In this article, we will discuss: 13 Best Growth Stocks Under $10 to Buy.
After a summer dip, stocks recovered in Q3 2024, setting new records after the quarter. More than 60% of the 500 largest companies’ components outperformed the overall index that covers these stocks in the quarter. The index that tracks the 500 largest companies traded in the US is up more than 20% year-to-date, at record-high levels. Bonds also fared well, helped by declining inflation and the Federal Reserve’s aggressive half-percentage-point drop, which indicated a move away from combating inflation and toward promoting growth. Fed rate reductions boost small-cap companies, industries, and regional banks.
Value and small-cap companies overtook large tech in the major rotation that occurred during the general stock market rally. Subsequently, expensive large-cap growth names lost investor attention, while previously underperforming markets saw strong gains. The consolidation of technology is a positive development, according to King Lip, chief strategist at BakerAvenue Wealth Management. He states that ” “We’re not in a bear market for tech by any means. But you’ve definitely seen some evidence of rotation.”
Nonetheless, in Q3 2024, eight of the 500 largest companies’ eleven sectors outperformed the broader index of these 500 companies. According to Tajinder Dhillon, senior research analyst at LSEG, the Magnificent Seven companies are predicted to raise earnings by almost 20% in the third quarter of 2024, compared with a profit rise of 2.5% for the rest of the 500 largest companies. That disparity is predicted to diminish in 2025, with the remainder of the index expected to raise earnings by 14% for the full year against a 19% rise for the mega-cap group.
The Magnificent Seven “should not have to carry the profit rebound alone,” according to Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, in recent research, providing a soft landing scenario. ” “For the soft landing, we are in the ‘show me’ stage.”
Moreover, soft employment figures helped allay concerns about a recession and modest inflation. Even though the unemployment rate has increased, the overall economic trend points to strong, albeit sluggish, growth. The market is now even more optimistic due to the Fed’s aggressive rate decrease and the likelihood of future rate reductions.
It is anticipated by Morningstar analysts that the “great rotation” away from large-cap tech stocks would continue as Q4 approaches, presenting opportunities in undervalued industries. The financial services, real estate, energy, and healthcare industries are expected to grow as per Morningstar analysts, particularly with the current decline in interest rates.
According to Morningstar analysts, going ahead, the possibility of additional rate cuts and higher government expenditure in this election year should boost markets, but prudence is still advised because lower-income people are still being negatively impacted by continued inflationary pressures. Value stocks and industries with strong prospects for future recovery should be the main focus of investors.
With that said, here are the 13 Best Growth Stocks Under $10 to Buy.
A financial planner analysis their portfolio and making decisions on stocks and assets.
Methodology:
We sifted through holdings of iShares Morningstar Small-Cap Growth ETF to form an initial list of 20 highest-weighted Growth Stocks Under $10 in the ETF. Then we selected the 13 stocks that were the most popular among hedge funds as of Q2, 2024. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q2 2024. We have used the stocks’ current market cap as a tie-breaker in case two or more stocks have the same number of hedge funds invested.
Why are we interested in the stocks that hedge funds pile into? 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)
13. Plug Power Inc. (NASDAQ:PLUG)
Number of Hedge Fund Investors: 15
An entire green hydrogen ecosystem, including energy generation, storage, delivery, and production, is being constructed by Plug Power Inc. (NASDAQ:PLUG). It intends to construct and run green hydrogen roads throughout Europe and North America. Plug plans to supply its environmentally friendly hydrogen solutions to a variety of end markets, such as material handling, e-mobility, power generation, and industrial applications, both directly to its clients and through joint venture partners.
Being at the forefront of the green hydrogen economy is Plug Power’s goal. Its vertical integration method, which offers customers a whole hydrogen solution from fuel cells and electrolyzers to green hydrogen fuel, is the core of its business strategy.
Even though the firm’s 2024 second-quarter earnings missed analysts’ projections due to lower revenue, it is important to recognize the company’s potential improvements in focusing on profitability and cash generation, as shown by the recent hiring of a new COO from Amazon and slight increases in gross margins.
Plug Power Inc. (NASDAQ:PLUG) leads the worldwide green hydrogen market, despite the fact that battery electric technology is a rival to fuel cells in the transportation end markets.
