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8 Stocks Under $10 and On Sale Right Now in 2020

8 Stocks Under $10 and On Sale Right NowPosted on Thursday, May 7th, 2020 by MarketBeat Staff

During times of market volatility, investors are looking to get return anywhere they can. One approach is to find cheap stocks (i.e. stocks that trade for less than $10). It’s not surprising that many of the cheap stocks can be found on Robinhood. This trading app is popular among millennial investors. And those investors are willing to speculate on cheap stocks.

And it’s easy to see why. Buying 100 shares of a stock that is trading for $5 can seem to be a wise investment if the stock moves higher. After all, if the stock price increases just $1, investors can see a 20% gain.

But that is not always the case. In fact, it’s not usually the case. The trap that some investors fall into is believing that these stocks can be the next Amazon or Apple. And while they do offer a potential reward, they also carry significant risk. It’s important to remember that when a stock is selling for less than $10, there’s usually a reason. And in some cases, it means the stock is under selling pressure.

This is one time when it’s important to remember that inexpensive does not necessarily mean the stock is a good value. However, there are some quality stocks that can be found in the bargain bin. And for many of these stocks, the value is found in a solid dividend that can reward income investors.

#1 - Sirius XM Holdings (NASDAQ:SIRI)

Sirius XM logo

We live in a world of on-demand everything. And while Netflix (NASDAQ:NFLX) is drawing a lot of attention as more Americans are sheltered in place, Sirius XM Holdings (NASDAQ:SIRI) should not be quickly overlooked. In 2019, the satellite radio behemoth added 1.1 million subscribers. That brought its total number of paying subscribers to 30 million. That number doesn’t include an additional 5 million subscribers whose subscriptions are paid by automakers.

There are risks in investing in SIRI stock. The most critical one will be to see if demand for the service will decrease. Unemployment numbers are rising and that has a psychological effect on those that are working as well. It’s possible that the company’s subscriber numbers could tumble. It also bears watching how much growth the company will lose as auto sales will almost certainly lag the overall economic recovery.

The company is also facing the announced retirement of its flagship talent, Howard Stern in December. It’s possible that Stern will reconsider his decision and the company owns exclusive rights to Stern’s library through 2027, but fans of the show may go elsewhere to look for content.

At the time of this writing, Sirius XM Holdings was ranked number 15 in the most bought stocks under $10 on Robinhood.

About Sirius XM
Sirius XM Holdings Inc. provides satellite radio services in the United States. The company broadcasts music, sports, entertainment, comedy, talk, news, traffic, and weather channels, including various music genres ranging from rock, pop and hip-hop, country, dance, jazz, Latin, and classical; live play-by-play sports from principal leagues and colleges; multitude of talk and entertainment channels for various audiences; national, international, and financial news; and limited run channels. It also streams music and non-music channels over the Internet; and offers applications to allow consumers to access its Internet radio service on smartphones, tablets, computers, home devices, and other consumer electronic equipment. In addition, the company distributes satellite radios through the sale and lease of new vehicles; and acquires subscribers through the sale and lease of previously owned vehicles with factory-installed satellite radios, as well as sell satellite radios directly to consumers through its Website, automakers, and retailers. Further, the company provides location-based services through two-way wireless connectivity, including safety, security, convenience, maintenance and data services, remote vehicles diagnostics, and stolen or parked vehicle locator services. Additionally, it offers satellite television services, which offer music channels on the DISH NETWORK satellite television service as a programming package; Travel Link, a suite of data services that include graphical weather, fuel prices, sports schedule and scores, and movie listings; and real-time traffic and weather services. The company was founded in 1990 and is headquartered in New York, New York. Sirius XM Holdings Inc. is a subsidiary of Liberty Media Corporation.

Current Price: $5.82
Consensus Rating: Buy
Ratings Breakdown: 7 Buy Ratings, 4 Hold Ratings, 1 Sell Ratings.
Consensus Price Target: $6.91 (18.7% Upside)



#2 - ADT (NYSE:ADT)

ADT logo

For a company that specializes in home security, shares of ADT (NYSE:ADT) stock have been far from a safe haven for investors. Since the company’s initial public offering (IPO) in 2018, the stock is down over 50%. But the company has a brighter outlook. To begin with, they are expected to report solid year-over-year earnings growth when they issue their quarterly earnings report on May 7.

The company is also strategically pivoting to catch up to the advanced in home security. The company is focusing its efforts on automation, smart home devices and mobile security. Like many businesses right now, the looming recession and current unemployment numbers may cause consumers to hold off on making investments in home security systems or cancel existing services. On the other hand, the new focus on sheltering in place may move security to the forefront of consumer budgets, particularly if they start working from home more. 

A consensus price target of $7.69 suggests the stock may gain over 35% from current levels. In the meantime, investors can enjoy a nice dividend that is currently yielding over 2% and has increased in each of the last six consecutive years.

