE:CSAN) was able to improve its EBITDA by BRL 6.2 billion ($1.14 billion) in Q2 2023 to BRL 7.1 billion ($1.31 billion) in Q2 2024. This was mainly due to higher transported volumes in its Rumo segment, where transported volumes were up 3% year-over-year. Moreover, management’s strategy of executing its commercial strategy and procurement intelligence is also coming in handy in improving the earnings.
5. Veren Inc. (NYSE:VRN)
Share Price: $6.15
Analyst Upside Potential: 76.23%
Veren Inc. (NYSE:VRN) is a leading oil and natural gas exploration company that operates in the United States and Canada. It focuses on exploring and producing Crude Oil, Tight Oil, Natural gas, and other related products. The three main sites namely Alberta Monteny, Kaybob Duvernay, and Saskatchewan contributed around 50%, 25%, and 25% respectively to the overall production of the company.
Veren Inc. (NYSE:VRN) has significantly improved its production during the current fiscal year and is on the road to meeting its targets. The second quarter 2024 earnings release revealed that the company is producing 192,500 barrels of oil per day. This production rate is in line with its production guidance for the year which stands at 191,000 to 199,000 barrels of oil per day.
As a result of a strong production rate, the company was able to generate significant income from its operations. Adjusted funds flow from operations was recorded at $611.7 million. One of the more significant milestones for Veren Inc. (NYSE:VRN) came in the form of debt reduction. It was able to reduce $620.2 million during the quarter and ended the quarter with $2.96 billion in debt.
Recently, management announced entering into a long-term strategic partnership with Pembina Gas Infrastructure (“PGI”) for certain infrastructure assets in the Alberta Montney location. It is said to make $400 million from the proceedings which will be used to reduce the debt further. Moreover, the partnership will also grant operational access to additional battery sites, thereby further enhancing its production efficiency and would help reduce operating costs.
Veren Inc. (NYSE:VRN) has grown its top line by 23% during the past 3 years and its current growth trajectory points towards continued growth momentum.
4. VinFast Auto Ltd. (NASDAQ:VFS)
Share Price: $3.82
Analyst Upside Potential: 83.25%
VinFast Auto Ltd. (NASDAQ:VFS) is an automotive company based in Vietnam. It focuses on manufacturing electric vehicles (EVs), e-scooters, and e-buses. The company has developed a diverse portfolio of electric vehicles with VF e34, VF 8, VF 9, and other models, each offering different features and capabilities.
The progress made by the company is evident from a stark increase in EV deliveries during the second quarter of 2024. The company delivered 13,172 vehicles during the quarter, which was up 44% year-over-year. Moreover, its E-scooter deliveries were also impressive at 13,076 indicating a 67% increase from the first quarter and a 28% increase year-over-year.
VinFast Auto Ltd. (NASDAQ:VFS) aims to deliver more than 80,000 electric vehicles during the year, the goal represents a significant increase from 2023 figures.
The strong quarterly performance backed with the ambitious goal of achieving more sales during the year makes VFS one of the best stocks under $10 with high potential.
Management has been taking significant measures to ensure the expanding reach of the company. On September, 17 it announced the launching of the VF 3 electric vehicles in the Philippines. Moreover, earlier the company had announced the launch of its VF e34 model in Indonesia as well. In the Middle East, it has signed a dealership agreement with Al Mana Holding to capture the Qatar market as well.
These partnerships make it evident that the company will have a strong international presence in the future making it a compelling investment opportunity.
3. PagSeguro Digital Ltd. (NYSE:PAGS)
Share Price: $8.61
Analyst Upside Potential: 85.34%
PagSeguro Digital Ltd. (NYSE:PAGS) is a digital finance company based in Brazil. It offers a free digital account called PagBank, moreover, it also provides businesses with point-of-sale (POS) devices and mobile POS (mPOS) systems to help them with payment solutions.
If you are looking for a profitable company that is cheap and has a high growth potential, PagSeguro Digital Ltd. (NYSE:PAGS) might be just the right fit for you. In the second quarter of 2024, revenue for the company grew 19% in local currency and gross margins for the quarter were high at 40%. Net income was also not shy it improved 31% year-over-year. The improved financial figures were on the back of strong growth in its client base indicating that the company is growing at a fast pace.
The investment case for the company becomes ever more irresistible if we go a little back in time. Since its IPO there has not been a single year of loss for the company. For instance, its 2023 revenues were up 9% from the previous year, whereas its 2022 revenues were up 47% from 2021. What’s more impressive is its growing market share, which has grown from 1% in 2016 to 11% in 2022.