The company is working hard to increase the number of electrolyzers it deploys on the ground. In the second quarter of 2024 alone, the company launched systems valued at over $70 million. And by the end of the year, plans are in place to install an additional 100 MW of electrolyzers.
Daniel Katzner’s Skaana Management is the largest stakeholder in the company from among the funds in Insider Monkey’s database. It owns 2,250,000 shares worth $2.10 million as of Q2.
12. Yext, Inc. (NYSE:YEXT)
Number of Hedge Fund Investors: 19
Yext, Inc. (NYSE:YEXT) is a knowledge engine platform that enables companies to manage their digital knowledge on the cloud and sync it with over 200 services, such as Yelp, Apple Maps, Bing, Cortana, Facebook, Google, Instagram, and Google Maps. The structured information that a company wishes to make available to the general public is known as digital knowledge. Additionally, the company contributes to the intelligence of search by helping to deliver exact, accurate, and up-to-date responses to location-based queries made using voice and artificial intelligence (AI) engines, as well as mobile applications and the web. Subscription services are where the majority of the company’s income comes from. In terms of location, North America accounts for the lion’s share of the company’s revenue, with international markets providing the remaining portion.
The company’s notable margin expansion was shown by its Q2 fiscal 2025 figures. This resulted from its emphasis on operational effectiveness, which set up the company for future expansion and financial success. It is still working on its long-term strategic measures to fortify the business.
It is anticipated that Yext’s AI-powered digital presence management combined with Hearsay’s text, social media, and speech features would maximize consumer engagement and performance across channels.
Ryan MacDonald, an analyst at Needham, raised his price target for Yext, Inc. (NYSE:YEXT) from Hold to Buy, citing $8. The analyst informs investors in a research note that the company’s Q2 results offered more clarity on the underlying trajectory of the business in the wake of the recent Hearsay acquisition. The firm claims Yext management has created a “strong and consistent” track record of generating incremental leverage in the business model. Despite integrating an asset that initially dilutes, Needham sees “plenty of room for material” additional margin expansion over the following 12-18 months. It also thinks that Yext’s revised projection for the second half of 2025 is “appropriately conservative.” Needham argues that investors are attracted to the risk/reward ratio at the moment.
Mitchell Green’s Lead Edge Capital is the largest stakeholder in the company from among the funds in Insider Monkey’s database. It owns 11,474,281 shares worth $61.38 million as of Q2.
11. Viavi Solutions Inc. (NASDAQ:VIAV)
Number of Hedge Fund Investors: 21
A biotechnology startup in the development stage, Viavi Solutions Inc. (NASDAQ:VIAV) is dedicated to creating small-molecule medications that address metabolic and cardiovascular conditions.
The company’s net revenue for Q4 2024 was $252 million, in line with its projection, and a 2.4% sequential gain but a 4.4% YoY decline. However, revenue for the Optical Security and Performance (OSP) segment rose 6.2% YoY.
Viavi’s earnings per share for Q4 2024 were $0.08, above the upper end of the guidance range, and its operating margin was 10.9%, above the midpoint of the company’s guidance.
A reorganization plan has also been started by the firm, with the goal of achieving annualized cost reductions of about $25 million by the end of the fiscal year 2025. The company projects revenue for the first quarter of fiscal 2025 to be between $235 million and $245 million.
Stifel maintained a Buy rating on the Viavi Solutions Inc. (NASDAQ:VIAV) shares and dropped the company’s price target from $13 to $10.50. Analysts note that industry-wide demand headaches persist and believe this could continue to weigh on medium-term results, even though the firm expects June quarter results in line to slightly above estimates and believes Viavi is well-positioned to take advantage of end demand recovery tailwinds.
Glenn Russell Dubin’s Highbridge Capital Management is the largest stakeholder in the company from among the funds in Insider Monkey’s database. It owns 41,500,000 shares worth $39.39 million as of Q2.
