Amidst the volatility, the major indices have been marginally higher in 2023. This was expected, with 2022 being the worst year for equities since the financial crisis of 2008. While the index points to some stability and recovery, there are selected themes and stocks that are surging higher. As an example, Marathon Digital’s (NASDAQ:MARA) stock has surged by 156% for year-to-date 2023. There are several similar cheap stocks under $10 that can double your money in one year.
One advantage of stocks under $10 is that a diversified portfolio can be created with limited funds. Further, some of the best stocks under $10 represent companies that have strong fundamentals. Investors can consider exposure to these stocks even with a long-term investment horizon.
Let’s discuss three Cheap stocks under $10 that could double your money in one year. The rally in these stocks is likely to be backed by positive industry tailwinds.
Borr Drilling (BORR)
Borr Drilling (NYSE:BORR) stock has been in an uptrend with a rally of 58% in the last 12 months. The stock remains deeply undervalued at a forward price-earnings ratio of 8.3 times. Given the company’s outlook for 2023, BORR stock is among the best stocks under $10 to double your money.
As an overview, Borr Drilling has a modern fleet of 24 jack-ups with an average age of six years. As of December 2022, the company reported a backlog of $1.7 billion, which was higher by 200% on a year-on-year basis. With strong order intake, Borr expects healthy growth in revenue and EBITDA.
To put things into perspective, Borr reported an adjusted EBITDA of $157.4 million in 2022. The company has guided for an adjusted EBITDA of $380 million (mid-range) for 2023. The company is poised for significant margin expansion and cash flow upside with new orders at a higher day rate. It’s worth noting that Borr is targeting dividend distribution from 2024. This is another potential catalyst for stock upside.
Kinross Gold (KGC)
Kinross Gold (NYSE:KGC) stock has trended higher by almost 25% for year-to-date 2023. The rally has been backed by gold trading above $2,000 an ounce. Even if gold remains sideways, I believe that KGC stock is likely to trade above $10 in the next year.
It’s worth noting that the stock also offers an attractive dividend yield of 2.16%. If the momentum for gold is bullish, healthy dividend growth can be expected.
The first point to note is that Kinross has an investment-grade credit rating. The company ended Q1 2023 with a total liquidity buffer of $1.7 billion. Kinross is therefore positioned to pursue aggressive investment in development projects. At the same time, acquisition-driven growth seems likely, with Kinross being forced to sell Russian assets in 2022.
Another positive is that Kinross has guided stable gold production in the next few years. For Q1 2023, the company reported operating cash flow of $259 million. With an annualized OCF visibility of $1 billion, there is headroom for dividend growth and value creation through share repurchase.
Riot Platforms (RIOT)
Riot Platforms (NASDAQ:RIOT) stock trades just above $10 and can more than double from current levels in the next 12 months. The Bitcoin (BTC-USD) miner remains attractively valued, considering a scenario where the cryptocurrency remains in an uptrend. With Bitcoin halving due in 2024 and with the Fed likely to have a dovish stance in the second half of 2023, the outlook is bullish.
Specific to Riot, there are multiple reasons to be bullish. First, the company reported a cash balance of $188 million for Q1 2023 in addition to $202 million in digital assets. With zero debt, the company’s financial flexibility is high for pursuing aggressive growth.
Further, Riot is a low-cost producer. For Q1, the company’s direct cost to produce one Bitcoin was $9,438. With Bitcoin trending higher, Riot is positioned to deliver robust EBITDA margin and cash flows.
Riot ended Q1 with a hash rate capacity of 10.5EH/s. The company is targeting a capacity of 12.5EH/s by the second half of the year. Given the financial flexibility, further expansion plans are on the cards. Therefore, RIOT stock is the best pick among Bitcoin miners and among the best stocks under $10.
On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