PagSeguro Digital Ltd. (NYSE:PAGS) is also trading at a cheap valuation with forward P/E at 6.68 and its earnings are expected to grow by 16% during the year. 19 analysts have a consensus Buy rating on the stock and their 12-month median price target represents an upside of 85% from current levels.
2. Joby Aviation, Inc. (NYSE:JOBY)
Share Price: $5.03
Analyst Upside Potential: 88.87%
Joby Aviation, Inc. (NYSE:JOBY) is a transportation company that focuses on developing electric air taxis for commercial passenger service and logistic transportation. The company is engaged in developing an electric vehicle that can vertically take off and land as a helicopter but will fly like an airplane. The taxis designed by the company have the potential to carry a pilot and four passengers while traveling at a speed of 200 miles per hour.
While all of this seems to be decades away from reality, however as per the company’s second-quarter earnings release it has rolled its third production prototype aircraft off the company’s pilot production line in Marina. Moreover, it expects four aircraft to be in active flight testing during the next quarter.
The global helicopter market was valued at $57 billion in 2022 and is expected to grow at a steady rate to reach $76 billion by 2030. Within the greater market, the light and ultralight aircraft are projected to reach $18 billion by 2028. It is expected that Joby Aviation, Inc. (NYSE:JOBY) will capture at least 20% of the market by 2040.
If the expectations come true, it will mean that the company will have a valuation of around $15 billion and margins of 15% resulting in a solid growth-oriented company.
Joby Aviation, Inc. (NYSE:JOBY) has already applied for certification in Australia and signed a memorandum of understanding with Mukamalah, a wholly-owned subsidiary of Saudi Aramco to introduce its aircraft for direct sales in the kingdom.
Looking at its balance sheet, the company maintained a strong $825 million in cash and short-term investments by the end of the second quarter of 2024. Analysts are vouching for its growth and JOBY is one of the best stocks under $10 with high potential.
1. Iovance Biotherapeutics, Inc. (NASDAQ:IOVA)
Share Price: $9.39
Analyst Upside Potential: 150.27%
Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) is a clinical-stage biopharmaceutical company that focuses on developing cancer treatments using a unique method called tumor-infiltrating lymphocyte (TIL) therapy.
Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) is the best stock to buy under $10 with high potential. The investment case for this biotechnology company is based on several reasons.
The first is the news that the company is set to open around 70 authorized treatment centers in the United States. Why is this important for the company? To understand this we need to look deeply into its treatment.
The company uses Amtagvi to treat patients with melanoma using the TIL therapy method. This method uses the body’s immune cells to fight cancer, specifically targeting solid tumors, which are often more difficult to treat than blood cancers. This treatment requires a month to culture the samples and also requires authorized treatment centers to take samples and keep the patients in care for at least a week.
This is where the news of setting up 70 authorized treatment centers becomes significant. With fewer treatment centers the addressable market of the company was restricted as it was difficult for patients to travel for the treatment. However, with a center in a 200 mile radius around 90% of the patients will automatically become eligible for the treatment thereby placing the company on a growth trajectory.
The second reason why Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) could be a solid investment case lies in its pipeline which indicates there is more growth to come. Currently, the therapy used by the company is not the first-line treatment. However, the company is in phase 3 of clinical trials to test whether Amtagvi is used in combination with the current first-line treatment drug. If the trial is successful the therapy will become the first line of treatment thereby increasing the total addressable market for the company.
Artisan Small Cap Fund stated the following regarding Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) in its Q2 2024 investor letter:
“Among our top detractors for the quarter were Lattice Semiconductor and Iovance Biotherapeutics, Inc. (NASDAQ:IOVA). Iovance Biotherapeutics is a biotechnology company focused on innovating, developing and delivering novel polyclonal tumor-infiltrating lymphocyte (TIL) cell therapies for cancer patients. The stock rallied significantly in Q1 after announcing that the FDA approved AMTAGVI™ (lifileucel) for advanced melanoma. Now that the scientific risk is behind the company, investor focus has shifted to the company’s commercial execution, and shares experienced weakness after the company reported earnings results. It announced the enrollment of more than 100 patients for therapy; however, this was not enough to alleviate investor concerns about patient attrition. In our view, there is no issue with the efficacy of its life-saving treatment. Headwinds have been caused by challenges in ramping production, which is understandable in the early days. We view these concerns as overblown and remain invested.”
While we acknowledge the potential of Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for a promising AI stock that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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