About ADT
ADT Inc. provides security and automation solutions for homes and businesses in the United States and Canada. It provides a range of fire detection, fire suppression, video surveillance, and access control systems to residential, commercial, and multi-site customers. The company primarily offers monitored security and automation solutions, including the installation and monitoring of security and premises automation systems designed to detect intrusion, control access, sense movement, smoke, fire, carbon monoxide, flooding, temperature, and other environmental conditions and hazards; and address personal emergencies such as injuries, medical emergencies, or incapacitation. It also provides interactive solutions that allow customers to use their smart phones, tablets, and laptops to arm and disarm their security systems, adjust lighting or thermostat levels, view real-time video of their premises, and program customizable schedules for the management of a range of smart home products. In addition, the company offers professional monitoring of third-party devices by enabling other companies to integrate solutions into its monitoring and billing platform. It provides its products under the ADT, ADT Pulse, ADT Always There, Protection 1, and Protectron names. ADT Inc. operates through a network of approximately 240 sales and service offices, 12 underwriter laboratories listed monitoring centers, 7 customer and field support locations, 2 national sales call centers, and 2 regional distribution centers. The company was formerly known as Prime Security Services Parent, Inc. and changed its name to ADT Inc. in September 2017. ADT Inc. was founded in 1874 and is headquartered in Boca Raton, Florida.

Current Price: $7.08
Consensus Rating: Hold
Ratings Breakdown: 3 Buy Ratings, 5 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $7.91 (11.7% Upside)



#3 - Zynga (NASDAQ:ZNGA)

Zynga logo

Another popular Robinhood stock is Zynga (NASDAQ:ZNGA). ZNGA stock holds the number nine position of the app’s most popular stocks with share prices under $10.

For the unfamiliar, the company makes many of the mobile games that have become ubiquitous on smartphones and smart media. Among the games in Zynga’s portfolio are Words with Friends, CSR Racing, and Farmville. Online games accounted for approximately 80% of the company’s 2019 revenue of $1.32 billion. This offset a smaller increase in advertising which grew just 16%.

Obviously the Covid-19 pandemic serves as a potential catalyst as millions of Americans need something to do to pass idle hours. Another potential catalyst for the stock may come from a partnership with Amazon (NASDAQ:AMZN)in which Zynga will bring extra content to Prime subscribers for free.

The company had a record quarter in terms of both revenue growth and quarterly bookings. And even with the economy beginning to re-open, many Americans are still under shelter-in-place orders for the foreseeable future. With that in mind, I would expect that the next quarter’s earnings, which the company reports on May 6, will be equally as impressive.

About Zynga
Zynga Inc. develops, markets, and operates social games as live services in the United States and internationally. The company's games are played on mobile platforms, such as Apple iOS and Google's Android operating systems, as well as on social networking sites, such as Facebook. It also provides advertising services comprising mobile and display ads, engagement ads and offers, and branded virtual items and sponsorships to advertising agencies and brokers; and licenses its own brands. The company was formerly known as Zynga Game Network Inc. and changed its name to Zynga Inc. in November 2010. Zynga Inc. was founded in 2007 and is headquartered in San Francisco, California.

Current Price: $9.15
Consensus Rating: Buy
Ratings Breakdown: 9 Buy Ratings, 3 Hold Ratings, 2 Sell Ratings.
Consensus Price Target: $8.00 (-12.6% Upside)



#4 - Upwork (NASDAQ:UPWK)

Upwork logo

The gig economy has created interest in Upwork (NASDAQ:UPWK) stock.  And according to research from Mastercard (NYSE:MA), gig work is projected to grow at a compound annual growth rate (CAGR) of 17% through 2023.

And that report almost certainly didn’t account for the Covid-19 pandemic. Many freelancers are turning to sites like Upwork to prospect for work. Upwork and other sites like it is a huge job board for freelancers to find gig work. Clients and freelancers can use the site to collaborate. Upwork’s revenue increased by 19% in 2019; this increase was largely driven by its freelancer marketplace.

Some freelancers can find long-term engagements through the site. But the site is geared to “one-off” jobs that small business owners don’t want to tackle or feel it’s worth the investment to have someone else do the job for them.

A potential obstacle may be that as many small businesses are still closed due to the novel coronavirus, they may cut the expenses they pay for work that may be seen as a “luxury” during this time.

Investors looking to invest in the stock need to pay close attention to Upwork’s earnings report. The company continues to run through cash, posting a net loss of $16.7 million in 2019.

