With the macro outlook for small-cap and mid-cap stocks improving, now is a good time to buy cheap stocks under $10.
In the last few months, amid fears about inflation and subsequent interest rate hikes by the Federal Reserve, most small-cap and mid-cap stocks have tumbled sharply.
But now, there is concrete evidence that the omicron variant of the coronavirus is significantly less harmful than earlier variations of the virus. Specifically, after analyzing the U.K.’s data, Oxford professor John Bell reported that the tally of vaccinated people in ICUs is “very, very low,” while omicron “does appear to be less severe, and many people spend a relatively short time in hospital.”
And as I noted in a previous column, the recent decision by the Centers for Disease Control and Prevention (CDC) to lower the number of suggested quarantine days for those infected indicates that the U.S. government is “starting to prioritize things like the economy over strict pandemic protocols now.”
Given these points, I expect worries about inflation and rapid Fed rate hikes to ease soon, creating a much better environment for small-cap and mid-cap stocks.
So with the macro environment improving for those names, here are seven stocks under $10 to buy:
- Safe-T (NASDAQ:SFET)
- Quantum Computing (NASDAQ:QUBT)
- Ayro (NASDAQ:AYRO)
- Electrameccanica Vehicles (NASDAQ:SOLO)
- ICAD (NASDAQ:ICAD)
- Bionano Genomics (NASDAQ:BNGO)
- Zinc8 Energy (OTCMKTS:ZAIRF)
Cheap Stocks to Buy: Safe-T Group (SFET)
Israel-based Safe-T has developed what appears to be an exceptionally simple, exceptionally comprehensive IT security system called ZoneZero. With this product, enterprises can easily implement many types of authentication technologies, including push, biometric and instant messaging. And it works with any type of users, including remote workers and those logging in via a VPN and the cloud.
Encouragingly, Safe-T’s system is an “identity-based zero-trust solution.” Even better, the start-up, founded in 2013, has an impressive list of customers and partners, including the Israel Defense Forces, Fujitsu (OTC:FJTSY) and Accenture (NYSE:ACN).
Quantum Computing (QUBT)
According to IBM (NYSE:IBM), quantum computers will be much better than the current top supercomputers at solving complex problems. The tech giant says that quantum computers will be able to easily solve issues bedeviling many types of firms and help create fantastic new products. Examples of the latter solutions include much better electric-vehicle batteries and objects that lower carbon emissions.
Quantum Computing provides software that will enable companies to easily utilize quantum computing. So it appears that the company has first-mover advantage in the race to become the Microsoft (NASDAQ:MSFT) of quantum computing.
The company’s Chief Technology Officer, Michael Booth, has a tremendous amount of experience in quantum computing and supercomputing, while its CEO, Robert Liscouski, has a great deal of management experience — and likely many excellent contacts –in both government and the private sector.
Despite all of these competitive advantages, the market capitalization of QUBT stock is just $91 million.
Cheap Stocks to Buy: Ayro (AYRO)
As I’ve explained in past columns, Ayro has two huge advantages. Specifically, it has found a likely lucrative niche in the electric vehicle space that does not appear to have a great deal of competition and it is partnering with Gallery Carts, which has many top-notch customers within that niche.
Ayro has been out in Wall Street’s doghouse in recent months because its operating expenses quadrupled in the third quarter versus the same period a year earlier, causing its losses to also balloon year-over-year.
But on the positive side, unlike many EV start-ups, Ayro is generating meaningful sales, as its top line last quarter came in at over $559,000. What’s more, the company reported that it had received a total of $4.9 million of orders for its new Club Car Current in Q2 and Q3.
Meanwhile, in September, Ayro hired a new CEO, Thomas M. Wittenschlaeger, who has a great deal of managerial experience in the tech and transportation sectors. I believe that Wittenschlaeger will be able to get the company’s expenses under control.
And since Ayro had $77 million of cash and no debt as of the end of Q3, while it lost $12 million last quarter, he has some time to right the ship. Further, with Ayro stock trading with a market capitalization of just $57,5 million, the shares are tremendously undervalued at this point.
Electrameccanica Vehicles (SOLO)
Electrameccanica is another hugely undervalued EV stock. Specifically, its market capitalization is just $144 million, even though, as I’ve pointed out in the past, it had more than 23,000 pre-orders for the Solo and over 41,000 pre-orders for its Tofino sports EV back in 2018. And that was before Electrameccanica started promoting the Solo in earnest and prior to the EV craze really taking off.
Last month I was able to view the huge factory that Electrameccanica is building in Mesa, Arizona in person, and I’m convinced that the automaker has a truly huge number of orders under its belt. It’s very difficult to believe that the company would build a 235,000 square foot factory in the U.S. unless it really does see huge, proven demand for its EVs.
Given the tremendous usefulness of the Solo for both deliveries and telecommuters, it seems very logical that the automaker is benefiting from tremendous demand for the EV.
Cheap Stocks to Buy: iCAD (ICAD)
As I noted in a previous column, iCAD has used AI to create a system for detecting breast cancer. Its product is more accurate than existing breast cancer detection tools while saving radiologists a great deal of time.
Meanwhile, iCAD’s machine, Xoft, which treats cerebral glioblastomas, a brain cancer, was shown to be meaningfully more effective than standard-of-care treatments. The company has said that Xoft could potentially generate much more revenue than its breast cancer detection system.
Encouragingly, the company’s Q3 sales rose 20% versus Q2 and 31% YOY, coming in at $9,4 million. But despite all of iCAD’s positive catalysts, the trailing 12 months price to sales ratio of ICAD stock is just 4.6.
Bionano Genomics (BNGO)
The company, whose DNA mapping product, Saphyr, should generate very strong demand over the long-term, constantly keeps making more progress.
As I pointed out before, Saphyr has repeatedly proved its ability to save many patients’ lives and become truly disruptive.
And in a Dec. 27 note to investors, Oppenheimer analyst Kevin DeGeeter estimated that Bionano sold 156 Saphyrs in 2021, above the company’s guidance of 150. Moreover, the analyst reported that Bionano’s clinical studies were “enrolling well.” Importantly, he added that the sales of devices used in conjunction with Saphyr were rising and should continue to do so this year.
The analyst recommended buying the shares and set a very encouraging $14 price target on them.
Also worth noting is that the company recently unveiled the prototype of a new DNA mapping system that works about four times as quickly as Saphyr.
Cheap Stocks to Buy: Zinc8 Energy (ZAIRF)
The company’s “zinc-air energy storage systems,” or ZESS, store electricity for eight hours or more, the company says.
Moreover, as I stated in a past column, the amount of energy stored by ZESS can be increased without buying additional fuel cells.
Meanwhile, a top cloud provider’s test of Zinc8’s ZESS is scheduled to be completed in March, so ZAIRF stock may soon have a huge, positive catalyst. And both California and the U.S. Congress are looking to implement additional tax credits for renewable energy, which would be good news for energy storage systems.
Also encouragingly, in November, Tom Hodgson, former CEO of Lithium Americas Corp (NYSE:LAC) and the current chairman of Greenbrook Capital Partners, joined Zinc8’s board, suggesting that the company really does have huge potential.
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.
On the date of publication, Larry Ramer held long positions in AYRO stock, SOLO stock, ICAD stock, BNGO stock, and ZAIRF stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Larry Ramer has conducted research and written articles on U.S. stocks for 14 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been GE, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.