On September 30, Federal Reserve Chair Jerome Powell addressed the National Association for Business Economics (NABE) Annual Meeting in Nashville, TN, and expressed his views on the economy, highlighting both positive and negative trends. On the positive side, he noted that the economy has shown resilience and is still growing at a solid pace, with the labor market remaining strong. He also mentioned that the recent upward revisions to GDP and GDI have removed a downside risk to the economy and that the savings rate has increased, indicating that consumers have more savings on their balance sheets.
However, Powell also pointed out that the labor market has cooled, with the unemployment rate rising to 4.2% and the job finding rate decreasing. He noted that this cooling is not necessarily a bad thing, as it may be a sign of a more sustainable labor market. Additionally, he mentioned that the housing market is still a concern, with housing inflation running at around a 3% annualized pace, which is contributing to overall inflation.
In terms of monetary policy, Powell indicated that the Fed is committed to using its tools to achieve its inflation target of 2%. He noted that the Fed has made progress in reducing inflation but still has work to do. He also stated that the Fed will be monitoring the data closely and will adjust its policy stance as needed to maintain the strength of the economy.
Jamie Dimon: Fed Rate Cut Was Necessary
In an interview with CNBC on 29 September, Jamie Dimon, CEO of JPMorgan Chase, discussed the recent interest rate cut by the Federal Reserve, saying that it was a necessary move to adjust to slowing economic growth and decreasing inflation. He notes that the economy is still strong but that there are underlying concerns about inflation and geopolitics that could impact the market. In terms of geopolitics, Dimon expresses concern about the ongoing war in Ukraine and notes that it is likely to get worse. He believes that the US and its allies need to be prepared for a longer war and that more military help will be needed to support Ukraine. Dimon also touches on the topic of the US presidential election, saying that he is not endorsing any candidate at this time and is instead focusing on policy issues that can help both the world and the US.
With the Fed’s ongoing efforts to balance growth and inflation, the economy appears poised to continue its steady expansion; with that in context, let’s take a look at the 7 best cheap stocks to buy today under $10.
A senior executive looking up at a large boardroom filled with the stocks their company manages.
Our Methodology
To compile our list of the 7 best cheap stocks to buy today under $10, we used the Finviz and Yahoo stock screeners to find the largest companies with stock prices under $10. From that list, we selected companies that are trading at a forward P/E ratio of under 15, as of October 1. We then narrowed our choices to 7 stocks that were the most widely held by hedge funds. The list is sorted in ascending order of their hedge fund sentiment, as of the second quarter, which we sourced from our database.
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).
7 Best Cheap Stocks To Buy Today Under $10
7. B2Gold (NYSE:BTG)
Number of Hedge Fund Investors: 22
Forward P/E Ratio as of October 1: 13.85
B2Gold (NYSE:BTG) is a Canadian-based gold mining company with operations primarily in Africa and the Philippines. The company has a strong portfolio of assets, including the Fekola mine in Mali, the Masbate mine in the Philippines, and the Otjikoto mine in Namibia.
On September 11, B2Gold (NYSE:BTG) reached a new agreement with the Mali government regarding the Fekola Complex. As a result of the agreement, B2Gold (NYSE:BTG) expects to receive expedited approvals for Fekola Regional and Fekola Underground, with initial gold production from Fekola Regional expected to commence in early 2025 and initial gold production from Fekola Underground expected to commence in mid-2025. B2Gold’s (NYSE:BTG) Goose project in Canada, a gold mining project in the Back River Gold District of Nunavut, Canada, is also expected to come online in 2025 and produce over 310,000 ounces of gold annually. The project has total resources exceeding 9.2 million ounces.
B2Gold’s (NYSE:BTG) valuation suggests that the stock is undervalued compared to its peers. The company’s stock is trading at a forward PE of 13.85, a 17.51% discount to its sector median of 16.79. As of the second quarter, the company’s stock is held by 22 hedge funds, with a total stake valued at $132.61 million.
6. ADT (NYSE:ADT)
Number of Hedge Fund Investors: 23
Forward P/E Ratio as of October 1: 10.90
ADT (NYSE:ADT) is a leading provider of security and smart home solutions in the United States. The company offers services such as alarm monitoring, video surveillance, and home automation.
ADT (NYSE:ADT) has been expanding its product portfolio by leveraging advancements in smart technology to enhance its service offerings. The company’s subscription-based model provides recurring revenue, making it attractive to investors looking for stability in the security services industry. ADT (NYSE:ADT) has a strong presence in the market, with over 6.4 million security monitoring service subscribers.
ADT (NYSE:ADT), in collaboration with Google, offers ADT Self Setup, a fully integrated and customizable DIY smart home security system. This innovative offering allows users to access and control their security system from anywhere with cellular service using the ADT+ app and users can easily customize and manage their smart home security system to fit their unique needs, all from the convenience of their mobile device. ADT (NYSE:ADT) is expected to benefit from the fast-growing do-it-yourself (DIY) market, which is driving demand for the company’s security and smart home solutions. The company is also investing in cybersecurity upgrades, which are expected to enhance future net sales growth.