10. Kosmos Energy Ltd. (NYSE:KOS)
Number of Hedge Fund Investors: 25
Kosmos Energy Ltd. (NYSE:KOS) is an independent oil and gas production and exploration firm that specializes in developing and frontier regions around the Atlantic Margin. The firm specializes in field innovations meant to boost output. The exploration conducted by Kosmos is linked to a geologically based strategy intended to identify petroleum systems. The technique used begins with geology studies that evaluate the subsurface of a region, but it also includes basin modeling, techniques for determining reservoir/seal pair development, and trap definition. Additionally, to find potential traps of interest, a 3D seismic analysis is carried out. Before focusing on particular licenses, a country-specific analysis is conducted in conjunction with the subsurface investigation to gain a better knowledge of above-ground dynamics.
It is among the businesses that will profit most from rising oil and gas prices when the world economy recovers from a period of modest expansion. The company’s revenue growth has been excellent, with an incredible 64.99% YoY increase in revenue in Q2 2024 due to strong production growth amid operational challenges. The figure shows that while KOS’s stock value has been declining, its basic company activities are significantly growing.
Kosmos Energy Ltd. (NYSE:KOS) has made significant progress toward attaining its goal of increasing production by 50%, with output already at 62,000 barrels of oil equivalent per day, a 7% increase over the previous year. The company is committed to producing 90,000 barrels of oil per day by the end of the year, despite project delays and lower production from Ghana’s Jubilee field.
Prioritizing debt repayment and growth finance, the company seeks to produce $100 million to $150 million in free cash flow per quarter. Moreover, a significant turning point for Kosmos is the initiation of production at Winterfell, where Kosmos owns a 25.04% interest.
Samantha Mclemore’s Patient Capital Management is the largest stakeholder in the company from among the funds in Insider Monkey’s database. It owns 9,084,879 shares worth $50.33 million as of Q2.
9. LegalZoom.com, Inc. (NASDAQ:LZ)
Number of Hedge Fund Investors: 26
Market Capitalization as of October 3, 2024: $1.12 billion
LegalZoom.com, Inc. (NASDAQ:LZ) is an online service provider serving American consumers and small businesses with their legal needs. The company also offers services that include continuous compliance and tax guidance and files, business licenses, bookkeeping, virtual mailbox and e-signature solutions, trademark applications, and estate plans.
Meridian Small Cap Growth Fund stated the following regarding LegalZoom.com, Inc. (NASDAQ:LZ) in its Q2 2024 investor letter:
“LegalZoom.com, Inc. (NASDAQ:LZ) is a leading online platform providing small businesses with legal, compliance, and tax services that allow them to start and operate within the required regulations. The stock underperformed during Q2 on weak guidance from management that indicated its small businesses, the company’s core customers, were under pressure. We believe that the company will continue to gain share due to its strong brand and network effects which will allow them to sell a broad range of services to small businesses. We also see room for significant operating leverage as the expanded range of products and services begins to generate revenue after several years of investment. We added to our position during the period on share price weakness.”
Analyst Brent Thill of Jefferies raised LegalZoom from Hold to Buy, maintaining a $8 price target. The analyst tells investors in a research report that the company is “washed out” after falling 41% so far this year and that projections “appear low enough.” LegalZoom is the leading digital player, according to the firm, with a 10% market share of business formations and 70% boosted brand awareness; nevertheless, the market is still very small, with only 4% of legal services performed online in the United States. The company’s revenue growth will not remain around 3%, as Jefferies anticipates a return to double digits, according to the analyst.
William Royan, Khai Ha And Alex Migon’s GPI Capital is the largest stakeholder in the company from among the funds in Insider Monkey’s database. It owns 9,541,916 shares worth $80.05 million as of Q2.
8. Geron Corporation (NASDAQ:GERN)
Number of Hedge Fund Investors: 26
Current Market Capitalization: $2.65 billion
A biopharmaceutical company in the clinical stage, Geron Corporation (NASDAQ:GERN) is dedicated to the study and creation of cancer therapies. The company is testing Imelstat, a medication under development, to treat myelodysplastic syndromes, which are blood abnormalities, and myelofibrosis, a rare blood malignancy that affects the bone marrow. Collaboration agreements, milestones, royalties, and license agreements are how the business makes money. Geron Corporation (NASDAQ:GERN) has several rights to this medication. The company only has one business division, which is the creation of oncology treatment products. It is mainly focused on imetelstat, an anti-cancer treatment that is marketed under the Rytelo brand.
