Searching for under $10 stocks could be a great way to profit from potential rate cuts, U.S.-China trade tensions, and the upcoming presidential election.
President Biden’s additional tariffs on $18 billion of Chinese imports, notably electric automobiles, once again heated the trade war between the two nations. On the other side of the aisle, Republican candidate, Donald Trump, has said he will impose a 60% or higher tariff on Chinese products if re-elected to office.
In addition, the geopolitical tensions in the Middle East mean one has to keep an eye on the energy sector, which is key to the future of global and U.S. trade. Because of these challenges, picking under $10 stocks is a good move, as they are light on the wallet and could lead to massive returns in 2024 if the Federal Reserve turns dovish. Thus, investors should keep an eye on the following three stocks for strong potential upside swings.
ARC Document Solutions (ARC)
ARC Document Solutions (NYSE:ARC), offering printing and document management services, is a no-frills performer among under $10 stocks. The company recently reported a 50% YOY increase in earnings-per-share (EPS) for Q1, 2024. This easily outpaced Wall Street estimates by 20%, indicating a strong comeback after the COVID-19 pandemic slowed down its momentum.
For ARC, digital color picture printing from new and returning customers earned $42.7 million. Meanwhile, scanning and digital picture sales reached $5.7 million as more clients shifted to digital. The firm’s capital expenditures and equipment and material sales were also constrained to $3.8 million by high U.S. financing rates.
ARC forecasts high-demand services and artificial intelligence will improve scans and back-office tasks. The number of documents scanned and stored increased by 23% year-over-year in Q1, and this trend is likely to continue. ARC thinks that its focus on new business lines, such as color printing for trade shows, sports stadiums, and events, is paying off, even though sales of on-site print services and tools have dropped by 3%.
Last year, ARC spent $12 million on shareholder returns. In 2024, it plans to give back 75% of its adjusted free cash flows to its owners.
ARC’s forward dividend yield is 7.27%, more than the consumer discretionary industry average of 1.89%. The future payout ratio of this corporation is 65%, implying most earnings are distributed.
Kinross Gold (KGC)
Kinross Gold (NYSE:KGC) started 2024 well financially, earning 10 cents per share, above the average expectation of six cents. Quarterly sales exceeded $987.95 million at $1.08 billion, beating projections by around 9%, helping the stock to a 36% bull run this year; despite this pricing increase, analysts still rate it a strong buy, based on 10 projections.
Kinross produced 527,399 gold equivalent ounces in Q1, 2024, 13% more than the same period last year. The cost of sales was $982 per ounce of gold, and the cost of maintaining the business as a whole was $1,310 per ounce of gold; profits went up by 20%, to $1,088 per ounce of gold sold.
High efficiency and good profits were achieved at Kinross’s three biggest mines: Tasiast, Paracatu, and La Coipa, which together produced 68% of the total. Tasiast and Paracatu made record quarterly output, which was a big part of the company’s strong success.
Meanwhile, the drilling operation for the Great Bear project continues to progress smoothly, and the Manh Choh project is still on track to start producing in early Q3, 2024. Also, the Tasiast solar power plant is now fully operating, which makes Kinross’s processes more environmentally friendly.
Vaalco Energy (EGY)
Vaalco Energy (NYSE:EGY), is currently focused on energy exploration in West and North Africa and western Canada. It earned $7.7 million in Q1 2024, up from $3.4 million in 2023, while its quarterly revenues jumped 25% to $100.2 million from $80.4 million last year.
It produced 16,848 barrels of oil equivalent per day in the first quarter of 2024, 8% less than in 2023. Moreover, Vaalco’s cash-only acquisition of Svenska Petroleum Exploration went successfully. The deal aims to improve output and business development. In the next quarters, the purchase should enhance Vaalco’s production and profitability.
The company is also seeking ways to boost production and manufacturing efficiency in Egypt. Additionally, Vaalco is using its knowledge to improve operations and further develop its presence in the Canadian market.
Lastly, the company’s 3.89% dividend yield places it among the top 30% of dividend yields. EGY’s dividend payout ratio is 28%, which means there is plenty of room to grow the dividend, backed by profits, placing it well among under $10 stocks.
On the date of publication, Faizan Farooque did not have (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.
