Last year, around this time, Niu Technologies (NASDAQ:NIU) stock was trading at $7. At the beginning of fiscal year 2021, NIU stock touched a high of $53.38. This is just one example of a stock that has provided multi-fold returns in a matter of one year. The broad markets might seem expensive, but there are dozens of stocks to buy that can significantly out-perform the index.
In this column, I discuss seven stocks from different sectors that are trading below $10 and have the potential to be value creators. However, my primary focus is on sectors that possibly have a multi-year tailwind. Therefore, these stocks are worth holding for the medium to long-term.
Here are seven stocks to buy under $10:
- Cronos Group (NASDAQ:CRON)
- Kinross Gold (NYSE:KGC)
- Costamare (NYSE:CMRE)
- HIVE Blockchain Technologies (OTCMKTS:HVBTF)
- CarLotz (NASDAQ:LOTZ)
- Ayro (NASDAQ:AYRO)
- Nokia Corporation (NYSE:NOK)
Stocks to Buy Under $10: Cronos Group (CRON)
With cannabis stocks springing back to life, CRON stock is an attractive name among stocks to buy. In the last six months, the stock has trended higher by 63% and it seems that the positive momentum will sustain.
For fiscal year 2020, Cronos reported revenue growth of 97% on a year-over-year basis to $46.7 million. However, the company’s operating loss widened to $179 million. In the near-term, I don’t see cash burn as a red flag. If strong revenue growth sustains, CRON stock is positioned for further upside. With the backing of Altria (NYSE:MO), navigating an extended phase of cash burn is not a concern.
Cronos has an extensive brand portfolio that caters to wellness, mass market, adult premium and mainstream adult products. With these brands, the company already has presence in the United States, Canada, Germany, Australia and Israel.
Therefore, the company has regional as well as product diversification. As the global legal cannabis market gains traction, Cronos is well positioned to benefit. It’s worth noting that Cronos is also pursuing pre-clinical research partnership for treatment that includes acne, psoriasis and wound healing. Further advancement in the field of medicinal cannabis can be a game changer for the company.
Overall, Cronos Group is still at an early growth stage and the global cannabis market seems to be nearing an inflection point. The upside for CRON stock might have just begun.
Kinross Gold (KGC)
As inflation accelerates, it makes sense to consider exposure to precious metals. Gold has been sideways to lower in the recent past. But it seems like the precious metal is set for another strong rally. One way to benefit from higher gold prices is exposure to gold mining stocks. At a trailing price-to-earnings (P/E) ratio of 6.6, KGC stock is among the cheaper stocks to consider.
From a financial perspective, there are two important points to note. First, the company has a total liquidity buffer of $2.8 billion, which provides ample flexibility for growth. Further, for FY2020, the company generated over $1 billion in free cash flow. If gold trends higher, the company is well positioned to create shareholder value.
For the current year, the company has guided for gold production of 2.4 million ounces. The company has also guided for an all-in-sustaining-cost of $1,025 an ounce in 2021. Clearly, if gold begins trading in the range of $1,800 to $2,000 an ounce, EBITDA margin is likely to be healthy.
It’s worth noting that for the year, production is guided at the same level as last year. However, gold production is expected to accelerate to 2.7 million ounces next year and further to 2.9 million ounces in FY2023. Therefore, the coming years are likely to be strong in terms of top-line and cash flow growth. At current valuations, KGC stock is therefore among the top stocks to buy.
CMRE stock is a small-cap stock that has an attractive dividend yield of 4%. At a trailing P/E of 5.5, the stock is certain addition to the list of stocks to buy. In the last six months, the stock has surged by nearly 61%. However, P/E valuation indicates that further upside is on the cards.
A reason for the stock being depressed is the fact that the company owns and charters containerships. As global economic activity plunged in FY2020, the stock remained depressed. However, with economic revival, CMRE stock looks well positioned to trend higher. To put things into perspective, charter rates have increased by 170% in the second half of FY2020.
As of February 2021, the company reported contracted revenue of $2.4 billion with a time-charter duration of 4.4 years. This provides clear cash flow visibility. It’s also worth mentioning that the order book for new containerships is at the lowest level in the last decade. This is likely to ensure that charter rates remain firm.
Therefore, with improved global trade and robust charter rates, CMRE stock looks positioned to trend higher. The company also has a strong balance sheet profile with a healthy cash buffer of $209.8 million. This positions the company for possible fleet expansion in the coming years. Given these factors, CMRE stock is among the attractive small-cap stocks to buy.