ADT’s (NYSE:ADT) commitment to innovation and customer satisfaction, as well as its strong market position, make it well-positioned for future growth. The company’s stock is trading at a forward PE of 10.90, a 37.31% discount to its sector median of 17.39. Analysts expect the company to increase its earnings by 28.57% this year and have a consensus on the stock’s Buy rating, setting an average share price target at $9.03, which represents a 22.14% upside potential from its current level. As of the second quarter, the company’s stock is held by 23 hedge funds, with a total stake valued at $406.96 million.
5. Itau Unibanco (NYSE:ITUB)
Number of Hedge Fund Investors: 25
Forward P/E Ratio as of October 1: 8.54
Itau Unibanco (NYSE:ITUB) is the largest private-sector bank in Brazil and one of the largest financial institutions in Latin America. The bank offers a wide range of financial services, including retail banking, investment banking, and insurance.
In Q2, Itau Unibanco (NYSE:ITUB) reported a net income of $1.85 billion, up 15.2% year over year, outperforming its peers and solidifying its position as one of the most profitable banks in Brazil. The company’s net income has been growing consistently over the past few years, with a compound annual growth rate (CAGR) of 7.28% over the past five years.
Itau Unibanco’s (NYSE:ITUB) strong financial performance is driven by its high-quality loan portfolio, which has a low non-performing loan (NPL) ratio of 2.7%. The company’s loan portfolio is diversified across different segments, including corporate, retail, and small and medium-sized enterprises (SMEs).
In addition to its strong financial performance, Itau Unibanco (NYSE:ITUB) has a solid market position in Brazil, with a large customer base and a wide range of financial products and services. The company has a strong brand reputation and is widely recognized as one of the most reliable and trustworthy banks in Brazil.
Itau Unibanco (NYSE:ITUB) presents a solid investment opportunity for investors looking for a reliable and profitable bank with a strong market position. The bank’s stock is trading at a forward PE of 8.54, a 28.46% discount to its sector median of 11.94. Analysts expect the company to increase its earnings by 9.27% this year.
4. Clarivate (NYSE:CLVT)
Number of Hedge Fund Investors: 27
Forward P/E Ratio as of October 1: 9.41
Clarivate (NYSE:CLVT) is a leading provider of information and analytics services to the research and intellectual property industries. The company was formed in 2016 through the combination of Thomson Reuters’ Intellectual Property & Science business and the Financial & Risk business of Thomson Reuters. Clarivate (NYSE:CLVT) is headquartered in London, United Kingdom, and has a presence in over 40 countries worldwide.
Clarivate’s (NYSE:CLVT) emphasis on subscription-based services generates consistent revenue streams, making it a key player in the data-driven services sector. In Q2, Clarivate’s (NYSE:CLVT) Academic and Government (A&G) segment reported a significant improvement in organic growth, driven by subscription revenue growth of more than 3% and renewal rates improving to over 96%. In the IP segment, organic growth improved by 270 basis points, from -4.5% in Q1 to -1.8% in Q2, indicating stabilizing trends with regard to trademark search volumes. Organic growth in Clarivate’s (NYSE:CLVT) Life Sciences & Healthcare decelerating from 2.8% to 3.9%. However, analysts believe that this decline is largely due to the weak macro environment, which has put pressure on large pharma companies to be tight on their budgets. The segment will see a strong recovery in FY25 as pharma companies restart their R&D initiatives.
On September 23, Clarivate (NYSE:CLVT) announced a strategic partnership with Relatable Healthcare to deliver a comprehensive Product Relationship Management (PRM) platform for MedTech companies. The partnership combines Clarivate’s (NYSE:CLVT) competitive intelligence with Relatable’s PRM software to provide a single source of truth for product information, enabling medtech manufacturers and distributors to drive revenue growth and workflow efficiency. The Relatable platform will provide customers with access to a wealth of data, including product specifications, cross-references, inventory availability, and sales collateral.
Clarivate (NYSE:CLVT) is trading at a forward PE of 9.41, a 53.88% discount to its sector median of 20.40. Industry analysts have a consensus on the stock’s Buy rating, setting an average share price target at $7.61, which represents an 6.93% upside potential from its current level.
3. BGC Group (NASDAQ:BGC)
Number of Hedge Fund Investors: 33
Forward P/E Ratio as of October 1: 10.10
BGC Group (NASDAQ:BGC) is a global brokerage company that provides fixed-income, foreign exchange, energy, commodities, shipping, and equity services to some of the largest investment banks, trading firms, hedge funds, and governments. The company operates through multiple subsidiaries and has a strong presence in international markets.
