You get what you pay for – you’ve heard this adage before. And in most cases, it’s a true statement, especially in the market. Too many times, new investors are led astray by the promise of cheap stocks under $10, only to find out a hard lesson afterward. Nevertheless, the concept continues to be popular because not every idea in the space is terrible.
To better ensure a more focused effort, I’m only considering ideas that have been filtered for either moderate or strong buy consensus ratings. Let me be 100% clear: analyst ratings don’t guarantee anything. In some cases, they can be used as contrarian indicators. However, buy ratings are a good place to start since they focus our search effort to a manageable framework.
Moreover, by gauging expected financial performances with the current market value, we can get a better idea of the relative deal in front of us. Again, that doesn’t guarantee anything. Still, it helps narrow down the list. With that, below are cheap stocks under $10 to keep on your radar.
Immersion (IMMR)
Touch feedback (or haptic) technology specialist Immersion (NASDAQ:IMMR) is a bit of a controversial idea. Go to Google Finance’s profile of IMMR stock and you’ll see that some industry experts have labeled the company a patent troll. I’m not going to comment on that – I’ll let you decide. Setting the contentious issue aside, what makes Immersion special is its relevance to the broader digitalization experience.
Increasingly, whether for entertainment purposes or training for critical functionalities, people are turning to virtual reality and other immersive media. To truly bring the experience alive, Immersion delivers haptic solutions. Presently, the market appears to love the idea, with shares gaining over 34% of equity value. Nevertheless, it could still be quite a deal.
Right now, IMMR stock trades at 4.33X trailing-year sales. Between the first quarter of 2023 to Q1 2024, the average sales multiple soared to 6.79X. Therefore, Immersion may have more to rise.
What’s really compelling is that for fiscal 2024, analysts anticipate sales to expand by 103.8% to $69.14 million. If so, IMMR would easily qualify as one of the cheap stocks under $10.
McEwen Mining (MUX)
Falling under the basic materials sector, McEwen Mining (NYSE:MUX) specializes in precious metals. Per its public profile, the company engages in the exploration, development, production and sale of gold and silver deposits in the U.S., Canada, Mexico and Argentina. It also explores copper. Fundamentally, the rise of inflation may help boost precious commodities due to the devaluation of the dollar.
Further, copper is one of the metals to watch for its use in electric vehicles and other advanced technologies. Despite its relevance, McEwen is rather hit or miss. For example, the company easily pared down expected losses in Q2 and Q3 last year. However, the red ink came in worse than expected in Q4 and Q1.
Still, what’s attractive here is that MUX stock trades for 2.53X trailing-year sales. However, in the past year, the market supported a revenue multiple of 2,87X. So, McEwen may have more room to run.
Enticingly, experts see revenue in fiscal 2024 popping up 33.3% to $302.85 million. Therefore, MUX ranks among the cheap stocks under $10 to consider.
Travelzoo (TZOO)
Operating in the communication services sector, Travelzoo (NASDAQ:TZOO) technically falls under the advertising agency industry. Per its corporate profile, Travelzoo with its subsidiaries operates as an internet media firm, providing travel, entertainment and local experiences worldwide. It publishes deals from over 2,000 businesses, which include restaurants and spas. It’s compelling but also risky.
Let’s get to the bad news first. Since the start of the year, TZOO stock fell more than 20%. In the past five years, it’s down more than 49%. On the positive side, though, the underlying company may benefit from the travel prioritization phenomenon. While not as acute as revenge travel, people post-pandemic are emphasizing their free time for experiential events.
Here’s another fundamental factor that can boost Travelzoo: the U.S. dollar is relatively strong compared to many other currencies. This reality enables American tourists to travel more favorably if you will. And yes, TZOO stock is trading at a relative discount. Price-to-sales currently sits at 1.26X, whereas in the past year, it was 1.41X.
Further, experts project sales expansion of 4.1% and 8.3% in 2024 and 2025, respectively. Thus, it’s one of the tempting cheap stocks under $10.
