Stocks needn’t be expensive to provide investors with good returns. You don’t have to shell out more than $3,200.00 for a single share of online retailer Amazon (NASDAQ:AMZN). For the cost of a single Amazon share, you could buy more than 300 shares of a stock that trades for $10 or less. And just because a stock is inexpensive doesn’t mean it isn’t valuable.
On the contrary, value investors look for inexpensive stocks that have growth potential. Experienced investors often see low cost stocks as being on sale or undervalued. The key is to analyze the underlying fundamentals of a stock and evaluate its long-term growth potential.
In this article, we dive into seven stocks to buy right now for under $10.
- TrueCar (NASDAQ:TRUE)
- SmileDirectClub (NASDAQ:SDC)
- Sirius XM Holdings (NASDAQ:SIRI)
- ADT (NYSE:ADT)
- Barnes & Noble Education (NYSE:BNED)
- Harvard Bioscience (NASDAQ:HBIO)
- Casper Sleep (NYSE:CSPR)
Stocks to Buy Right Now Under $10: TrueCar (TRUE)
At just $5.70 a share, TrueCar’s stock looks downright cheap. However, TRUE stock is actually up 86% from a year ago when it was changing hands at $2.98. The rise in the share price has been steady and volatility kept to a minimum. The stock’s 52-week high is $6.47.
Santa Monica-based TrueCar is an automotive pricing website for consumers who are shopping for both new and used cars. The service enables people to see what others paid for new and used vehicles in their local area.
About 41 million used cars are sold in the U.S. each year, and that number is on the rise as consumers shift to pre-owned vehicles coming out of the pandemic now that they commute to work less frequently.
There are now more than 15,000 TrueCar certified dealers across the U.S., each of whom pays TrueCar for access to potential buyers. While still unprofitable, nearly one million cars were bought through its dealer network in 2020.
TrueCar hit a speed bump last fall when it lost a lucrative referral deal it had with the United Services Automobile Association (USAA) that had accounted for 29% of its vehicle sales. But TrueCar formed a new arrangement with the Navy Federal credit union in March of this year, providing it access to Navy Federal’s 10 million-plus members.
The company is constantly making upgrades to its online portal, most recently adding a “Deal Builder” feature that allows people to structure a distinct agreement based on trade-in valuation, accessories, preferred loan terms, credit profile and so on before completing the transaction at an actual dealership.
Straighter teeth without the expense and pain of an orthodontist? That, in a nut shell, is the business model of Nashville, Tennessee-based SmileDirectClub. The company aims to cut out the middle man when it comes to perfectly aligned teeth. The middleman being the dentist. SmileDirectClub mails everything people need to straighten their teeth and eliminates the need for in-person dental appointments. The company manufactures its own aligners and braces and people’s teeth are given a final inspection through teledentistry or a video conference call.
While SmileDirectClub has drawn near universal condemnation from dentists, the company’s products and services are gaining traction. Teens, in particular, seem to like the service.
With people hunkering down at home during the pandemic, fixing teeth became less of a priority and SmileDirectClub’s revenue fell 13% in 2020. However, the company sees brighter days ahead and is forecasting 20% to 30% annualized revenue growth through the next five years. Its revenue rose 77% in 2019 before anyone had heard of Covid-19.
Sirius XM Holdings (SIRI)
Satellite radio provider Sirius XM Holdings is literally a legal monopoly. The company is the only satellite-radio operator. If you want to listen to satellite radio, you’ve got one choice: Sirius XM. That monopoly position, coupled with a strong dividend yield of 1%, is what attracts many investors to SIRI stock, including none other than Warren Buffett. The Oracle of Omaha owns more than 43 million shares of the shares.
Another nice feature of Sirius XM is that, unlike terrestrial and online radio stations that derive almost all of their revenue from advertising, the bulk of Sirius XM’s revenue comes from user subscriptions. In its most recent earnings report, Sirius XM said that $1.61 billion of its $2.06 billion in revenue was derived from subscriptions, while only $354 million of revenue came from advertisements, which can be cyclical and rise and fall with the economy. Subscriptions helped Sirius XM weather the pandemic in a strong financial position.