HIVE Blockchain Technologies (HVBTF)
With cryptocurrencies being hot, it makes sense to include crypto stocks among stocks to buy. HVBTF is an attractive name to consider. The stock has surged by just over 3,000% at its peak in one year, but there seems to be more upside potential with Ethereum (CCC:ETH-USD) surging higher.
As an overview, Hive Blockchain is primarily involved in the mining of Ethereum. For the third quarter of 2021, the company reported income from digital currency mining of $13.7 million. On a year-on-year basis, income growth was 174%. With the company expanding capacity in Iceland, Sweden and Canada, it’s likely that strong top-line growth will sustain.
For Q3 2021, HIVE mined 21,500 Ethereum and 165 Bitcoin. The company’s Bitcoin operations doubled in the quarter. It will not be surprising if HIVE pursues further Bitcoin mining expansion. This will make the company more diversified.
Recently, Hive Technologies also entered into a share swap arrangement with DeFi Technologies. According to Blockchain analysis firm Chainalysis, “DeFi is growing at ‘warp speed’ and DeFi’s explosive growth has much further to grow. Since most DeFi applications are built on top of Ethereum, the world’s second largest cryptocurrency platform.”
Therefore, as decentralized finance continues to grow, the partnership is likely to create value in the coming years. Considering these growth triggers, HVBTF stock looks attractive even after a big rally.
LOTZ stock is a relatively new listing and the stock has been in a downtrend. From a high of $12.90, the stock has trended lower to $7.80. At current levels, the stock is among the cheap stocks to buy.
On March 23, Barrington Research initiated coverage on the company with an “outperform” rating. The research firm has a price target of $22 for LOTZ stock. If this price target is achieved, LOTZ stock has meaningful upside potential in the next few quarters.
As an overview, CarLotz is a used car retail company. For FY2020, the company reported net sales of $118.6 million. With an under-penetrated market, the company expects to growth at a robust pace in the coming years. For the current year, the company has guided for revenue of $356 million. Furthermore, revenue is expected to increase to $945 million in FY2022.
With the closing of the SPAC business combination, CarLotz has a total cash buffer of $315 million. This positions the company for aggressive expansion in the coming years. According to the company, the total addressable market for used vehicles is $841 billion. Therefore, there is ample scope for growth as used car sales gradually shift online.
Ayro is an electric vehicle (EV) company with a differentiated product offering. In the last six months, AYRO stock has surged by 113%. However, the stock still trades at a market capitalization of $208 million.
If the company’s light-duty work trucks and 3-wheeled delivery vehicles gain sales traction, the stock is positioned for multi-fold returns. Therefore, AYRO is still among the cheap stocks to buy.
In terms of business development, the company has partnered with Karma Automotive for production of 20,000 light-duty trucks and electric delivery vehicles over the next three years. The company’s Austin manufacturing facility capacity expansion is also completed with production capacity increasing to 600 EVs per month.
Further, with a cash buffer of $36.5 million, the company seems well positioned to push for sales volumes growth in the next 12-24 months. The company has already partnered with Element Fleet Management, which is among the largest pure-play automotive fleet manager. The partnership will help in large deployment of the company’s electric vehicles that are built for the delivery market.
Considering these business developments, AYRO stock looks attractive among the stocks to buy. I will not be surprised if the stock doubles from current levels in the next few quarters.
Nokia Corporation (NOK)
NOK stock has been volatile in 2021 with the stock catching the attention of the Reddit army. However, it’s worth looking at Nokia beyond the speculation. The stock seems to have strong support around the $3 to $4 range. For long-term investors, the stock still looks promising.
For FY2020, Nokia reported sales of 21.9 billion euros. The company was also free cash flow positive for the third consecutive quarter. Even for the current year, the company has guided for positive free cash flow.
In the networks segment, 5G remains the key growth driver for the company. Recently, Nokia announced a 5-year C-Band deal with AT&T (NYSE:T). The company also partnered with Safaricom to launch the first 5G commercial services in Kenya. As the 5G market gains traction in the coming decade, Nokia is positioned to benefit.
Overall, Nokia seems to be making steady business development and the company has a strong financial profile. If free cash flow continues to accelerate, the company will be positioned to start paying dividends again in FY2023. Considering these factors, NOK stock is indeed among the cheap stocks to buy.
On the date of publication, Faisal Humayun did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.
Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modeling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.