As the first telomerase treatment approved by the FDA in June, Rytelo is gaining traction; 160 patients have already started taking it, and 60% of top accounts have been approached. The medication is being quickly embraced by physicians and patients to treat lower-risk MDS, benefiting about 1,320 people in the US.
As a result of the successful U.S. launch of its first commercial product, Rytelo, the revenue generated during Q2 2024 was $882,000, representing an incredible 2,941.38% growth YoY.
The reasons behind the analyst Corinne Johnson’s Buy rating for Geron Corp are the reimbursement innovations made by Rytelo, such as the CMS permanent J-code, which encourages adoption in smaller practices. Johnson anticipates high near-term revenue potential and $1.2 billion worldwide peak sales, which further supports his belief in Rytelo’s commercial success.
In order to preserve its method of use patent, the company applied for a patent term extension that may last until August 2037. The application for marketing authorization in the European Union is one step closer to realizing the goal of commercializing the treatment and broadening its scope. Additionally, the myelofibrosis clinical trial is moving along well.
Peter Kolchinsky’s RA Capital Management is the largest stakeholder in the company from among the funds in Insider Monkey’s database. It owns 46,202,425 shares worth $195.90 million as of Q2.
7. Coursera, Inc. (NYSE:COUR)
Number of Hedge Fund Investors: 27
Providing accessible, inexpensive, and timely educational content is the aim of Coursera, Inc. (NYSE:COUR), an online learning network that links educators, learners, and institutions. It integrates technology, data, and material into a single, cohesive platform that can be expanded upon and customized for both individual students and educational institutions. The three reporting segments for the company are Degrees, Enterprise, and Consumer. The consumer segment generates the lion’s share of revenue. The consumer segment focuses on individual students who want to start or grow their professions by expanding their knowledge in a variety of ways, including hands-on learning, professional certifications, and the acquisition of useful job skills.
In Coursera, Inc. (NYSE:COUR) second quarter of 2024, the revenue rose by 11% to $170 million YoY, while free cash flow was $17 million as opposed to $12 million in negative free cash flow YoY. However, investors seemed more intrigued by remarks surrounding artificial intelligence (AI).
Over two million people have enrolled in generative AI courses and related materials, according to Coursera’s management. Considering that the company only recently introduced its Generative AI Academy earlier this year, this adoption rate is quite quick. Nevertheless, it still represents a small portion of the 155 million registered customers.
BMO Capital reaffirmed its Outperform rating on the shares and increased its price objective for Coursera from $10 to $11. The analyst informs investors in a research note that the company’s Q2 earnings exceeded expectations and that the management highlighted some momentum in its content portfolio that should benefit in the next quarters.
Nafeesa Gupta, a BofA analyst, began covering the educational content company with a Buy rating and a $11 price target. The online learning platform provider sets itself apart by offering degrees and certifications from recognized universities. The company believes this adds greater value to students, particularly in a competitive job market, than non-degree competitors like Udemy. The analyst, who is optimistic about Coursera’s long-term growth, also notes that the company’s greater focus on unique content might strengthen its defenses through platform-exclusive courses with superior revenue share economics.
Israel Englander’s Millennium Management is the largest stakeholder in the company from among the funds in Insider Monkey’s database. It owns 2,800,912 shares worth $20.05 million as of Q2.
6. SoFi Technologies, Inc. (NASDAQ:SOFI)
Number of Hedge Fund Holders: 29
SoFi Technologies, Inc. (NASDAQ:SOFI), a financial services startup based in San Francisco, was launched in 2011. Initially recognized for student loan refinancing, the company has since expanded its operations to include personal loans, credit cards, mortgages, investment accounts, banking services, and financial advice. The company aims to be a one-stop shop for its clients’ finances, operating only through its mobile app and website. The company also provides debit card payment and account services, as well as digital banking, after acquiring Galileo in 2020.
The firm focuses on youthful, high-income customers who may be underrepresented by traditional full-service banks. It is entirely digital, communicating with its customers primarily via its mobile app and website. Unlike previous digital banks, which typically have restricted product offerings, SoFi Technologies, Inc. (NASDAQ:SOFI) provides a comprehensive spectrum of financial services and products, ranging from student loans to estate planning. The goal is to enable clients to build their entire financial lives around SoFi. The company hopes to develop tremendous cross-selling advantages by serving as a one-stop shop for its clients’ finances, lowering its acquisition costs.
