If you’ve noticed recently, most stocks that are drawing interest and headlines also sell at three-digit or four-digit prices. That makes it tough for a small investor to get a grub stake in some of the bigger names out there. Some investors are left wondering, are there any stocks under $10 that seem like they have great potential?
Now, granted, if you put $1,000 in a stock priced at $500 a share you only get two shares, but if the stock goes up 20%, you still make 20% on your money. But low-priced stocks give you the ability to control a large stake in a company that is hopefully on its way to a $500 price tag.
And that’s what the companies hope, too. Usually stocks under $10 aren’t trading enough to get picked up by institutional investors and big funds. But once they gain traction, it can be off to the races, as we’ve seen many times in the past year.
Here, I’ve picked seven stocks under $10 to buy for February. These are hot stocks with big prospects moving forward, and each and every one has an “A” rating in Portfolio Grader.
- Ceragon Networks (NASDAQ:CRNT)
- FinVolution Group (NASDAQ:FINV)
- Himax Technologies (NASDAQ:HIMX)
- iBio (NASDAQ:IBIO)
- Kopin Corp (NASDAQ:KOPN)
- Ribbon Communications (NASDAQ:RBBN)
- StoneMor (NASDAQ:STON)
Stocks Under $10: Ceragon Networks (CRNT)
Source: Shutterstock
This Israel-based mobile telecom company may not be on your radar, because it doesn’t operate on the retail end of mobile. It does the heavy lifting between a carrier and its towers or tower-to-tower information that keeps the whole service up and running properly.
[Editor's Note: List of Top 1% of Stocks Leaked to Public]
It has been publicly listed for more than two decades and has operations around the world, especially in developing nations where mobile services leapfrogged wireline services decades ago.
With 5G rolling out in developed nations now, and developing nations later, CRNT will have plenty of business on its hands for year to come.
The stock is up 109% in the past year and has a market capitalization of $380 million, so it has the size to continue its growth.
FinVolution Group (FINV)
Source: PopTika/ShutterStock.com
What’s one thing the Chinese market has that the U.S. market doesn’t? 1.5 billion people. That means there’s more rich people, more middle-class people and more working-class people. And as it builds out platforms for these demographics, there are many opportunities for growth in this young market.
That’s why finding promising stocks under $10 that haven’t been bid to the moon by Western investors is always exciting. FINV is one of them. It connects underserved borrowers with banks that can lend them money. And it’s an all-digital platform.
Given the recent crackdown by Chinese authorities on lenders, the fact that FINV got through unscathed shows its platform is well run.
The stock is up 62% in the past year, has a 3.42% dividend and has a current price-to-earnings (P/E) ratio below 5. Yowza.
Himax Technologies (HIMX)
Source: Shutterstock
One of the big trends of the past decade or so has been the transition from chipmakers that had their own fabrication plants (they built and designed their chips themselves) to fabless chipmakers (companies that designed the chips and had someone else fabricate them).
The trend is heading toward fabless chipmakers that work with a handful of specialized companies that fabricate the chips to the chipmaker’s specifications. HIMX is a fabless chipmaker headquartered in Taiwan, one of the chipmaking capitals of the world.
[Editor's Note: List of Top 1% of Stocks Leaked to Public]
The company is a leader in integrated circuits, which are in every consumer device you can think of. And while the big names have hit the big time, HIMX is still a stock under $10. But it has a $1.7 billion market cap.
And investors are catching on. It’s up 162% in the past year, but 174% in the past three months. Don’t wait on this one.
iBio (IBIO)
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When creating a list of stocks under $10, it’s almost obligatory to feature a biotech or two. It’s the nature of these firms to find a unique niche with a therapy or technology and then find a solution to show proof of concept.
IBIO has two different sides to its business — a CDMO and a biotech business. A CDMO is a contract development and manufacturing organization, which means other drug companies contract with it to get drugs through clinical trials and then manufacture the drug as trials ramp up. This helps drug companies stick to research and development (R&D) work rather than dealing with drug trials.
It also has a unique FastPharming technology that can move a production from gene sequence to protein production in as little as three weeks. It also has a vaccine candidate that can target Covid-19, as well as one for swine flu in pigs.
The stock is up 470% in the past year, but there’s a lot more here than just Covid-19 hype.
Kopin Corp (KOPN)
Source: Gorodenkoff / Shutterstock.com
One sector that most investors overlook when searching for small stocks under $10 is the defense sector. Most people know the big names and assume they or their various divisions make up a lion’s share of the business.
But there are scores of subcontractors that specialize in niches that big firms don’t bother with — until they become bigger. And that’s where KOPN fits in. It’s a tech company that makes micro-displays for augmented reality (AR) and virtual reality (VR) headsets and hand controllers. And this makes it a major niche player in the armed forces for pilots’ helmets and training displays.
The stock is up almost 980% in the past year, which sounds crazy, but it has yet to tap into the bigger corporate markets yet or really expand into the defense sector.
Ribbon Communications (RBBN)
Source: Fit Ztudio / Shutterstock.com
The one thing the pandemic has done is lower the volume on a lot of other trends that are happening in the market. One of the big ones is the transformation to 5G mobile technology that is going hand-in-hand with increasing computing power, including an expanding array of smart devices.
But to keep that all working, you need telecom software solution providers that operated in the wireless and wired sectors to help telecom providers maximize their systems. That’s what RBBN does.
And it’s also why you likely haven’t heard of it. This is a behind-the-scenes player that rarely gets the spotlight but is doing very important work to keep the headline companies in the headlines.
It has a $1 billion market cap, so it’s not a small firm. The stock is up 142% in the past year, and 100% in the past three months. It’s also a solid takeover target for a larger telecom.
[Editor's Note: List of Top 1% of Stocks Leaked to Public]
StoneMor (STON)
Source: Shutterstock
There are two things in life that are sure things: death and taxes. STON isn’t a tax company. It’s one of the leading cemetery and funeral home firms in the Mid-Atlantic, Northeast and Midwest.
Currently it has 315 cemeteries and 82 funeral homes across about 26 states and Puerto Rico. It recently sold its operations in the West to better focus on the markets it already has exposure in. They weren’t a large part of the operation and likely were no longer worth the effort opening a new region.
Given an aging demographic and consolidation in this industry, STON may not be a sexy stock, but it’s in a solid market. The stock is up 146% in the past year, and its recent sales out West mean more money for expansion in its core markets.
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