In this article, we discuss the 10 best stocks under $10 in 2022. If you want to skip our detailed analysis of these stocks, go directly to the 5 Best Stocks Under $10 in 2022.
According to the World Bank’s latest Global Economic Prospects report, the global economy is undergoing a pronounced downturn with emerging threats from COVID-19 variations and a spike in inflation, debt, and income inequality, which might jeopardize the recovery in emerging and developing nations. As pent-up demand fades and fiscal and monetary assistance is removed throughout the world, global GDP is predicted to decline sharply from 5.5% in 2021 to 4.1% in 2022 and 3.2% in 2023.
Keeping in view the economic environment, the most common investment strategy among 106 institutional investors surveyed in December by Bloomberg was value investing, an approach that involves looking for equities that are trading at a discount relative to their intrinsic value. Robert Johnson, a finance professor at Creighton University, shared that according to data from 1927 through 2020, low valued stocks returned 14.3% per annum, while large value stocks returned 11.8 % per annum. In comparison, large growth stocks returned 10% during the same time period, while small growth companies returned 9.3%.
While big-cap companies like Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc (NASDAQ:AAPL), and Alphabet inc. (NASDAQ:GOOG) are often described as consistent performers, investors are always on the lookout for cheaper stocks that offer a greater potential to earn substantial profits. According to Bloomberg, Russell 3000 stocks with a price less than $2 rose nearly 13% on average in the first quarter of 2021. While stocks with a share value of less than $5 were up approximately 10%. This was more than three times the gain recorded in stocks with a market price of above $100.
Let’s begin our list of the 10 best stocks under $10 in 2022. The stocks were analyzed based on the companies’ fundamentals and their popularity among the 867 hedge funds tracked by Insider Monkey as of the third quarter.
10 Best Stocks under $10 in 2022
10. Arcos Dorados Holdings Inc. (NYSE:ARCO)
Number of Hedge Funds: 8
Stock Price as of February 8: $6.86
Arcos Dorados Holdings Inc. (NYSE:ARCO) is the biggest franchisee of McDonald’s Corporation (NYSE:MCD) in the world. The company has the exclusive right to own, operate and give out franchises of McDonald’s quick-service restaurant (QSR) across 20 Latin American and Caribbean nations. Arcos Dorados Holdings Inc. (NYSE:ARCO) has a footprint of over 2,250 restaurants that are either company-operated or by its sub-franchisees. The establishment employs over 100,000 people.
On January 18, Thiago Bortoluci at Goldman Sachs upgraded Arcos Dorados Holdings Inc. (NYSE:ARCO) from a Neutral to a Buy rating and increased the price target from $6 to $7. Arcos Dorados Holdings Inc. (NYSE:ARCO) has also brought financial discipline and efficiency into the business, which has resulted in the company surpassing the analysts’ EPS forecast by $0.04 for Q3 2021. Arcos Dorados Holdings Inc. (NYSE:ARCO) stock price has gained momentum in the last month as it has soared by over 19% in comparison to the S&P 500 Index’s slump of over 4% during the same period.
9. American Finance Trust, Inc. (NASDAQ:AFIN)
Number of Hedge Funds: 9
Stock Price as of February 8: $8.11
American Finance Trust, Inc. (NASDAQ:AFIN) is a publicly listed real estate investment trust (REIT) focused on managing a diverse portfolio of largely service-oriented and distribution-related commercial real estates in the United States. In line with its core operations, the company acquired 69 retail properties for a combined contract purchase price of $179.9 million during the year ended December 31, 2021.
During Q4 2021, American Finance Trust, Inc. (NASDAQ:AFIN) bought 13 properties for a contract purchase price of $28.1 million. The company also revealed that leases at nine properties in its single-tenant portfolio were extended during last year. This would add $7.2 million in net straight-line rent over the new lease terms.
The New York-based company is in the middle of the At The Market (ATM) equity offering program, which allows the company to issue $200 million worth of stock on the market without having to pre-announce the sale of shares. As of Q3 2021, American Finance Trust, Inc. (NASDAQ:AFIN) has used $128.2 of the ATM offering at an average share price of $8.87. On December 21, Barry Oxford at Colliers upgraded American Finance Trust, Inc. (NASDAQ:AFIN) from a Neutral to a Buy rating with a price target of $11.
Investors are not only paying attention to big-cap companies like Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc (NASDAQ:AAPL), and Alphabet inc. (NASDAQ:GOOG), but also spotting opportunities to invest in cheaper stocks like American Finance Trust, Inc. (NASDAQ:AFIN).
