Before investors read about compelling under $10 sleeper stocks to buy, you should recognize the validity in the age-old aphorism: You get what you pay for. This statement doesn’t just apply to equities. In many if not most cases, consumers pay dearly for cheap products. Over time, they just might not last as long as their higher-quality counterparts.
Still, on occasion, investors can “cheat” this narrative with particularly enticing under-$10 sleeper stocks. These market ideas might not get the attention that other popular opportunities receive. That’s normal because retail investors can’t be everywhere at the same time. Therefore, astute market participants may enjoy a fundamental “arbitrage” situation by recognizing upside potential in areas most folks aren’t looking.
Nevertheless, this space presents many risks so only hardened contrarians need apply. If that’s you, below are seven under-$10 sleeper stocks to buy.
|CPG||Crescent Point Energy||$5.57|
Crescent Point Energy (CPG)
Although Crescent Point Energy (NYSE:CPG) features a relatively small price tag, it may be one of the best deals among under-$10 sleeper stocks to buy. An oil and natural gas company, Crescent focuses primarily on light oil production in southern Saskatchewan and central Alberta. Right there, we have a geopolitically friendly profile, making CPG very attractive under current circumstances.
As you know, Russia’s invasion of Ukraine set off myriad consequences which reverberated across the globe. Understandably, Western forces imposed sanctions on Moscow. In turn, the Kremlin fired back with its own economic responses. Primarily, Russia seeks to hurt the West through cutting off gas supplies to Europe.
While this framework doesn’t directly impact North America per say, the sudden reduction of global energy supplies manifests itself through higher prices (demand). Cynically, this dynamic bodes well for CPG. Gurufocus.com considers Crescent Point as fairly valued. Of significance, the company enjoys strong profitability metrics.
PHX Minerals (PHX)
Regarding under-$10 sleeper stocks, I’m going to dip into the energy sector again with PHX Minerals (NYSE:PHX). A natural gas and oil mineral company, PHX owns and manages perpetual natural gas and oil mineral interests in resource plays in the U.S. As well, the company also owns interests in leasehold acreage and non-operated working interests in natural gas and oil properties.
Mentioned earlier, the narrative for the hydrocarbon sector presents a cynically compelling profile because of Russia’s invasion of Ukraine. In addition, Moscow shows no sign of wanting to back down from the fight. Recently, the country’s government ordered a partial mobilization, which on paper impacts 300,000 military reservists.
Put another way, the escalation in the Ukraine crisis means that the new normal paradigm of the hydrocarbon sector will become even more exacerbated. Again, that makes PHX one of the cynical under-$10 sleeper stocks to consider.
When it comes to electric vehicles and even the underlying charging network, most folks think about Tesla (NASDAQ:TSLA). While it arguably represents one of the best equities to consider acquiring, TSLA trades hands at time of writing for $278. Since we’re talking about under-$10 sleeper stocks, I must draw your attention somewhere else. One idea, at least from an infrastructural perspective, is EVgo (NASDAQ:EVGO).
Specializing in the development and distribution of EV charging stations, EVgo represents America’s largest public fast-charging network, per its website. “More than 850 convenient and reliable fast charging stations, over 60 metropolitan areas, 2 easy plans, the open road… and you,” states the marketing message in part.
Fundamentally, EVGO represents the future of mobility and transportation. With factors such as the Ukraine crisis and climate change driving the political and ideological framework, EVGO may enjoy upside potential. According to TipRanks, the stock features a moderate buy consensus rating. In addition, it features a $9.25 average price target.
Easily one of the riskiest names among under-$10 sleeper stocks to buy, you don’t want to approach Nokia (NYSE:NOK) lacking sobriety. On a year-to-date basis, NOK slipped over 32%, but that might not be the worst of it. Over the trailing month since the close of the Sept. 23 session, NOK tanked 16%.
That said, this topic is about under-$10 sleeper stocks. Stated differently, investors must give grace to securities traded in this category. If that’s you, Nokia might be interesting. Fundamentally, its management team has argued that the broader 5G transition gives the company a longer cycle. And this framework may enable Nokia to catch up with the competition.
Whatever the case, NOK draws plenty of attention from analysts, surprisingly enough. According to TipRanks, the stock features a moderate buy consensus rating. This breaks down to four buys, two holds and no sells. Finally, NOK features a $6.24 average price target.
If Nokia above didn’t get your pulse racing because of the inherent volatility risks, SmartRent (NYSE:SMRT) might do the trick. On a down day during the Sept. 23 session, SMRT somehow managed to make other suffering stocks look good. It dropped 7.5%, capping off a trailing-week loss of over 13%. Just for good measure, in the trailing month, SMRT plunged 35% and absolutely hemorrhaged 76% on a YTD basis.
Why did SmartRent not turn out to be a smart investment in the year thus far? Fundamentally, the home automation company suffers from a relevance dilemma. While its connectivity platform to efficiently manage and control devices in a home or building catered strongly to the rental market during the worst of the pandemic, that narrative no longer applies. I mean, less people are now frightened about Covid-19, thus making such contactless solutions obsolete.
Still, with housing prices remaining relatively high and rising interest rates freezing out homebuyers, the rental market could remain robust. Therefore, SmartRent could still be a smart idea, though it’s also incredibly risky.
Rocket Lab (RKLB)
If you really have some funds earmarked for speculation burning a hole in your wallet, Rocket Lab (NASDAQ:RKLB) may be one of the under-$10 sleeper stocks to buy. Frankly, RKLB hardly classified as a sleeper anything when it made its debut last year. Of course, 2021 represented the year of the initial public offering. It also represented the year of the special purpose acquisition company, or SPAC.
Following its reverse merger, Rocket Lab initially appeared to be on the cusp of greatness. Unfortunately, this year has brought nothing but pain for RKLB and the space economy. Specifically for RKLB, the security gave up over 66% of market value since its January opener. In addition, the rising interest rate environment – emblematic of an effort to curb the monetary excesses of the new normal pressures risk-on names like Rocket Lab.
However, if you have a long-term perspective, RKLB could be intriguing. Morgan Stanley’s research arm estimates that the “global space industry could generate revenue of more than $1 trillion or more in 2040, up from $350 billion, currently.”
Arlo Technologies (ARLO)
One of the most remarkable aspects of the Covid-19 crisis in the U.S. is that, while myriad flashpoints erupted, over time, our diverse nation finally came together and returned society to (relatively) normal functioning. However, it wasn’t without cost. Unfortunately, longstanding issues such as the wealth gap worsened because of the pandemic.
Moving forward, then, a major concern focuses on personal security. The Public Policy Institute of California noted that after decreases in property (and violent) crimes in 2020, these metrics increased in 2021. While this brings criminality rates to around pre-pandemic levels, it cynically bolsters the argument for Arlo Technologies (NYSE:ARLO). Arlo specializes in wireless surveillance cameras.
While the fundamental demand for Arlo exists in droves, the problem is that investors are dumping anything that features a hint of risk-on exposure. Over the trailing month, ARLO shed 26% of market value. Still, if a recession does materialize, you’d imagine that crimes of desperation will only rise. Thus, ARLO represents one of the under $10 sleeper stocks to buy.
On the date of publication, Josh Enomoto 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.