It is expected to benefit from prospective rate cuts, with CEO Anthony Noto forecasting a 75-basis-point reduction by year-end, which will boost profitability. The company posted outstanding Q2 2024 earnings, with GAAP net revenue of $598.6 million, up 20% YoY despite high interest rates.
Manyi Lu gives SoFi Technologies a Buy rating, highlighting its strategic move from student loans to a full-service financial platform aimed at tech-savvy millennials and competing with established banks. Its low costs and digital-first strategy increase its popularity, while recent revenue increases in financial services and good risk management support its long-term success. Lu’s target price includes considerable expected EBITDA growth, which supports the company’s bullish outlook.
Jim Cramer is bullish on SoFi Technologies Inc (NASDAQ:SOFI) and stated the following:
“Now the rates are coming down you are gonna see actually it’s more of a technology stock but it’s gonna go higher.”
SoFi has quickly launched an incredible number of products and services, and it is still the only firm delivering a digital full-service approach. The company has built a deposit base of over $15 billion in two years. The stock grew over 5% over the past year.
Jim Davidson, Dave Roux And Glenn Hutchins’s Silver Lake Partners is the largest stakeholder in the company from among the funds in Insider Monkey’s database. It owns 231,154,165 shares worth $205.93 million as of Q2.
5. Iovance Biotherapeutics, Inc. (NASDAQ:IOVA)
Number of Hedge Fund Holders: 184
Current Market Capitalization: $2.93 billion
Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) is a clinical-stage biopharmaceutical firm that has developed a revolutionary method of treating cancer by utilizing medicines that are tailored to each patient to recognize and eliminate different types of cancer cells. The company is getting ready for the first autologous T-cell therapy to treat solid tumor cancer to potentially be approved by US regulators and go on sale. Being the pioneer in the development, delivery, and innovation of tumor-infiltrating lymphocyte, or TIL, therapies for patients with solid tumor malignancies is its main goal.
Reiterating his buy recommendation for IOVA, Joseph Pantginis points to the company’s solid Q2 2024 profits, which were driven by sales of AMTAGVI and Proleukin, as well as its strong cash position, which ensures sustainability through 2026. The company’s growing clinical pipeline, especially in melanoma, NSCLC, and endometrial cancer treatments, gives him optimism, especially in light of the FDA’s encouraging comments. According to Pantginis, these elements are setting up Iovance for future expansion.
Reni Benjamin also keeps Iovance Biotherapeutics at Buy. They base this on the company’s solid financial results, positive Amtagvi early launch data, and sizable market potential, particularly in melanoma, where there is a peak sales opportunity of over $1.5 billion. They see strategic capital raising and the company’s strong cash position as further factors strengthening Iovance’s growth possibilities.
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.”
Joseph Edelman’s Perceptive Advisors is the largest stakeholder in the company from among the funds in Insider Monkey’s database. It owns 25,933,142 shares worth $207.98 million as of Q2.
4. BGC Group, Inc. (NASDAQ:BGC)
Number of Hedge Fund Holders: 33
Current Market Capitalization: $4.64 billion
BGC Group, Inc. (NASDAQ:BGC) is a brokerage and financial technology provider to the commodities, energy, and worldwide financial markets. Brokerage for a variety of financial assets, such as fixed income, stocks, commodities, derivatives, and real estate, as well as software for trading platforms, clearing, transaction execution, and other back-office activities, are among its service and product offerings. Banks, financial institutions, and corporate entities make up the majority of its clientele. The brokerage services division of BGC is the only reportable section of the company. Geographically, the company’s revenue is derived from Asia, France, Other Europe/MEA, and Other Americas; the United Kingdom and the United States account for the majority of the company’s revenue.
A new exchange for trading U.S. Treasury futures and Secured Overnight Financing Rate (SOFR) futures, the FMX Futures Exchange, was successfully launched, according to a statement released by BGC Group (NASDAQ:BGC) on September 24. The FMX Futures Exchange’s innovative trading platform, which allows for quick trade execution, is intended to give customers a more effective and affordable approach to managing their interest rate risk.