About Upwork
Upwork Inc. operates an online marketplace that enables businesses (clients) to find and work with various independent professionals and agencies (freelancers). The company's platform provides access to talent with approximately 5,000 skills across approximately 70 categories, including content marketing, customer service, data science and analytics, graphic design, mobile development, sales, and Web development. Its platform also enables clients to streamline workflows, such as talent sourcing, outreach, and contracting. In addition, the company's platform offers access to various functionalities for remote engagements with freelancers comprising communication and collaboration, time tracking, invoicing, and payment. Further, its marketplace offerings include Upwork Standard, Upwork Enterprise, and Upwork Payroll, as well as managed and Internet escrow agency services. The company has opeations in the United States, India, the Philippines, and internationally. The company was formerly known as Elance-oDesk, Inc. and changed its name to Upwork Inc. in May 2015. Upwork Inc. was incorporated in 2013 and is headquartered in Mountain View, California.

Current Price: $12.44
Consensus Rating: Buy
Ratings Breakdown: 5 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $14.13 (13.5% Upside)



#5 - Amcor (NYSE:AMCR)

Amcor logo

Amcor (NYSE:AMCR) was a small packaging company that recently got a lot bigger. In 2019, the company completed a purchase of Bemis. Packaging remains both a challenge and an opportunity for companies. Sustainability is a major concern as consumer backlash towards plastic continues.

Amcor is making a push to create greater sustainability by expanding into a key area of “increasingly light-weighted, recyclable and reusable” products. These products are being made with an eye towards increasing the amount of recycled content.

The consensus price target for Amcor is $11.70 which is an increase of over 35% from the stock’s current level. The company reports earnings on May 11 and is expected to have earnings per share of 16 cents. That would match what the company reported in its previous quarter.

AMCR stock has a beta below 1 which means that it is less volatile than the broader market. While this may not provide investors with rapid capital growth, they should still consider Amcor for its dividend. The company was recently named to the Dividend Channel’s “S.A.F.E. 25” list. The company sports a dividend yield of 5.41% and most recently paid out a dividend on March 24, 2020.

About Amcor
Amcor plc develops, manufactures, and sells various packaging products for food, beverage, pharmaceutical, medical, home and personal care, and other products worldwide. It provides flexible packaging products, specialty cartons, plastic bottles and jars, and capsules and closures. The company is based in Bristol, the United Kingdom.

Current Price: $10.21
Consensus Rating: Hold
Ratings Breakdown: 3 Buy Ratings, 3 Hold Ratings, 1 Sell Ratings.
Consensus Price Target: $11.70 (14.6% Upside)



#6 - Sandstorm Gold (NYSEAMERICAN:SAND)

Sandstorm Gold logo

It’s hard not to stress how important it is for investors to invest in gold stocks. But the current rally may have investors wondering if they’ve missed the rally on mining stocks. A different way to play the current gold rush is through a company like Sandstorm Gold (NYSE:SAND).

Sandstorm collects royalties from the gold mining companies that they finance. After providing upfront financing, Sandstorm receives a percentage of the gold produced for the lifetime of the mine. Like mining stocks, SAND’s stock price moves up and down with the production of gold. The company recently posted record fiscal year revenue largely due to a record amount of gold sold.

This is a trend that’s expected to continue through 2020 as revenue is expected to climb another 27% and earnings are supposed to climb 44%. And although SAND stock has climbed 18% in the last two weeks, it’s still 30% below its 52-week high. With no expectation of mines closing, investors have a long runway.

About Sandstorm Gold
Sandstorm Gold Ltd. operates as a gold royalty company. It focuses on acquiring gold and other metal purchase agreements and royalties from companies that have advanced stage development projects or operating mines. The company offers upfront payments for companies to acquire a gold stream or royalty and receives the right to purchase a percentage of a mine's production for the life of the mine at a fixed price per unit or at a fixed percentage of the spot price. The company has a portfolio of approximately 187 streams and royalties. It has operations in Canada, Mexico, the United States, Mongolia, Burkina Faso, Ecuador, South Africa, Ghana, Botswana, Cote D'Ivoire, Argentina, Brazil, Chile, Peru, Paraguay, Honduras, French Guiana, Turkey, Sweden, and Australia. The company was formerly known as Sandstorm Resources Ltd. and changed its name to Sandstorm Gold Ltd. in February 2011. Sandstorm Gold Ltd. was incorporated in 2007 and is headquartered in Vancouver, Canada.

Current Price: $8.34
Consensus Rating: Buy
Ratings Breakdown: 3 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $11.00 (31.9% Upside)



#7 - Celsius (NASDAQ:CELH)

Celsius logo

Celsius (NASDAQ:CELH) is one of the smallest of the small-cap stocks. But the company has a nice story to tell investors. The company makes health drinks under the Celsius brand. Sales of its health-conscious products have climbed from $14.6 million to $75 million in the last five years. Not surprisingly, shares of the company have moved from $1 to $4 in that same time.

