The year 2022 will go down as one of the worst for the stock market. However, a few hidden gems trading for less than $10 are worth taking a closer look at. While there are risks associated with any stock trading right now, under-$10 stocks offer investors an opportunity to snag high-quality companies at bargain prices.
I know what you might be thinking. Stock picking in today’s economy? The S&P 500 is down almost 18%, as high inflation rates and a worldwide supply chain crisis battered the markets this year. However, ‘every cloud has a silver lining,’ and many risk-averse investors will use this opportunity to make gains.
Baron Rothschild, a British nobleman, brought up to become a tycoon in the 1800s, is said to have made an extremely fruitful investment and remains famous for the quote, “buy when there’s blood in the streets, even if the blood is your own.” That is sound advice, especially in today’s market.
The following three under-$10 stocks offer significant upside potential for patient investors. The time to strike is now!
| Symbol | Company | Price |
| AOUT | American Outdoor Brands | $8.35 |
| CPG | Cresent Point Energy Corp. | $7.81 |
| TEF | Telefonica SA | $3.68 |
American Outdoor Brands (AOUT)
52-Week Range: $7.10 – $24.59
Looking at the market turbulence this year, it’s clear that American Outdoor Brands (NASDAQ:AOUT) has been hit particularly hard. The market downturn has cut the market value of the stock in half. Yikes!
Nevertheless, despite this negative price momentum, investors must focus on the company’s robust operating model and secular tailwinds. Also worth noting is its dominant position in the market. The company sells its products under well-known brands like Adventurer, Harvester, Marksman, and Defender. Through the years, it has established itself as a leader in its industry.
It is one of the few outdoor companies offering a broad range of products across multiple categories. This diversification has helped the company weather the ups and downs of the industry cycle. We saw this with its 2021 results. The outdoor sports-focused company reported record net sales of $276.7 million in 2021, a healthy recovery from the pandemic years of 2019 and 2020.
However, recent quarters have not been as kind. Sales are down, and losses are mounting. This is understandable. After all, despite slowing down considerably from July, inflation still jumped 7.7% through October. During these times, even higher-income consumers are facing a crunch. However, inflation is now more in control versus earlier in the year. That bodes well for a company like AOUT heading into 2023.
In addition, American Outdoor Brands is one of the largest players in the market, with a significant competitive advantage over smaller rivals. As a result, American Outdoor Brands is well-positioned to continue delivering strong returns for shareholders. The momentary hiccup is an excellent time to pick up this one at a discount.
Crescent Point Energy Corp. (CPG)
52-Week Range: $4.06 – $10.96
Earlier this year, oil prices soared above $100 for the first time since 2014. Companies like Crescent Point Energy Corp (NYSE:CPG) are reaping the benefits of the Russia-Ukraine crisis, as oil and gas prices have spiked in recent months. While the bull run in the oil and gas sector is unlikely to last forever, it has created a golden opportunity for investors to make a quick profit.
Crescent Point Energy is a Canadian oil and gas exploration and production company with operations throughout North America. It was founded in 1994 and has since grown to become one of Canada’s largest oil and gas producers.
For those willing to take on a bit of risk, under-$10 stocks offer a great way to earn a high return quickly. But in the case of CPG, you are already getting substantial bang for your buck. The stock is up more than 42% this year as investors pour capital into this one to take advantage of the oil boom.
Across all the major metrics, CPG is doing well. The company reported a 32% increase in sales, a 531% increase in earnings, and a 245% increase in operating income, driven by high oil prices and cost efficiencies. At the same time, CPG returned 50% of its surplus profit, on top of the base dividend, to its shareholders in Q3.
The company has been paring down debt and improving its balance sheet in recent months. In addition, it continues to reward shareholders with healthy returns, sharing the spoils of the energy boom, making it one of the best under-$10 stocks to buy right now.
Telefonica SA (TEF)
52-Week Range: $3.10 – $5.39
Telefónica (NYSE:TEF) is the fifth-largest mobile network operator in the world and the largest in Spain. The company was founded in 1924 as a state-owned monopoly provider of telephone service in Spain. Telefónica has operations in Europe, Latin America, Africa, and Asia. Its principal business activities include fixed-line and mobile telephony, broadband, and pay-TV services. It owns and operates many subsidiaries, including the UK-based O2 and the German-based E-Plus.
Some parts of the industry are changing, but wireless migration and 5G technology promise to be key components of the future. However, Telefónica is not getting a lot of love this year. The stock is down almost 15% this year.
Despite these issues, the company is a solid 5G play. Despite a high inflation environment, the company delivered a solid earnings report earlier this month. Telefonica’s core earnings and net profit beat Wall Street estimates thanks to an 11% increase in revenues. These numbers show things are moving in the right direction despite a tough environment.
In addition, investing in this stock comes with a juicy yield of 8.33%. There are very few telecom stocks that offer this kind of yield. Considering all of these factors, its dominant position in Spain, and its healthy presence in Latin America and Europe, the company is a great pick in this space.
On the publication date, 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.