After the quarterly results, Patrick Moley, an analyst at Piper Sandler, increased the firm’s price target for BGC Group from $10 to $11.50 and maintained an Overweight rating for the shares. BGC’s stock grew by over 37% year to date. The company is anticipated to benefit from the opening of the FMX Futures Exchange, as new income streams from trading fees, clearing fees, and other services would be created. Additionally, the exchange is anticipated to grow the company’s market share in the derivatives market and draw in new customers.
O’keefe Stevens Advisory stated the following regarding BGC Group, Inc. (NASDAQ:BGC) in its first quarter 2024 investor letter:
“During the quarter, BGC Group, Inc. (NASDAQ:BGC) announced several milestones and key elements of our thesis. First, the company provided its Q4 business update, stating it expects to be around the high end of its previous guidance range. Fenics (fully electronic business) revenues increased 20% y/y, led by Rates and Credit trading, which saw revenues rise 25% and 42.6% y/y, respectively. The market underestimates these segments’ normalized revenue and earnings power after a decade-long 0% interest rate environment. We believe these lines are just getting started in what is the normalization between treasury issuance and trading volumes.
In January, after many delays, BGC announced FMX Futures Exchange received CFTC approval and would soft launch in the summer. The exchange will compete directly with the CME, attacking their monopoly business. We detailed the key thesis on why we believe FMX can take a significant share from CME on X(Twitter), which can be found here.
The most impactful announcement was BGC’s inclusion in the S&P 600 Small Cap index, leading to the purchase of 46 million shares by price-agnostic buyers. A core tenet of the C-Corp conversion was the index inclusion opportunity. Management continues to execute its strategy with a healthy business environment and the imminent FMX launch. Despite the stock rising 11.5% in Q1 and nearly 50% over the past year, it remains undervalued. Normalized earnings power will show as Fenics becomes a more significant portion of revenue, with higher margins, lower capital intensity, and an improving business environment. We continue to hold the position and believe fair value is north of $10/share.”
3. Marqeta, Inc. (NASDAQ:MQ)
Number of Hedge Fund Holders: 35
Founded in 2010 and with its headquarters located in Oakland, California, Marqeta, Inc. (NASDAQ:MQ) offers its clients a card-issuing platform that includes all the infrastructure and tools required to enable tokenized, digital, and physical payment solutions without relying on a traditional bank. Without having to develop the underlying technology, the company’s open APIs enable partners like DoorDash, Klarna, and Block to quickly develop and implement cutting-edge card-based products and payment services. The company’s main sources of revenue are the ATM and processing fees for cards that are issued through its platform.
Although the company’s volume and revenue have increased quickly lately and improved margins, the company is still loss-making. Since Marqeta’s operating costs are primarily fixed, processing more debit and credit cards that are issued on its network inevitably results in larger margins for the company, which paves the way for profitability as volume increases. Without any prior payment experience, the Marqeta card-issuing platform offers its clients the application programming interfaces (APIs) and infrastructure required to quickly develop and implement cutting-edge card payment systems. Block and other buy-now-pay-later companies are among the fintech and technology companies that have benefited from Marqeta’s platform’s special features and flexibility. As digital card issuance and tokenization are two of its strengths, Marqeta continues to gain from the strong organic growth its client base offers and the shift to digital payments.
A change in Cash App’s reporting resulted in a 45.8% year-over-year decline in Q2 2024 in revenue for the company, with 2024 being the final quarter affected. Except for Cash App, robust financial services transactions and the growth of risk solutions, however, point to the possibility of further growth.
Moreover, its agreement with Block has been extended until 2028, giving the company time to address customer concentration issues before the next contract renewal.
Marqeta, Inc. (NASDAQ:MQ) has a Buy recommendation from Andrew Bauch due to its leadership in modern card issuing, variety of growth prospects, and growing alliances with companies such as Visa and Varo Bank. In addition to underlining the stock’s undervaluation and holding a $7 price objective, he anticipates sustained revenue growth, TPV expansion, and increased profitability.
Jim Simons’s Renaissance Technologies is the largest stakeholder in the company from among the funds in Insider Monkey’s database. It owns 9,628,988 shares worth $52.77 million as of Q2.