While the company has a lot of reasons to believe it should continue to see revenue growth. In fact, analyst project revenue will grow by about 50% this year. The 12-month price target of $10 would be an over 100% gain from current prices.

The company does still not provide consistently positive earnings suggesting that the company may have a little ways to go before it becomes consistently profitable. However, one reason why Celsius may not have exploded more than it has is that it competes in a crowded field. In fact some analysts suggest that Celsius may very well be an acquisition target. That would still bode well for the stock

About Celsius
Celsius Holdings, Inc. develops, markets, distributes, and sells functional calorie-burning fitness beverages in the United States and internationally. The company offers its beverages in various flavors, including carbonated orange, wild berry, cola, grape, kiwi-guava, and watermelon; and non-carbonated green tea raspberry/acai, green tea/peach mango, pineapple coconut, watermelon berry, and strawberries and cream, as well as sparkling grapefruit, cucumber lime, and orange pomegranate under the Celsius name. It also provides Celsius Heat, a dietary supplement in carbonated flavors, such as apple jack'd, orangesicle, inferno punch, cherry lime, blueberry pomegranate, strawberry dragonfruit, and tangerine grapefruit. The company distributes its products through direct-store delivery distributors, as well as directly to retailers across various retail segments comprising supermarkets, convenience stores, drug stores, nutritional stores, and mass merchants, as well as health clubs, spas, gyms, the military, and e-commerce Websites. The company was formerly known as Vector Ventures, Inc. and changed its name to Celsius Holdings, Inc. in January 2007. Celsius Holdings, Inc. was founded in 2004 and is based in Boca Raton, Florida.

Current Price: $9.27
Consensus Rating: Buy
Ratings Breakdown: 3 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $9.83 (6.1% Upside)



#8 - SmileDirectClub (NASDAQ:SDC)

SmileDirectClub logo

The promise of SmileDirectClub (NASDAQ:SDC) is easy enough to understand. One of the problems for the stock has been that the procedure can be expensive and was not covered by many health insurance companies. But that narrative is changing. SmileDirectClub recently announced an agreement with Anthem (NYSE:ANTM) who will now provide in-network insurance.

This adds to the previous agreements the company has reached with UnitedHealth Group and Aetna. CEO David Katzman cites the adoption of telehealth as a key reason for the company’s opportunity. Said Katzman, the agreement with the U.S. insurance providers confirms that “consumers expect a solution that allows them to receive care using remote technology that protects their health and safety.”

It’s a big if, but if one of the results of the Covid-19 pandemic is that consumers opt toward SmileDirectClub’s business model which allows patients to get their aligners without having to visit a dentist or orthodontist, then the stock may have plenty of room to run.

About SmileDirectClub
SmileDirectClub, Inc. operates a teledentistry platform that provides member's with a customized clear aligner therapy treatment in the United States and internationally. The company manages the end-to-end process, which include marketing, aligner manufacturing, fulfillment, treatment by a doctor, and monitoring through completion of their treatment proprietary with a network of approximately 240 state licensed orthodontists and general dentists through its teledentistry platform, SmileCheck. It offers aligners, impression kits, whitening gels, and retainers. The company was founded in 2014 and is headquartered in Nashville, Tennessee.

Current Price: $7.81
Consensus Rating: Hold
Ratings Breakdown: 8 Buy Ratings, 2 Hold Ratings, 3 Sell Ratings.
Consensus Price Target: $12.21 (56.3% Upside)

 

One of the problems with investing in inexpensive stocks is the belief that a stock that a high price means a stock is good, and a low price means that a stock is bad. That can be true, but experienced investors understand that a stock’s price and its value are very different things.

A stock that trades at $150 could decline by 25% and investors will herald it as being “on sale”. However, when the same price movement occurs on a stock that is $10 or less, the stock can be seen as untouchable. But stocks move for a variety of reasons. And at times like this, when a black swan event dominates the news, good stocks can get punished simply because investors are trading on the news.

But rather than scare you away from buying low priced stocks, this is just a reminder to do your homework. The companies listed in this presentation have catalysts that may allow the stocks to move up significantly as the economy continues to re-open.

20 Stocks to Sell Now

Most people know that brokerage rankings are overstated because of pressure from publicly-traded companies. No investor relations person wants to see "hold" and "sell" ratings issued for their stock. In reality, a "buy" rating really means "hold." "Hold" ratings really mean "sell" and "sell" ratings mean get out while you still can.

If Wall Street's top analysts are consistently giving "hold" and "sell" ratings to a stock, you know there's a serious problem. We've compiled a list of the companies that Wall Street's top equities research analysts are consistently giving "hold" and "sell" ratings too. If you own one of these stocks, consider getting out while there's still time.

This slide show lists the 20 companies that have the lowest average analyst recommendations from Wall Street's equities research analysts over the last 12 months.

View the "20 Stocks to Sell Now" Here.






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