We will talk about the ten equities that hedge funds think are the best to purchase for under $10 in this post.
Because of their resources, expertise, and access to cutting-edge techniques, hedge funds are consistently seen as being one step ahead of regular investors in the financial game. While some hedge funds are heavily diversified, others are specialized in particular industries.
In an age of increasing market values, cheap stocks with potent growth catalysts provide investors the chance to make excellent returns quickly. Jamie Harmon, the co-manager of Fidelity Low-Priced Stock, believes that there are still some amazing deals to be had.
“The opportunity with low-priced stocks is that you’re looking where no one else is looking.”
Cheap stocks are certainly not as fancy and well-known as Twitter, Inc., Apple Inc., Amazon.com, Inc. (NASDAQ:AMZN), or Microsoft Corporation (NASDAQ:MSFT) (NYSE:TWTR). Nevertheless, given the financial impact of Covid-19 on the US economy and the influence on population income levels, they may be profitable investments. According to the IMF, the global economy contracted by 4.4% in 2021, and 8.9% of Americans lost their jobs. This is said to be one of the things luring investors to inexpensive stocks. Bloomberg reports that in the first quarter of 2022, the average increase in value for Russell 3000 equities with a price below $2 was around 13%. While shares of companies trading for under $5 were up roughly 10%. This growth was more than three times that of stocks with a stock price of $100 or higher.
Best Stocks To Buy Under $10 According To Hedge Funds
10. Southwestern Energy Company (NYSE:SWN)
Number of Hedge Fund Holders: 27
One of the largest US producers of natural gas liquids is Southwestern Energy Company (NYSE:SWN). According to hedge funds, the firm is tenth on our list of the top 10 companies to purchase for under $10.
With a $92 million interest in Southwestern Energy Company, Kopernik Global Investors is the hedge fund with the highest holding among them (NYSE:SWN). Southwestern Energy Company (NYSE:SWN) is the subject of a total stake held by 27 hedge funds worth $257.7 million, or 5% of the stock’s market value.
On October 18, Vincent Lovaglio reaffirmed a Buy rating on Southwestern Energy Company (NYSE:SWN), although he increased the price target by $1 to $8 in light of the anticipated higher winter natural gas prices. The market’s improved demand and supply conditions led Neal Dingmann at Truist to raise the target price from $5 to $6 while maintaining a Hold rating.
9. Kinross Gold Corporation (NYSE:KGC)
Number of Hedge Fund Holders: 28
One of the top 10 gold mining firms in the world, Kinross Gold Corporation (NYSE:KGC), is situated in Canada. Between 2021 and 2023, the business expects output to rise by 38% to 2.9 million gold equivalent ounces. The organization has maintained a steady history of reaching its guidance for the past 10 years.
28 hedge funds owned positions worth $360.2 million in Kinross Gold Corporation (NYSE:KGC), up from 27 in the prior quarter and positions totaling $444.9 million, according to Insider Monkey’s database.
Given the approximately 13% fall in Kinross Gold Corporation’s stock price since the beginning of 2021 and the favorable catalysts that are expected to emerge for the firm over the following several years, this is an appealing entry point. Credit Suisse’s Fahad Tariq believes that the firm has’re-rating potential’ as a result of its excellent free cash flow forecast for 2022. The analyst gave the stock an Outperform rating on October 12.
Hedge funds are investing in Kinross Gold Corporation in addition to large-cap companies like Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Twitter, Inc. (NYSE:TWTR) (NYSE:KGC).
8. Sirius XM Holdings Inc. (NASDAQ:SIRI)
Number of Hedge Fund Holders: 26
Located in New York, Sirius XM Holdings Inc. (NASDAQ:SIRI) provides internet radio and satellite services. As of Q2 2021, 26 hedge funds have accumulated investments in the firm totaling $577.5 million, or 2.4% of its market value.
On October 19, Pivotal Research’s Jeffrey Wlodarczak reaffirmed his Buy recommendation for the company.
After the chip scarcity subsides, auto sales are predicted to increase, giving Sirius XM Holdings Inc. (NASDAQ:SIRI) a chance to attract self-paying consumers who choose the Sirius XM radio service.
On October 25, Sirius XM Holdings Inc. (NASDAQ:SIRI) declared a cash dividend of 2.19 cents per share of common stock, a 50% increase over the dividend paid during the previous quarter. Additionally, the business outperformed analysts’ projections for the third quarter of 2021 by $0.01 for EPS and $30.98 million for sales.
Sirius XM Holdings Inc. (NASDAQ: SIRI) is one of the stocks garnering hedge fund investment, along with Twitter, Inc. (NYSE:TWTR), Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Apple Inc.
7. CEMEX, S.A.B. de C.V. (NYSE:CX)
Number of Hedge Fund Holders: 23
A vertically integrated global heavy building materials firm with its headquarters in Mexico is CEMEX, S.A.B. de C.V. (NYSE:CX). The business offers solutions for urbanization as well as aggregates, cement, and ready-mix concrete in more than 100 nations throughout the world.
23 hedge funds had a collective stake in CEMEX, S.A.B. de C.V. of $601.78 million, according to Insider Monkey (NYSE:CX). This is equivalent to 5.5% of the market capitalisation of the firm.
The COVID-19 pandemic-related lockdowns have caused some economies to reopen, which has given the corporation a positive outlook. Given that the government is investing heavily in infrastructure as a means of stimulating the economy, the forecast for the US construction sector is positive.