2. Alight, Inc. (NYSE:ALIT)
Number of Hedge Fund Holders: 42
Alight, Inc. (NYSE:ALIT) provides integrated, cloud-based human capital solutions that enable clients and workers to manage their health, financial, and HR needs. Geographically, the US is where the company makes the most of its revenue.
Alight’s financial profile has improved as a result of the sale of its professional services and payroll operations. Gross margins have increased by 350 basis points to over 40%, and adjusted EBITDA margins have increased from 21.7% to 25%. Additionally, the firm finished its two-year cloud migration initiative, which is anticipated to save $75 million in run-rate costs annually and increase margins.
Due to the completion of its cloud conversion and a 350 basis point increase in margin from its divestment, ALT announced impressive financial achievements for the second quarter of 2024. Due to a $740 million debt reduction and a $155 million share repurchase announcement, net leverage dropped to 2.8x. ARR (annual recurring revenue) bookings increased by 9% year over year, and sales were $550 million with adjusted EBITDA of $128 million.
Alight, Inc. (NYSE:ALIT), whose long-term contracts account for more than 90% of total revenue, projects steady revenue growth of 4% to 6% each year. It is one of the best growth stocks under $10 to take into consideration because of the company’s excellent revenue model, strong margins, and cost efficiencies.
For Alight, Inc., Kyle Peterson, an analyst, continues to retain a Buy rating because of the company’s return to core competencies, cost-cutting measures, and improved financial condition after the divestiture. According to them, the company is fairly valued and offers GARP investors a good risk-reward profile.
Jeffrey Smith’s Starboard Value LP is the largest stakeholder in the company from among the funds in Insider Monkey’s database. It owns 43,395,000 shares worth $320.26 million as of Q2.
1. Southwestern Energy Company (NYSE:SWN)
Number of Hedge Fund Holders: 49
The main office of Southwestern Energy Company (NYSE:SWN), a producer and exploratory natural gas firm, is located in Spring, Texas. The development of unconventional natural gas reservoirs in the Appalachian Basin and Haynesville Shale is the main focus of the company’s operations.
The company reported operational revenues of $1.08 billion for the second quarter of 2024, with an EPS of $0.10 that marginally exceeded analysts’ projections. The gas company beat earnings estimates for the third time in the previous four quarters. Analysts speculate that the stronger-than-expected earnings were probably caused by a higher realization of oil and gas prices.
Southwestern Energy Company’s (NYSE:SWN) production statistics were equally impressive in Q2 2024, with a total net production of 379 Bcfe, or 4.2 Bcfe per day. This includes the daily output of 101 MBbl of liquids and 3.6 Bcf of gas. In addition, the company invested $430 million in capital projects, which included drilling 30 wells, finishing 23 wells, and listing 22 wells for sale.
At the conclusion of the second quarter 2024, Southwestern Energy Company (NYSE:SWN) had $4.2 billion in total debt, with a net debt to adjusted EBITDA (non-GAAP) ratio of 2.1x, suggesting a manageable leverage profile.
Following the successful completion of its merger with Southwestern Energy Company on October 2, 2024, Chesapeake Energy Corporation formed Expand Energy Corporation, which is currently the largest independent natural gas producer in the country. Southwestern’s prior financial obligations, such as the cancellation of its credit agreement and the delisting of its stock from the NYSE, have been fulfilled with the merger. Under the symbol “EXE,” the recently established Expand Energy will start trading on the NASDAQ. Significant synergies, improved margins, and a wider market reach are anticipated from the transaction, which will lower energy costs and raise shareholder value. While keeping an eye on operational effectiveness and financial stability, the organization is also well-positioned to provide an affordable and sustainable energy future.
Israel Englander’s Millennium Management is the largest stakeholder in the company from among the funds in Insider Monkey’s database. It owns 24,923,413 shares worth $167.73 million as of Q2.
Overall, SWN ranks first among the Renaissance Technologies Portfolio: 10 Best Stocks To Buy. While we acknowledge the potential of pharmaceutical companies, 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 an AI stock that is more promising than SWN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. 13 Best Growth Stocks Under $10 to Buy is originally published on Insider Monkey. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