On September 24, BGC Group (NASDAQ:BGC) announced the successful launch of the FMX Futures Exchange, a new exchange for trading Secured Overnight Financing Rate (SOFR) futures and U.S. treasury futures. The FMX Futures Exchange is designed to provide clients with a more efficient and cost-effective way to manage their interest rate risk, with a state-of-the-art trading system that enables fast execution of trades.
The exchange has partnered with LCH Limited, a derivatives clearing company headquartered in London, to provide clearing and settlement services. This partnership will enable clients to benefit from LCH’s extended clearing capabilities, including cross-margining of eligible U.S. interest rate futures and interest rate swaps and will result in significant capital savings for clients, as they will be able to reduce the amount of collateral required to trade. Additionally, the exchange’s global connectivity will allow clients to access liquidity from around the world, making it a more attractive platform for trading interest rate futures.
The launch of the FMX Futures Exchange is expected to have a positive impact on BGC Group’s (NASDAQ:BGC) business, with new revenue streams generated through trading fees, clearing fees, and other services. The exchange is also expected to attract new clients and increase the company’s market share in the derivatives market.
BGC Group’s (NASDAQ:BGC) stock is trading at a forward PE of 10.10, a 15.43% discount to its sector median of 11.94. Analysts expect the company to increase its earnings by 11.5% this year and have a consensus on the stock’s Buy rating, setting an average share price target at $11.50, which represents a 9.18% upside potential from its current level. As of the second quarter, BGC Group’s (NASDAQ:BGC) stock is held by 33 hedge funds, with a total stake valued at $425.43 million.
2. Kinross Gold (NYSE:KGC)
Number of Hedge Fund Investors: 37
Forward P/E Ratio as of October 1: 15.41
Kinross Gold (NYSE:KGC) is a Canadian-based gold mining company with operations in the Americas, West Africa, and Russia. The company prioritizes high-quality and low-cost gold development projects. Kinross Gold (NYSE:KGC) has a promising pipeline of gold projects that includes the Great Bear project in Ontario, the Manh Choh project in Alaska, and the Lobo-Marte project in Chile, driving its future growth and expansion.
In Q2, Kinross Gold (NYSE:KGC) reported a 4% decrease in gold production to 535,300 ounces, primarily due to declines at Tasiast, Paracatu, and La Coipa. However, the company’s US operations, including Fort Knox and Round Mountain, showed a production increase. Despite the overall production decline, Kinross Gold’s (NYSE:KGC) revenue rose 10% year-over-year to $1.43 billion, driven by higher gold prices. While all-in-sustaining costs (AISC) increased 7% to $1,387 per ounce, the higher gold price offset the cost increase, resulting in a 40% increase in AISC margins to $955 per ounce.
Kinross Gold’s (NYSE:KGC) focus on low-cost and high-quality gold production has enabled it to generate consistent cash flow. With a realized gold price of $2,342 an ounce, the company’s annual operating cash flow potential is over $2 billion. Furthermore, with gold prices trading above $2,500 an ounce, the company’s annual free cash flow visibility is over $1.5 billion to $2 billion. This robust free cash flow generation will enable Kinross Gold (NYSE:KGC) to invest in growth initiatives and potentially increase its dividend payout.
As of the second quarter, the company’s stock is held by 37 hedge funds, with a total stake valued at $629.88 million.
1. Southwestern Energy (NYSE:SWN)
Number of Hedge Fund Investors: 49
Forward P/E Ratio as of October 1: 12.71
Southwestern Energy (NYSE:SWN) is involved in the exploration, development, and production of natural gas as well as the sale of natural gas and natural gas liquids. The company operates primarily in the Appalachian Basin, where it operates in the Marcellus and Utica Shales. The company has assets are located in Pennsylvania, Ohio, and West Virginia.
Southwestern Energy (NYSE:SWN) is merging with Chesapeake Energy (NASDAQ:CHK), which is expected to close in October. The combined company will have a market capitalization of over $20 billion and will be one of the largest natural gas producers in the United States. Analysts believe that the merger will create significant value for shareholders and will position the company for long-term success.
In Q2, Southwestern Energy (NYSE:SWN) reported a 10.4% decline in production, which was primarily due to the company’s decision to reduce its capital expenditures in response to lower natural gas prices. Despite this decline, the company’s cash flow remained strong, with net cash from operating activities of $291 million. T
Southwestern Energy (NYSE:SWN) is a compelling investment opportunity due to the closing of the merger and the company’s strong cash flow generation. The company’s valuation is attractive as its stock is trading at a forward PE of 12.71. Industry analysts have a consensus on the stock’s Buy rating, setting an average share price target at $5.70, which represents a 22.65% upside potential from its current level.
While we acknowledge the potential of Southwestern Energy (NYSE:SWN) 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 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.
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