10 Worst Affordable Stocks Under $10

2. Sasol Limited (NYSE:SSL)

Share Price: $6.85

Forward P/E Ratio: 2.86 

Earnings Growth This Year: 174.40% 

Number of Hedge Fund Holders: 11

Sasol Limited (NYSE:SSL) is an international producer of chemicals and energy. The company has two main divisions Energy and Chemical, with Energy dealing in mining, gas, and fuel production. Whereas the Chemical division deals in manufacturing advanced materials, base chemicals, and other performance solutions. The company uses the proprietary Fischer-Tropsch technology to manufacture fuel from natural gas and coal. It is also one of the largest chemical and oil producers in the South African region.

Sasol Limited (NYSE:SSL) is valued cheaply, with a forward P/E at 2.86, around 82.80% discount to its sector. However, the company has faced macroeconomic challenges, with year-over-year turnover and margins going down 5% and 1% respectively. Moreover, earnings across all its major operations including mining, gas, fuel, and chemicals also took a hit and were down on a year-over-year basis. It is one of the worst affordable stocks under $10 with only 11 institutional investors having stakes in the company.

However, there is some silver lining for Sasol Limited (NYSE:SSL). While the market condition has been tough the company was still able to pull off a few positive highlights from its fiscal 2024 fourth-quarter results. Its productivity and sales volumes were up when compared to last year, with Mozambique gas production improving the most by 6%.

Moreover, management was able to reduce its capital expenditure by 2$ during the year, while improving the free cash flow generated during the second half of the year. Although the free cash flow was considerably down when analyzed every year. However, cash flow generation during the second half of FY24 was almost 100% more than the first half indicating a strong comeback.

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.”