In the deep waves of the stock market, finding affordable stocks with significant growth potential can feel like searching for a needle in a haystack.
However, for savvy investors willing to invest in stocks, we have listed the Best Stocks to Buy Under $10 today, which can offer exciting opportunities.
These lower-priced shares often represent companies in emerging industries or those poised for a turnaround. If their growth strategies succeed, these companies could provide substantial returns.
Let’s check them out!
Why Invest in Stocks Under $10?
Before we equip you with the Best Stocks to Buy Under $10, let’s consider why investing in stocks under $10 can be an attractive strategy:
- More Shares For Your Investment: With a limited budget, you can buy more shares of lower-priced stocks, potentially amplifying your gains if the stock price increases.
- Higher Percentage Gain Potential: A $1 increase in a $5 stock represents a 20% gain, while the same $1 increase in a $100 stock is only a 1% gain.
- Opportunity To Invest In Emerging Companies: Many innovative, fast-growing companies start with lower share prices before gaining wider recognition.
- Portfolio Diversification: Lower-priced stocks can spread your investments across more companies and sectors, even with a modest budget, which means you have a diversified investment portfolio.
- Exciting Growth Stories: These stocks often represent companies with compelling narratives and ambitious expansion plans.
- Less Institutional Ownership: Stocks under $10 may have less institutional investor involvement, potentially creating opportunities for individual investors to get in early.
While these potential benefits are enticing, it’s crucial to remember that lower-priced stocks can be more volatile and carry higher risks.
The Top 6 Stocks
Now, let’s equip you with our carefully selected Best Stocks to Buy Under $10 that show promising upside potential.
iQIYI Inc. (IQ)
- Market Cap: $3.24 Billion
- YTD Performance: -12.92% (as of July 2024)
- Business Model: Subscription-based and ad-supported streaming of TV shows, movies, and original content
iQIYI, often dubbed the “Netflix of China,” has over 413 million active users. It is a leading online entertainment service provider in the world’s most populous country. Founded in 2010 and backed by Chinese tech giant Baidu, iQIYI has become dominant in China’s streaming landscape.
Recent Performance: In Q4 2023, iQIYI reported a 1% year-over-year revenue increase. The company’s operating income surged to $84.2 million, with an operating income margin of 8%, up from 2% in the same period in 2022. This improvement in profitability is a positive sign for investors.
Growth Potential: iQIYI’s growth strategy focuses on several key areas:
- Expanding its subscriber base: The company grew its average daily subscribers to 111 million in Q2 2023, up from 98.3 million in the same period of 2022.
- Investing in original content: High-quality exclusive shows and movies help attract and retain subscribers.
- Leveraging AI technology: iQIYI is exploring generative AI to enhance content creation and user experience.
Tencent Music Entertainment Group (TME)
- Market Cap: $25.92 Billion
- YTD Return: 70.03% (as of July 2024)
Business Model: Music streaming subscriptions, digital downloads, and social entertainment services
Tencent Music Entertainment Group is China’s leading online music and audio entertainment platform. The company operates several popular music apps, including QQ Music, Kugou Music, Kuwo Music, and WeSing, a social karaoke app.
Recent Performance: TME’s Q3 2023 results showed a 10.8% year-over-year decrease in total revenues, primarily due to a decline in social entertainment services. However, the company’s music subscription revenue grew by an impressive 42% year-over-year, reaching $438 million. Net profit also increased by 15.6% compared to the previous year.
Growth Potential: Tencent Music’s growth strategy includes:
- Expanding its paid subscriber base: The company reached 100 million paying users in June 2023, a significant milestone
- Focusing on long-form audio content: TME is investing in audiobooks and podcasts to diversify its offerings
- Leveraging AI for personalized recommendations and content creation
PagSeguro Digital Ltd. (PAGS)
- Market Cap: $4.18 billion
- Business Model: Payment processing fees, financial services, and hardware sales
PagSeguro Digital is a Brazilian fintech company providing financial technology solutions to merchants, entrepreneurs, and consumers. The company offers various services, including payment processing, digital banking, and point-of-sale systems.
Recent Performance: PagSeguro has maintained a net profit margin of around 10% over the past four quarters, demonstrating stability in its core business. The company’s strong earnings yield and low price-to-book ratio suggest it may be undervalued compared to peers.
Growth Potential: PagSeguro’s growth opportunities include:
- Expanding Its Merchant Base: As more Brazilian businesses adopt digital payments, PagSeguro can grow its customer base
- Increasing Financial Service Offerings: The company can cross-sell additional products to its customers
- Benefiting From Brazil’s Growing Digital Economy: As e-commerce and digital transactions increase, PagSeguro is well-positioned to capitalize on this trend
Fisker Inc. (FSR)
Market Cap: $52.81 Million
Business Model: Design, development, and sale of electric vehicles
Fisker is an American electric vehicle (EV) startup founded by automotive designer Henrik Fisker. The company is focused on developing and manufacturing environmentally friendly electric cars, with its first model, the Fisker Ocean SUV, recently entering production.
Recent Performance: Until recently, Fisker was a pre-revenue company whose financials reflect the high costs of vehicle development and production ramp-up. However, the company has started delivering vehicles, with 4,789 units in the U.S. and Europe as of September 2023.
Growth Potential: Fisker’s growth strategy includes:
- Ramping Up Production: Fisker aims to deliver 300 vehicles daily in 2024.
- Expanding Globally: Fisker plans to open its first delivery centre in China in 2024.
- Introducing New Models: The company plans additional EV models in different segments.
Clarivate PLC (CLVT)
- Market Cap: $3.78 billion
- Business Model: Subscription-based information and analytics services
Clarivate is a global leader in providing insights and analytics to accelerate the pace of innovation. The company offers subscription-based scientific and academic research services, patent intelligence, and brand protection.
Recent Performance: Clarivate’s Q4 2023 results showed a modest 1.24% year-over-year revenue increase. Under new leadership, the company has been improving its financial position, including paying $500 million in debt.
Growth Potential: Clarivate’s growth opportunities include:
- Expanding Its Product Offerings: The company invests in new analytics tools and datasets.
- Cross-Selling To Existing Customers: Clarivate can leverage its broad customer base to increase revenue per client.
- Strategic Acquisitions: The company has a growth history through acquisitions in complementary areas.
Aegon Ltd. (AEG)
- Market Cap: $10.84 billion
- Business Model: Insurance premiums, investment returns, and fees from asset management
Aegon is a Dutch multinational life insurance, pensions, and asset management company with a history dating back to 1844. It has a significant presence in the United States, the Netherlands, and the United Kingdom.
Recent Performance: Aegon has demonstrated solid execution in recent quarters, making progress towards its 2024 goals for operating capital generation and free cash flow. The company has also been implementing a strategy to focus on its most profitable and strategic assets.
Growth Potential: Aegon’s growth strategy includes:
- Focusing On Core Markets: The company concentrates on markets with strong positions and growth potential.
- Improving Operational Efficiency: Aegon is reducing costs and improving its risk profile.
- Expanding Its Asset Management Business: This segment offers growth opportunities and stable fee income.
Conclusion
Investing in the best stocks to buy under $10 can be an exciting way to boost your portfolio’s returns.
The six companies you have explored – iQIYI, Tencent Music Entertainment, PagSeguro Digital, Fisker, Clarivate, and Aegon – each offer unique opportunities in their respective industries.
However, it’s crucial to start investing in stocks with a smaller budget and with mindful strategies. Lower-priced stocks often come with higher risks, including increased volatility and the potential for significant losses.
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