The company’s first-quarter revenue grew 5% to $2.06 billion and management has forecast that sales will grow 5% to $8.4 billion for all of this year. Sirius XM has also announced that it will buyback $16 billion worth of its own shares this year.
SIRI stock still looks like a bargain at $6.44 a share, up 11% since January and 28% higher than last September.
Personal security is always a priority for most people and that’s good news for Boca Raton, Florida-based ADT, a well-known brand throughout the U.S. and Canada.
The company focuses on protecting homes and businesses through its alarm systems and monitoring centers. Today, ADT is the largest residential and second-largest commercial security monitoring company in North America, serving about seven million customers. The company claims to install more than one million new security systems each year.
ADT got a big vote of confidence last year when Alphabet’s (NASDAQ:GOOGL) Google paid $450 million for a 6.6% stake in the company. The deal enables ADT to provide service to people who own Google Nest home security devices, further expanding its business. ADT said it will work together with Google on Nest products such as cameras and alarm systems, with ADT providing installation and security monitoring services.
ADT stock is currently trading right at $11 a share, and has gained 61% since early March of this year when investment bank Goldman Sachs (NYSE:GS) pinned a “buy” rating on the stock with a $13 a share price target. That is on the high end of Wall Street’s range.
Barnes & Noble Education (BNED)
Barnes & Noble Education operates bookstores on college campuses across the U.S. At last count, the company operates 773 campus bookstores, where it sells primarily educational text books. Barnes & Noble Education is always looking to expand and is getting increasingly involved in the sale of text books used by students from kindergarten through grade 12.
With most college campuses shut during the pandemic and students learning online, Barnes & Noble Education’s business took a hit. For 2020, the company reported a 12-month trailing loss of $128 million.
With campuses reopening this fall, the outlook for Barnes & Noble Education is improving. Analysts forecast the company should return to profitability by 2023, assuming no setbacks in the economic reopening.
Owing to its improved outlook, BNED stock has been a top performer so far in 2021. The share price has risen 95% year-to-date and now trades at around $9 a share. The median price target on the stock is $9.50 per share, with a high estimate of $10 a piece.
Harvard Bioscience (HBIO)
Founded in the basement of Harvard Medical School in 1901, Harvard Bioscience is today one of the largest manufacturers and suppliers of laboratory equipment and instruments used in drug discoveries.
The company has manufacturing facilities in the U.S., as well as overseas in Germany and Spain. The pandemic has actually been good for Harvard Bioscience’s business, with the company reporting a 14% increase in its sales in this year’s first quarter.
Revenue in the first quarter was $27 million, and the company’s losses declined to $200,000, or 2 cents per share. That’s down significantly from a loss of $3.3 million, or $40.12 per share, in the first quarter of 2020.
Going forward, Harvard Bioscience has guided that it expects revenue growth of 10% to 12% for all of 2021. HBIO stock has been another strong performer this year, up 69% since the start of January and up 150% over the past 12 months.
Casper Sleep (CSPR)
In good times and bad, people need a mattress to sleep on. And New York City-based Casper Sleep is a leading player in the mattress and sleep accessory business. The e-commerce company sells mattresses-in-a-box that are shipped to customers through the mail.
Unfortunately, the company, which was founded in 2014, held its initial public offering (IPO) at the worst possible time. CSPR stock made its debut on the New York Stock Exchange in February 2020 at $12 a share. A month later, the share price had cratered to $4.12 as the Covid-19 outbreak sent stock markets spiraling down.
More than a year later, the company and its share price are now on the rebound following a difficult year that saw Casper Sleep shutter its European operations and lay off 21% of its workforce.
CSPR stock rallied 5% in mid-May immediately after the company reported a narrower loss and revenue that beat analysts’ expectations. The company also provided positive forward guidance. Casper Sleep’s net loss narrowed to $0.52 a share from $1.23 a share a year earlier, while revenues hit a record $127.7 million, beating analyst expectations of $125 million.
Casper Sleep said it expects revenue of $146 million to $153 million for full-year 2021. CSPR stock is up 54% year-to-date and now stands at $9.69 a share. The company’s shares have gained 135% since their pandemic-induced bottom of $4.12 in March 2020.
On the date of publication, Joel Baglole 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.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.