On October 11, Citi’s Andres Cardona raised Cemex SAB de CV (ADR) (NYSE:CX) from Neutral to Buy with a $9.30 price objective, adding that the stock’s 27% decline offers investors the opportunity 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.
5. iQIYI, Inc. (NASDAQ:IQ)
Number of Hedge Fund Holders: 27
Similar to Netflix Inc., iQIYI, Inc. (NASDAQ:IQ) is a platform for online content portals (NASDAQ: NFLX). In comparison to Netflix’s global subscription base of 209 million, the firm has 500 million monthly active daily users (MAU).
At the conclusion of the second quarter of 2021, 27 of the 873 top funds monitored by Insider Monkey were long on iQIYI, Inc. (NASDAQ:IQ). This position is estimated to be worth $1.1 billion on the market.
For the second quarter of 2021, iQIYI, Inc. (NASDAQ:IQ) exceeded both the EPS expectation and the revenue estimate by $0.05 and $24.30 million, respectively. Instead of the experts’ predicted $1.23 billion, the firm forecasts its net sales to be between $1.18 billion and $1.25 billion for the third quarter of 2021, showing an increase of 6% to 13% YoY.
The firm shouldn’t be viewed as a Chinese pure-play because it has acquired over 106 million users thanks to exclusive rights to globally renowned Korean content. This is where iQIYI, Inc. (NASDAQ:IQ) comes into play, since the recent success of Squid Games on Netflix further demonstrates the potential of Korean content. In addition, the business unveiled “iBarca Membership” in collaboration with Barcelona Football Club. Iqiyi customers would get access to special Barca TV Mandarin material as well as other advantages.
4. Paysafe Limited (NYSE:PSFE)
Number of Hedge Fund Holders: 50
London-based Paysafe Limited (NYSE:PSFE) is a global supplier of specialist payment solutions. The company employs 3,400 individuals in more than a dozen sites across the world and does $100 billion worth of business annually. After a merger with SPAC sponsored by the Blackstone Group Inc (NYSE: BX) and CVC Capital Partners, the firm went public at the end of 2020. Paysafe was acquired by both of these companies in 2017 for $4 billion.
As of Q2 2021, 50 of the 873 hedge funds that Insider Monkey follows had positions in Paysafe Limited (NYSE:PSFE). Their total holding is valued at $1.12 billion, or 19.1% of the company’s market capitalisation.
Through its specialist products, Paysafe Limited (NYSE:PSFE) has the chance to benefit from the development potential in the US online gaming market. As more states legalize online gambling, the sector is predicted to expand by 50%. Most recently, Connecticut saw the introduction of online sports betting. New York’s plan to legalize sports betting online is currently in its final stages, while nearby New Jersey just made history by being the first state to record $1 billion in sports wagers in a single month. Additionally, the business offers digital wallets that might help it compete in the bitcoin market.
3. eMagin Corporation (NYSE: EMAN)
Number of Hedge Fund Holders: 9
The eMagin Corporation (NYSE: EMAN) develops and markets virtual image solutions, including organic light-emitting diode displays. It was established in 1996 and currently has a market value of about $200 million.
Investment consulting firm HC Wainwright increased the price objective for eMagin Corporation (NYSE: EMAN) shares from $2 to $5 in March and confirmed its Buy recommendation on the stock, stating that the company was well-positioned for growth this year because to strengthening virtual reality prospects.
By the end of the first quarter of 2021, nine hedge funds in Insider Monkey’s database had positions in eMagin Corporation (NYSE: EMAN) worth $5.9 million, up from five at $786,000.
2. Zynga Inc. (NASDAQ:ZNGA)
Number of Hedge Fund Holders: 49
Farmville and Zynga Poker are two well-known social game titles created by Zynga Inc. (NASDAQ:ZNGA), a well-known social game developer worldwide. Since the COVID-19 epidemic began, the videogame business has flourished as more people chose to stay indoors and play video games.
In the second quarter of 2021, 49 hedge funds had positions in Zynga Inc. (NASDAQ:ZNGA) worth $1.27 billion, up from 47 the quarter before.
An analyst at financial consulting firm BTIG named Clark Lampen began covering Zynga Inc. (NASDAQ:ZNGA) on October 26 with a Buy rating and a $10 price target. Zynga’s setup for 2022 “looks solid,” according to Lampen’s analysis of the firm from a sales viewpoint in a research note to investors.
1. Clover Health Investments, Corp. (NASDAQ:CLOV)
Number of Hedge Fund Holders: 23
The Tennessee-based business Clover Health Investments, Corp. (NASDAQ:CLOV) offers older adults Medicare Advantage (MA) insurance products. To give customers a detailed view of the people covered by their plan, the firm makes use of its specialized software, the Clover Assistant. Chamath Palihapitiya, a Canadian venture capitalist of Sri Lankan descent, took the business public in June 2021. Sequoia Capital and Alphabet Inc. (NASDAQ: GOOGL) were additional investors.
The Center for Medicare and Medicaid Services (CMS) of the US Department of Health gave Clover Health Investments Corp. (NASDAQ:CLOV) permission to expand its coverage to 101 more US counties starting in September 2021. Additionally, the CMS raised the PPO plan from Clover Health to 3.5 stars early in October.
At the conclusion of the second quarter of 2021, 23 of the 873 hedge funds that Insider Monkey tracks had holdings in Clover Health Investments, Corp. (NASDAQ:CLOV). The position’s entire worth exceeds $1.4 billion, which is close to 70% of the company’s market capitalization. This illustrates how heavily hedge funds are invested in Clover Health Investments Corp. (NASDAQ:CLOV).