The tightening of the money supply has led to a tightening of the overall economy. That means that consumers and investors have less cash and capital to work with. In turn, that means that investors might logically look to shares that trade at lower prices. In the case of this article, we are looking at the best stocks under $10.
Investing at a $10 price point inherently requires risk tolerance. Depending on the source, $5 or under is penny stock territory. That implies room for rapid growth, as well. The current bear market isn’t conducive to rapid gains, but an investment in these cheap shares now can appreciate quickly.
That said, let’s consider the bullish cases for these equities:
|CPG||Crescent Point Energy Corp.||$7.34|
|EGY||Vaalco Energy, Inc.||$5.36|
|ARC||ARC Document Solutions, Inc.||$2.62|
|KGC||Kinross Gold Corporation||$3.12|
|NYCB||New York Community Bancorp, Inc.||$9.49|
|ARCO||Arcos Dorados Holdings Inc.||$6.64|
Best Stocks Under $10: Crescent Point Energy (CPG)
Crescent Point Energy (NYSE:CPG) is a Calgary, Alberta-based oil and gas exploration and production firm. The good news for investors is that while it trades for around $7, it carries a target price above $11. On top of that, CPG stock is an overwhelming buy based on the ratings given by the 14 analysts with coverage.
One of the foremost reasons to consider investing in Crescent Point Energy is the recent moves it made to control debt. The company sold off non-productive assets and was able to reach debt targets earlier than previously anticipated.
The $300 million the firm received from those asset dispositions allowed it to increase its dividend by more than 20% while repurchasing more than $150 worth of shares.
While CPG remains risky given its cheap price, the company is making very wise business decisions. That could increase its forward outlook and raise prices over time.
Vaalco Energy (EGY)
Vaalco Energy (NYSE:EGY) stock represents a Houston-based exploration and production firm with operations in the West African nations of Gabon and Equatorial Guinea. That was, until Jul. 14, when the company announced a business partnership with TransGlobe Energy (NASDAQ:TGA).
Moving forward, the combined company will have operations in Egypt and Canada, in addition to the aforementioned West African presence. Vaalco reported that the transaction resulted in a 24.9% premium to shareholders in the stock-for-stock deal it valued at $307 million. Vaalco purchased all of the outstanding TGA shares for .6727 shares of EGY for each TGA share.
As with most deals of this nature, the notion is that more diversified assets will result in a less risky business model that is better able to adapt. In the nearer term, Vaalco Energy should be able to capitalize on higher energy prices.
Best Stocks Under $10: ARC Document Solutions (ARC)
ARC Document Solutions (NYSE:ARC) stock has 100% upside based on its target price. That’s great news. But it must be taken with a grain of salt as ARC shares benefit from a single analyst rating. Nevertheless, if that analyst is correct, then shares are set to rise to $5 from their recent $2.50 level.
The company offers printing services, document management, printed banners for construction sites, and advertising wrap for commercial vehicles, just to name a few of its services.
To some investors, ARC Document Solutions may represent the type of legacy the industry that digital services promise to supplant. However, that type of thinking oversimplifies what the company offers as an investment.
The company had a phenomenal first quarter (Q1) in which sales rose by 12.6% and net income grew by 150%. Tack on the stock’s 7.9% dividend yield and investing suddenly seems pretty attractive.
Kinross Gold (KGC)
Kinross Gold (NYSE:KGC) stock is likely among the more well-known equities on this list. That distinction is due to the increasing attention gold receives when interest rates move quickly and discussion of stores of value come up.
Like ARC stock above, KGC stock possesses 100% upside. In the case of Kinross Gold, much of that potential is due to its Great Bear Project in Ontario. The project represents 91 square kilometers of contiguous claims adjacent to logging roads with connected power lines throughout.
The project is marked by a long vein of gold that has been identified by multiple geological studies. Given its proximity to access roads with power, the project could lead to windfall profits for the company.
The company’s 11 diamond drills have explored 83 kilometers of 200 total kilometers through June. Kinross Gold expects to fully explore all 200 kilometers by the end of 2022. Positive news could lead to quick profits for investors in the $3 stock.
Best Stocks Under $10: Transocean (RIG)
Investors seeking a cheap stock related to high-performance oil drilling with a global footprint should consider Transocean (NYSE:RIG) stock. The company operates 27 ultra-deep water floaters and 10 harsh environment floaters.
The company shifts those ships to various offshore drilling areas depending on constant analysis of demand and other factors.
To understand the firm’s business, consider a recent contract awarded by Equinor Energy (NYSE:EQNR). That contract will run between October 2023 and April 2025 and address nearly one dozen underwater wells. In return, Transocean will be paid $181 million.
Transocean has 37 ships, so scaling up that contract provides a rough understanding of why the firm is expected to see nearly $3 billion in revenues in 2023.
New York Community Bancorp (NYCB)
The reason to invest in New York Community Bancorp (NYSE:NYCB) stock is the notion that it will almost certainly bounce back. When I say bounce back, I’m referring to the idea that it should track any broader market return.
NYCB stock’s 0.94 beta over the past five years suggests it moves in lockstep with the broader market. That pattern has held in 2022 as it has steadily moved downward with the broader market.
The company’s current price-to-earnings ratio of 7.73 is approaching 10-year lows. That strongly suggests that the market has overcorrected. So, the sooner investors recognize that, the better.
NYCB stock is trading at a price that is well below 10-year averages relative to earnings. That indicates a great opportunity as banks are relatively steady in times like these.
Best Stocks Under $10: Arcos Dorados Holdings (ARCO)
Arcos Dorados Holdings (NYSE:ARCO) is a Uruguay-based firm whose name translates to “Golden Arches Holdings.” So, it’s no surprise then that the company operates McDonald’s franchises across all of Latin America.
It’s a great way to invest in the uniformity and standardization that its parent company lends to its operations, but with greater top-line growth potential. While McDonald’s (NYSE:MCD) expects revenues to grow 4% for its holdings in 2023, ARCO stock is underpinned by 6.77% revenue growth expected next year.
ARCO shares include a dividend, unanimous buy ratings, 50% upside, and four straight quarters of guidance beats. There’s a lot to like with ARCO stock.
On the date of publication, Alex Sirois 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.