We recently published a list of the 10 Best US Stocks Under $10 to Buy Right Now. In this article, we are going to take a look at where Patterson-UTI Energy Inc. (NASDAQ:PTEN) stands against other US stocks under $10 to buy right now.
On March 12, Stephanie Guild of Robinhood and Marci McGregor of Bank of America Merrill Lynch shared their perspectives on the current state of the market and strategies for navigating uncertainty. Guild explained that retail investors’ approach to buying the dip has shifted in line with changing market dynamics. While clients are still investing, they are focusing on specific names they favor. At the same time, she noted an increased tendency toward diversification, with investors allocating funds to index investments more than ever before. Additionally, many are taking advantage of Robinhood’s 4% cash yield, which reflects a balanced approach to investing during uncertain times.
McGregor emphasized the importance of focusing on long-term trends rather than reacting to short-term headlines, which often create unnecessary noise. She attributed some weak economic data from January to weather-related factors, calling it a temporary head fake. While acknowledging ongoing uncertainty around trade policy, McGregor highlighted key drivers for market recovery. She pointed out that 6 of the 11 S&P 500 sectors posted double-digit year-over-year earnings growth in Q4 and noted that market broadening is underway. Year-to-date, 63% of S&P constituents have outperformed the index compared to less than 30% over the last two years. This broadening trend signals potential strength in the market. Looking ahead, McGregor predicts a gradual easing of financial conditions later this year, potentially supported by a weaker dollar and improving corporate conditions. She suggested that if soft economic data begins to manifest more clearly, it could lead to Fed rate cuts. Factors such as deregulation, a merger cycle, and potential tax cut extensions may also contribute to recovery. Despite uncertainties, McGregor advised clients to buy on weakness and stay diversified. This includes exposure to international markets like Europe while maintaining confidence in the US as a leading market.
Our Methodology
We used the Finviz stock screener to compile a list of the top US stocks that were trading below $10 as of March 24. We then selected the 10 US stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A drilling site in the wilds of nature, highlighting the company’s commitment to exploration.
Patterson-UTI Energy Inc. (NASDAQ:PTEN)
Share Price as of March 24: $8.38
Number of Hedge Fund Holders: 47
Patterson-UTI Energy Inc. (NASDAQ:PTEN) provides drilling and completion services to the oil and natural gas industry. It operates across onshore basins in the US and internationally. It has three segments that offer contract drilling, completion services including hydraulic fracturing & cementing, and drilling products like drill bits & specialized tools.
The company’s Drilling Services delivered steady adjusted gross profit per day in Q4 2024, despite industry-wide slowdowns. The company is integrating its high-quality Apex rigs with services like directional drilling, downhole tools, and CoreTex automation systems. It currently operates 107 rigs in the US, with $426 million secured in future day-rate drilling revenue. For Q1 2025, it projects 106 active rigs, with an adjusted gross profit per operating day of ~$15,250.
The company is transitioning towards more integrated commercial and operating models. It’s focusing on capturing a larger share of the drilling spend and adopting performance-based agreements to enhance margins. Patterson-UTI Energy Inc.’s (NASDAQ:PTEN) advanced Apex rigs, technical teams, and upcoming P10 data center drive cost-effective drilling. The company is capitalizing on the growing natural gas market and anticipates increased drilling activity.
Bernzott Capital Advisors US Small Cap Value Fund stated the following regarding Patterson-UTI Energy, Inc. (NASDAQ:PTEN) in its Q4 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.”
Overall, PTEN ranks 4th on our list of the best US stocks under $10 to buy right now. While we acknowledge the growth potential of PTEN, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PTEN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. This article is originally published at Insider Monkey.
