There are some under-$10 stocks that I feel could emerge as market leaders in the future. These companies all have promising growth prospects, and some analysts agree that their futures look very bright for investors. I selected these stocks by screening their valuations and financials, as well as performing some qualitative assessment on the strength of their management teams and their track record of delivering accretive growth for investors.
But one thing to note about these under-$10 stocks is that they are cheap for a reason. If it was highly likely that these companies would emerge ahead of the pack, we could expect them to be priced appropriately. A discount then is placed on their stock prices to account for the inherent speculation involved, as well as the risks as the counterfactual.
But if you are prepared to ride out the ups and downs for these smaller businesses, I believe that these under-$10 stocks could provide great value to your portfolio. Here are three of them to consider.
Nokia (NOK)
Nokia (NYSE:NOK) is involved in the development and deployment of 5G networks. It was once an iconic producer of mobile phones, and has earned its legendary status because of this fact. It now operates primarily in the telecommunications, IT and industrials sector, having made a substantial pivot.
The company has laid out expectations for a recovery in 2024. It sees promise in AI-focused infrastructure networks and significant expansion in India. Furthermore, Nokia’s market share in key segments is expected to rise, along with stable operating margins.
Specifically, Nokia forecasts a comparable operating profit ranging between €2.3 billion and €2.9 billion, with free cash flow conversion from comparable operating profit estimated to be between 30% and 60%.
Also, not all was bad for NOK last financial year. Its financial health is robust, and this strong financial health has led to an increased dividend proposal of €0.13 per share and the initiation of a new €600 million share buyback program.
B2Gold (BTG)
B2Gold (NYSEARCA:BTG) is an intermediate gold producer operates mines in various countries.
BTG can be considered a penny stock despite its $4 billion valuation, trading at around $2.40 at the time of writing. Some of that discount can be attributed to its short-term outlook. The company forecasted its total gold production to be in the range of 860,000 to 940,000 ounces for 2024, down from 1,061,060 ounces produced in 2023.
However, not all is pessimistic with BTG stock. Analysts rate BTG as a “Buy” and has given the company a 45.32% upside for its share price, to be reached within the next twelve months. Chris LaFemina from Jeffries, for instance, initiated a “Strong buy” rating for the company, and also gave it a $3.50 price target, up from $2.67.
Furthemore, two analysts have given BTG stock an incredible forecast for its EPS, expecting it to skyrocket 2,627.00% to 27 cents this year.
Tellurian (TELL)
Tellurian (NYSEARCA:TELL) is focused on natural gas business, including upstream production, liquefaction, and selling liquefied natural gas (LNG).
One of the biggest things on TELL’s radar is its driftwood project, which expected to generate substantial cash flow, and will significantly influence Tellurian’s valuation. Projections based on adjusted year-to-date cash flow suggesting the entire operations could generate billions in cash flow annually.
TELL is one of the cheapest stocks on this list with a stock price of 81 cents and a market capitalization of just $637.15 million. Although it’s risky, I think that significant value could be unlocked for investors if the Driftwood project comes to fruition, which could position it as a serious player in the natural gas business.
The company’s price-to-sales ratio of 2.5x also means that it’s significantly cheaper on a per-share basis than its peers, and is therefore one of those under-$10 stocks to consider.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More:Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
