7 Best Stocks Under $10 That Could Thrive From Rate Cuts

To understand the appeal of buying the best stocks under $10, it’s a good idea to go back to the basics. A share price reflects how much you pay for a dollar of a company’s earnings. So investors will generally want to pay as little as they can today. The benefit is twofold. First, they can build up a large position and second, they can do so in hopes of a bigger payout tomorrow.

However, stocks trading below $10 have their own set of risks. For example, some of these companies have very little profit or are not yet profitable. This means that you are investing in the future profits of a company. And this is why these stocks have a risk premium.

But like any stock category, you can find quality stocks with solid balance sheets. Even though these companies are still in their growth phase, their ability to manage this phase effectively can give you confidence that they will continue to manage future growth well. Let’s examine seven of the best stocks under $10 to consider in August 2024.

Altimmune (ALT)

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It is not uncommon to find clinical-stage biotech companies trading below $10. These companies are not profitable and generally have very low revenues. It is the case with Altimmune (NASDAQ:OTHER) which seeks to develop “innovative next-generation peptide-based therapeutics”. In layman’s terms, the company is promoting a GLP-1 drug candidate, pembidutide. The company is seeking one indication for obesity and another for metabolic associated steatohepatitis (MASH) – more commonly known as fatty liver disease.

The GLP-1 arena is likely to be crowded. So speculative investors should look for a “so what” factor. In the case of Altimmune, this may stem from recent results from its clinical trials that showed users were able to maintain more lean mass while reducing weight. In other words, most of the weight loss from pemvidutide came from fat tissue, as opposed to lean mass.

As of this writing, Altimmune has released its second quarter earnings. The negative earnings per share of 35 cents was lower than the negative 34 cents that analysts were expecting. The company generated revenue of $5,000 for the quarter.

Lithium Americas (LAAC)

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Eighteen months ago, many investors would not have thought they would be looking at lithium stocks as some of the best stocks under $10. But as demand in the electric vehicle industry sours, the market is oversupplied and the price of lithium is plummeting. Investing in cheap stocks often takes conviction. If you still believe in the long-term need for lithium, Lithium Americas (NYSE:LAAC) seems like a solid choice.

In 2023, the company began operations at its Cauchari-Olaroz mine in Argentina’s lithium triangle. In this first phase, the mine is expected to generate 40,000 tonnes per annum (tpa) of battery-grade lithium carbonate.

Based on expected mine production, Lithium Americas is projected to be cash flow positive in 2024, excluding working capital. The company is forecasting strong earnings growth over the next 12 months, and analysts are bullish. Nine out of 13 analysts have a strong buy rating on LAAC stock, with a price target of $7.56.

Arcadium Lithium (ALTM)

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Arcadiu Litiu (NYSE:Altmire) is another lithium miner to consider among the best stocks under $10. The company has only been publicly traded since February 2024, and ALTM shares have fallen 38% in that time. This is despite the fact that the company is growing revenues and is already profitable.

The concern may be that these gains will be eaten up by acquisitions. Specifically, Arcadium Lithium is paying $11 million in cash to acquire Li-Metal Corp’s lithium metal business.

However, growth by acquisition is a common strategy for mining companies, and it is not difficult for investors to understand the long-term benefits. What is more likely to cause the company’s stock price to fall is the constant top line miss. On August 7, ALTM reported second-quarter revenue of $254.50 million. That missed analysts’ expectations for $277.78 million.

However, the latest sale seems exaggerated. ALTM shares have been oversold since the market closed on August 8. Stocks are down, but maybe not for long.

Kinross Gold (KGC)

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The last mining stock on this list is the gold miner, Kinross Gold (NYSE:kg bw). The price of gold is up about 21% year-over-year (YOY) in 2024. Gold mining stocks tend to lag the price of the physical metal, but Kinross Gold has not. KGC shares are up 40% in 2024, and that may lead investors to believe that all the growth comes at a price.

But there are two reasons to think this is not the case. First, inflation is likely to remain above the Federal Reserve’s preferred 2 percent target. However, it also looks like the Fed will cut interest rates in September and perhaps even further after the November presidential election.

And second, central banks continue to buy gold as a hedge against geopolitical and macroeconomic uncertainty. All this means that the appeal of gold as a hedge is still alive. And with six active gold mines, Kinross Gold appears to be an attractive choice for speculators.

BlackSky Technology (BKSY)

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If you want to speculate on the best stocks under $10, artificial intelligence is not a bad place to start. That would be the argument for BlackSky technology (NYSE:BKSY). The company provides geospatial intelligence and data analytics products through its satellite and ground systems.

In this case, AI supports the company’s vehicles. However, BKSY touches many different sectors, including defense and space economies. The company’s products can also be used in applications such as disaster response and business intelligence. And it means the company generates revenue from government and private sector clients.

In terms of near-term catalysts, the company reports that it is on track to launch its first Gen-3 advanced satellite in the fourth quarter. According to the company’s investor presentation, it will “add 35cm ultra-high resolution imaging to the existing dynamic hourly monitoring constellation.”

BlackSky reported earnings on August 8th. Revenue of $24.9 million was up 29% from last year, and the company is narrowing its net loss.

Saber (SABR)

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Saber (NYSE:Saber) is a company that works behind the scenes of the trillion dollar travel industry. The company’s global distribution system provides a marketplace for airlines, cruise operators, hotels, passenger rail operators and more. If you’re a consumer, you don’t notice Sabre, but the companies you book your travel through certainly do. The stock is a beneficiary of the network effect.

Revenue is growing, but the company is not yet profitable. However, some context is necessary. As Ian Bezek explained, Saber made a significant investment in its IT systems in 2019. The global pandemic has brought travel to a standstill. So the company is now trying to pay down that debt in a rising interest rate environment.

Analysts are optimistic that the company can turn profitable in the next 12 months without rate cuts, but a cut or two is likely to seal the deal. This may change the opinion of analysts who continue to have a consensus hold rating on SABR stock.

Sirius XM (SIRI)

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At the end of 2023, Sirius XM (NASDAQ:SIRI) made headlines when news broke that Warren Buffett’s Berkshire Hathaway (NYSE:BRK-ANYSE:BRK-B) opened a new position in SIRI shares. But even the Buffett effect wasn’t enough to boost the company’s stock price. Shares of Sirius XM are down 42% year-to-date (YTD), and analysts have a consensus hold rating on SIRI stock.

Buffett is likely a fan of the company’s massive market share in the satellite radio market. There are questions about how long this type of business is viable. Many of today’s Gen-Z consumers will simply stream music through their mobile devices. But that’s probably not the company’s main demographic.

This demographic is firmly committed to service. This is why the company can continue to close exclusive content deals with major sports leagues that continue to provide consistent revenue growth.

In addition, the company launched its ad-supported 360L platform, which can make the company relevant in a streaming world.

As of the date of publication, Chris Markoch did not hold (either directly or indirectly) any position 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.

At the time of publication, the responsible editor had (either directly or indirectly) no position in the securities mentioned in this article.