8. SFL Corporation Ltd. (NYSE:SFL)
Number of Hedge Funds: 13
Stock Price as of February 8: $8.43
SFL Corporation Ltd. (NYSE:SFL), founded in 2003, has transformed from a pure tanker owning company into one of the largest ship-owning organizations in the world. The Hamilton, Bermuda-based company has investments in the bulker container, tanker, and offshore segments and a huge charter backlog. SFL Corporation Ltd. (NYSE:SFL) has expanded its asset base by acquiring new or second-hand vessels and entering into long-term charter agreements.
SFL Corporation Ltd. (NYSE:SFL) beat the analysts’ EPS estimate of $0.21 by $0.05 for Q3 2021. Moreover, revenue for Q3 exceeded the estimate by $11.42 million. SFL Corporation Ltd. (NYSE:SFL) has been able to build a diversified asset pool that has aided it in navigating through varying economic circumstances. The company has paid out a quarterly dividend every quarter since 2004.
On November 11, Mats Bye at DNB Markets upgraded SFL Corporation Ltd. (NYSE:SFL) stock from a Hold to a Buy rating with a price target of $9. Bye tells investors that he sees the Q3 dividend increase as evidence that the firm has enough “financial muscle” to manage any negative consequences of Seadrill emerging from Chapter 11.
7. BrightSpire Capital Inc. (NYSE:BRSP)
Number of Hedge Funds: 13
Stock Price as of February 8: $9.10
BrighSpire Capital, Inc. (NYSE:BRSP) is one of the largest publicly traded commercial real estate (CRE) credit REITs. The company focuses on acquiring, financing, and managing a diversified portfolio comprising of CRE debt instruments and net leased properties across the US.
Matt Howlett at B. Riley maintained a Buy rating on BrighSpire Capital, Inc. (NYSE:BRSP) stock with a price target of $12.50. The analyst sees BrighSpire Capital, Inc. (NYSE:BRSP) as one of the top picks in the commercial and mortgage REIT for 2022. Howlett thinks that the stock should trade at nearly 1.0x times the adjusted book value with a dividend per share payout of roughly $1.03.
The New York-based diversified REIT company has made substantial efforts in staging a turnaround, with the last major challenge being the ownership stake that is under DigitalBridge Group, Inc. (NYSE:DBRG). The significant ownership is expected to remain as an overhang on the stock price. BrighSpire Capital, Inc. (NYSE:BRSP) has the option to repurchase these shares from DigitalBridge through a tender offer that can comprise both cash and preferred stock.
6. CEMEX, S.A.B. de C.V. (NYSE:CX)
Number of Hedge Funds: 19
Stock Price as of February 8: $5.88
CEMEX, S.A.B. de C.V. (NYSE:CX) is a vertically integrated building materials company that is involved in the manufacturing and distribution of cement, ready-mix concrete, aggregates, and urbanization solutions. The company has a significant presence across the Caribbean, Africa, Asia, Europe, and the Middle East, with a headcount of over 41,000 employees.
On January 28, CEMEX, S.A.B. de C.V. (NYSE:CX) announced the takeover of Broquers Ambiental, a sustainable company working on the separation, recovery, and treatment of urban solid waste generated in Queretaro. The acquisition is made in line with the corporation’s vision of achieving carbon neutrality and aiding Queretaro and the rest of Mexico to achieve sustainability and transform towards a cleaner environment. Meanwhile, on December 30, CEMEX, S.A.B. de C.V. (NYSE:CX) announced the disposal of its operations in Costa Rica and El Salvador for $335 million. This disposal is a part of the Operation Resilience strategic plan, aimed towards optimizing the CEMEX, S.A.B. de C.V.’s (NYSE:CX) global portfolio.
On October 11, Andres Cardona at Citi upgraded CEMEX, S.A.B. de C.V. (NYSE:CX) from a Neutral to a Buy rating with a price target of $9.30. The analyst highlights that the 24% pullback from its peak provides an attractive entry position in the stock. Andres expects the infrastructure cycle in the US and North America to recover to its full potential.
While corporations like Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc (NASDAQ:AAPL), and Alphabet inc. (NASDAQ:GOOG) offer safe returns, companies like CEMEX, S.A.B. de C.V. (NYSE:CX) provide an opportunity for beginner investors to make money without investing too much.
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Disclosure: None. 10 Best Stocks under $10 in 2022 is originally published on Insider Monkey