10 Best Stocks To Buy Under $10 According To Hedge Funds

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In this article, we will discuss the 10 best stocks to buy under $10 according to hedge funds. If you want to skip our detailed analysis of these stocks, you can go directly to the 5 Best Stocks To Buy Under $10 According To Hedge Funds.

Hedge funds are always considered ahead of the investment game as compared to retail investors because of their resources, experience and access to advanced tools. Some hedge funds are highly diversified, while others are concentrated in certain sectors.

Cheap stocks with strong growth catalysts provide investors with an opportunity to generate attractive returns in a short period of time in an era of rising market valuations. According to Jamie Harmon, Fidelity Low-Priced Stock’s co-manager, it’s still possible to find some fantastic bargains in the market.

“The opportunity with low-priced stocks is that you’re looking where no one else is looking.”

Cheap stocks are obviously not fancy and famous like Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT) or Twitter, Inc. (NYSE:TWTR). Nonetheless, they can be beneficial investments considering the financial impact of Covid-19 on the US economy and the effect on the income levels of the population. As per IMF, the global economy shrunk by 4.4% in 2020 and around 8.9% of the population in the United States became unemployed. This has been considered as one of the factors attracting investors towards cheap stocks. According to Bloomberg, in the first quarter of 2021, Russell 3000 stocks that were priced lower than $2 had risen about 13% on average. While stocks with a price of less than $5 were up about 10%. This was over three times the increase seen in stocks with a stock price of more than $100.

10 Best Stocks To Buy Under $10 According To Hedge Funds

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Our Methodology

Let’s begin our list of the 10 best stocks to buy under $10 according to hedge funds

We picked these cheap stocks by evaluating their popularity among the 873 hedge funds tracked by Insider Monkey as of the second quarter.

Why pay attention to hedge fund holdings? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

Best Stocks To Buy Under $10 According To Hedge Funds

10. Southwestern Energy Company (NYSE:SWN)

Number of Hedge Fund Holders: 27

Southwestern Energy Company (NYSE:SWN) is one of the biggest natural gas liquids producers in the United States. The company secures the tenth position on our list of 10 best stocks to buy under $10 according to hedge funds.

Amongst the hedge funds, Kopernik Global Investors has the largest stake of $92 million in Southwestern Energy Company (NYSE:SWN). Overall, 27 hedge funds hold a combined position of $257.7 million in Southwestern Energy Company (NYSE:SWN), which is equivalent to 5% of the company’s market capitalization.

On October 18, Vincent Lovaglio reiterated a Buy rating on Southwestern Energy Company (NYSE:SWN) but raised the price target by $1 to $8 on the back of the higher natural gas price forecasted during winters. Meanwhile, Neal Dingmann at Truist maintained a Hold rating but increased the target price to $6 due to better demand and supply situation in the market.

9. Kinross Gold Corporation (NYSE:KGC)

Number of Hedge Fund Holders: 28

Kinross Gold Corporation (NYSE:KGC) is one of the top 10 gold mining companies in the world based out of Canada. The company is anticipating a 38% increase in production between 2021 and 2023 to 2.9 million gold equivalent ounces. In the last decade, the company has had a consistent trend of meeting its guidance.

According to Insider Monkey’s database, 28 hedge funds held stakes worth $360.2 million in Kinross Gold Corporation (NYSE:KGC), up from 27 in the preceding quarter, worth $444.9 million.

Since the start of 2021, the stock price of Kinross Gold Corporation (NYSE: KGC) has experienced a decline of over 13% and it provides an attractive entry position based on positive catalysts developing for the company in the next couple of years. Fahad Tariq at Credit Suisse sees ‘re-rating potential’ on the back of the company’s strong free cash flow for 2022. On October 12, the analyst issued an Outperform rating on the stock.

Apart from large-cap stocks like Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Twitter, Inc. (NYSE:TWTR), hedge funds are also investing in Kinross Gold Corporation (NYSE:KGC).

8. Sirius XM Holdings Inc. (NASDAQ:SIRI)

Number of Hedge Fund Holders: 26

Sirius XM Holdings Inc. (NASDAQ:SIRI) is a New York-based satellite and online radio services organization. 26 hedge funds have taken a cumulative position of $577.5 million in the company as of Q2 2021, which is equivalent to 2.4% of the company’s market value.

On October 19, Jeffrey Wlodarczak at Pivotal Research reiterated his Buy rating on the stock. Car sales are expected to bounce back after the chip shortage erodes away, providing Sirius XM Holdings Inc. (NASDAQ:SIRI) an opportunity to gain self-paying customers opting for the Sirius XM radio service.

On October 25, Sirius XM Holdings Inc. (NASDAQ:SIRI) announced its quarterly cash dividend of 2.19 cents per common stock share, reflecting an increase of 50% over the previous quarter’s dividend. Moreover, the company beat the analysts’ revenue estimate by $30.98 million and the EPS estimate by $0.01 for the third quarter of 2021.

Just like Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Twitter, Inc. (NYSE:TWTR), Sirius XM Holdings Inc. (NASDAQ: SIRI) is one of the stocks attracting hedge fund investment.

7. CEMEX, S.A.B. de C.V. (NYSE:CX)

Number of Hedge Fund Holders: 23

CEMEX, S.A.B. de C.V. (NYSE:CX) is a vertically integrated multinational heavy buildings materials company headquartered in Mexico. The company has strong trade relationships with more than 100 countries across the globe and provides aggregates, cement, ready-mix concrete, and urbanization solutions.

According to Insider Monkey’s database, 23 hedge funds hold a combined position of $601.78 million in CEMEX, S.A.B. de C.V. (NYSE:CX). This is equivalent to 5.5% of the company’s market capitalization.

The company has a strong outlook on the back of economies reopening following several lockdowns globally amidst the COVID-19 pandemic. The outlook of the US construction industry is strong as major infrastructure projects are undertaken by the government to boost the economy.

On October 11, Andres Cardona at Citi upgraded Cemex SAB de CV (ADR) (NYSE:CX) from Neutral to Buy with a price target of $9.30, noting that the stock’s 27% pullback provides investors a chance to “become buyers once again.”

6. DiDi Global Inc. (NYSE:DIDI)

Number of Hedge Fund Holders: 46

DiDi Global Inc. (NYSE:DIDI) is a popular ride-hailing company, holding a major chunk of market share of the industry in China.

As of the second quarter of 2021, 46 hedge funds tracked by Insider Monkey reported owning stakes in DiDi Global Inc. (NYSE:DIDI). The total value of the holding is nearly $925 million.

DiDi Global Inc.’s (NYSE:DIDI) revenue increased by 106% YoY to 42.2 billion yuan ($6.6 billion) in the first quarter of 2021. DiDi Global Inc. (NYSE:DIDI) reported having 493 million annual active users at the conclusion of the first quarter.

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Disclose. None. 10 Best Stocks To Buy Under $10 According To Hedge Funds is originally published on Insider Monkey.