As a rule of thumb, you should avoid targeting cheap securities, However, exceptions can always be made, particularly for these tantalizing stocks under $10 to buy. To be sure, the cheap ideas in the capital market attract much attention. However, their underlying fundamentals tend to suffer from huge credibility challenges.
On the flip side, the U.S. exchanges list thousands of securities. It’s just not possible for Wall Street analysts to provide equal coverage to them all. And many ideas simply fall by the wayside. However, if you’re willing to be patient and can tolerate long bouts of volatility, these stocks under $10 could be intriguing.
To emphasize, no guarantees exist here. Still, by only targeting the same ideas as everyone else, the underlying predictability usually limits upside potential. In this case, we’re reversing the equation. By accepting unpredictability, we maximize return potential.
It’s terribly risky. But if you’re down for it, these are the stocks under $10 to buy.
Rush Street Interactive (RSI)
Founded in 2012, Rush Street Interactive (NYSE:RSI) is an online gaming platform. Specifically, its website declares that the company’s main directive is to create a fun, friendly, and fair ecosystem. Primarily, Rush Street operates multiple regulated online casinos in seven iGaming markets. It’s also picked up several industry awards. At the moment, RSI carries a market capitalization of $923.56 million and a per-share price tag of $4.16.
Financially, the company’s main strength is its robust top-line expansion. In 2019, Rush Street posted $63.7 million. By 2022, this figure skyrocketed to $592.2 million. According to investment data aggregator Gurufocus, its three-year revenue growth rate (per-share basis) clocks in at 87.2%, better than 98.83% of the competition.
While RSI symbolizes one of the stocks under $10 to buy for speculators, a primary risk is the lack of consistent profitability. If economic pressures build, this framework may worsen. That said, analysts peg RSI as a consensus strong buy. Their average price target lands at $5.50, implying over 32% upside potential.
uniQure (QURE)
A biotechnology firm, uniQure (NASDAQ:QURE) specializes in the rapidly burgeoning field of gene therapy. Specifically, it leverages an adeno-associated virus (AAV)-based technology platform with the ultimate aim of delivering groundbreaking therapeutics to patients living with various diseases. At the moment, uniQure conducts research and development for treatments targeting Huntington’s disease and hemophilia B. Currently, the company carries a market cap of $408.82 million and a per-share price tag of $8.57.
Financially, uniQure is heavily tied to its scientific narrative. On paper, the biotech posts a three-year revenue growth rate of 132.2%. However, the top line is erratic. In 2020, the company posted $37.5 million in sales. The following year, it rang up $524 million, then down to $106.5 million in 2022. Like other speculative stocks under $10 to buy, a pathway to consistent profitability remains a moving target.
Still, it does trade for 1.53x tangible book value, noticeably below the sector median of 2.62x. Lastly, analysts peg shares as a consensus strong buy. Their average price target comes in at $30.71, implying over 258% upside potential.
Entravision (EVC)
An American media company, Entravision (NYSE:EVC) primarily caters to the Spanish-speaking community. Per its public profile, Entravision owns television and radio stations along with outdoor media in several top Hispanic markets. Further, the company represents the largest affiliate group of the Univision and UniMas TV networks. Also, Entravision owns a small number of English-language TV and radio stations.
Presently, EVC carries a market cap of $319.4 million and a per-share price tag of $3.63. Now, before you place shares on your list of stocks under $10 to buy, you should note that Entravision is an incredibly risky endeavor. Since the beginning of the year, EVC fell almost 25%. And in the trailing one-year period, it’s down more than 36%.
Still, Entravision could be an interesting idea on the growing diversity in the U.S. Also, it’s expanding rapidly, with a three-year revenue growth rate of 50.2% along with an EBITDA growth rate of 51.7% during the same period. Enticingly, analysts peg EVC as a moderate buy with a $13.25 price target, implying 265% upside potential.
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.