Amplify (AMPY)
Operating in the hydrocarbon energy sector, Amplify (NYSE:AMPY) is involved in the oil and gas exploration and production business. Otherwise known as upstream, Amplify occupies a key component of the industry’s value chain. In large part, this cynically positive framework is due to the geopolitical landscape. With tensions flaring with top hydrocarbon producers, there’s more pressure on upstream entities to produce.
It’s a cynical idea because if global supply chains come under fire due to various flashpoints, then it’s quite possible that Amplify’s bottom line could benefit. This is a company that generated earnings per share of 18.3 cents in the past four quarters. And while the average earnings surprise during that time came out to 64.55%, the performance itself was lumpy: big misses coupled with bigger hits.
Admittedly, AMPY stock isn’t the most undervalued idea, trading at 0.88X. In the past year, the metric sat at 0.7X. Still, the potential for something big to happen in the global stage could benefit Amplify. For fiscal 2024, experts see a modest 3.3% rise in the top line to $317.79 million. The high-side calls for $325.46 million.
Personally, it may be worth a speculative look as one of the cheap stocks under $10.
Opal Fuels (OPAL)
Based in White Plains, New York, Opal Fuels (NASDAQ:OPAL) conducts business in the utilizes space. Along with its subsidiaries, Opal engages in the production and distribution of renewable natural gas. Specifically, the company aims to serve heavy and medium-duty trucking fleets. It also designs, develops, constructs and operates fueling stations for fleets that use natural gas as a fuel source.
Fundamentally, Opal represents one of the most relevant ideas due to the political and ideological winds that favor alternative energy. Scientifically, climate change is real and we need to do something about it. Opal could offer an important solution. However, it’s a risky idea. Aside from a big Q2 2023 earnings report, the company has fallen short in the next four disclosures.
Still, what could entice speculators is the valuation. OPAL stock trades hands at 0.39X trailing-year sales. However, in the past year, the market priced the equity at 0.77X revenue. Get this – for fiscal 2024, analysts anticipate 30.8% growth to $335 million. Moreover, the high-side estimate calls for revenue of $358.45 million.
If you want to gamble, OPAL ranks among the top cheap stocks under $10.
Lantronix (LTRX)
Operating in the communication equipment space, Lantronix (NASDAQ:LTRX) provides solutiosn for video surveillance, infotainment systems and intelligent substation infrastructure. It serves multiple regions, including the Americas, Europe and the Middle East. It features considerable relevancies for the Internet of Things, providing wired and wireless connections that bring value-add to electronic systems.
It’s an intriguing idea but the market doesn’t appreciate it from my vantage point. Since the start of the year, LTRX stock cratered to the tune of more than 38%. That’s interesting because in the past four quarters, the company’s average EPS came out to 8 cents. Moreover, the average earnings surprise landed at 35.83%.
Still, the market’s loss can be your gain. Right now, LTRX stock trades at 0.91X trailing-year sales. In the past year, the multiple stood at 1.22X. A major positive development could see Lantronix restored to its higher premium, which would be good for current speculators.
Analysts see revenue hitting $160.49 million at the end of the year. That would be up 22.3% from 2023, making LTRX one of the compelling cheap stocks under $10.
Grab (GRAB)
Based in Singapore, Grab (NASDAQ:GRAB) operates in the application software realm. According to its corporate profile, Grab offers a super app portfolio for Internet users in Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Thailand, Vietnam and of course its home market. Primarily, it offers its namesake ecosystem, which is a platform for various e-services such as mobility and digital financial transactions.
Of course, what makes GRAB stock so attractive is the underlying Southeast Asian internet economy: it could legitimately become a $1 trillion ecosystem. So, Grab is attempting to gain a foothold in the arena now. Naturally, such early bird moves carry significant risks. But there are also significant rewards to be had for banking on the foresight.
What adds to the compelling picture is the valuation. Right now, the market prices GRAB stock at 5.51X trailing-year sales. That’s objectively quite high for the industry. However, in the past year, the multiple averaged 6.73X.
Here’s the focal point: analysts anticipate 17.8% expansion of the top line to $2.78 billion in fiscal 2024. This metric could rise to $3.24 billion in fiscal 2025. It’s one of the top cheap stocks under $10 for speculators.
On the date of publication, Josh Enomoto 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.
