In many if not most cases, investors should recognize that you get what you pay for, although in rare moments, market participants can get away with bargain stocks to buy for under $10. To be clear, price rarely stands as the end-all, be-all for equity-based opportunities. You must conduct thorough research before putting your hard-earned money to work.
I will add another caveat and say that the above sentiment rings especially true under a deflationary environment. Recently, the Federal Reserve made good on its earlier signals of raising the benchmark interest rate. Subsequently, the associated rise in borrowing costs creates a deflationary dynamic, whereby the purchasing power of the dollar increases.
Therefore, you don’t want to target bargain stocks to buy for their own sake. Instead, you want to focus primarily on quality or potentially relevant names.
Despite the incoming risks of an ambiguous economic framework, some publicly traded securities offer a “two-fer.” These ideas bring both a psychologically discounted price tag and a fundamentally enticing business. So, without further ado, here are bargain stocks to buy for under $10.
| SELF | Global Self Storage | $5.22 |
| ABEV | Ambev | $2.76 |
| TGA | TransGlobe Energy | $3.72 |
| EGY | Vaalco | $5.43 |
| ITUB | Itau Unibanco | $5.58 |
| ORBT | Orbit International | $6.43 |
| AUY | Yamana Gold | $4.41 |
Global Self Storage (SELF)
Perhaps unintuitively, the unique dynamics of Covid-19 created an extraordinarily bullish framework for Global Self Storage (NASDAQ:SELF). As the Wall Street Journal noted, “Americans cleared out bedrooms and garages for home offices and gyms. Others packed up apartments and headed for Covid-19 cabins or home from campus. Businesses fearing shortages rented space to stash inventory. Availability dwindled and rents shot up.”
Now, the circumstance is a bit different. Rather than the sizable lift that SELF stock enjoyed in 2021, the security trades flat for this year. But trading flat represents a major victory. For instance, the benchmark S&P 500 index has dropped 22% on a year-to-date basis.
Moving forward, Global Self Storage may benefit from the post-pandemic (and post-rate-hike) housing market ecosystem. As mortgage rates reach 6%, home prices began dipping. I mean, what else are they going to do, keep rising? I don’t think so.
Still, some sellers are holding out, refusing to budge. This creates an opportunity gap where storage for stuff may command a premium, thus making SELF one of the bargain stocks to buy under $10.
Ambev (ABEV)
A Brazilian brewing company, Ambev (NYSE:ABEV) straddles what many folks consider penny stock territory. Trading hands for pennies under $3, ABEV may seem risky, and that’s because it is. Over the trailing five years, shares plunged nearly 55%. Therefore, prospective buyers shouldn’t engage Ambev with money they can’t afford to lose.
At the same time, ABEV represents a rarity. One of the bargain stocks to buy under $10, it’s also an outperformer. Again, while the benchmark S&P 500 dropped 22% YTD, ABEV has dropped just 2% during the same period. I can’t know for certain if the company can maintain this momentum. Nevertheless, some encouraging signs exist.
Fundamentally, Ambev enjoys a cynical benefit. Generally speaking, the alcohol industry features a recession-resistant profile. The matter presents much debate although people tend to seek escapism during hardships.
If you weigh analyst sentiment heavily, TipRanks notes that ABEV features a moderate buy rating. The average price target is $5, potentially making ABEV one of the best bargain stocks to buy under $10.
TransGlobe Energy (TGA)
An independent oil and natural gas exploration and production company, TransGlobe Energy (NASDAQ:TGA) concentrates its activities in Egypt and Canada. Of course, given the severe geopolitical flashpoints, TGA draws curious onlookers, particularly those seeking bargain stocks to buy under $10.
Still, merely being priced in single-digit territory doesn’t make a business compelling. Instead, broader fundamentals – particularly Russia cutting natural gas to Europe – brings heightened awareness of the hydrocarbon industry’s relevance. With Western nations that previously depended on Russian energy inflows scrambling for alternative solutions, the longer-term narrative for TransGlobe remains enticing.
As well, the company features solid longer-term growth and profitability metrics. In addition, one could make the case that TGA is undervalued. Currently, the company features a price-earnings ratio of 1.9 times, much lower than the industry median of 9.1.
Vaalco Energy (EGY)
Another company engaged in the hydrocarbon exploration industry, Vaalco Energy (NYSE:EGY) brings an intriguing profile to the table. Vaalco shares gained 70% YTD.
However, EGY arguably presents a higher-risk, higher-reward framework than TGA. According to Gurufocus.com, Vaalco could be a possible value trap. In contrast, the investment resource rates TransGlobe as fairly valued.
Nevertheless, if you want to add some spice to your hydrocarbon energy portfolio, Vaalco presents an enticing market idea. Recently, Russia issued a partial military mobilization involving 300,000 reservists, indicating that its invasion of neighboring Ukraine could last for a much longer time than anyone anticipated.
This dynamic translates to greater energy supply chain-related uncertainties, which may augur well for Vaalco. Therefore, EGY is one of the bargain stocks to buy under $10.
Itau Unibanco (ITUB)
Representing the largest banking institution in Brazil, Itau Unibanco (NYSE:ITUB) might not be a household name in America. However, that alone probably won’t stop ITUB from packing a serious punch should circumstances align properly. Itau is one of the best bargain stocks to buy under $10 for extreme speculators.
Fundamentally, Itau just might benefit from the unique dynamics associated with the post-pandemic new normal. During the prior inflationary cycle that affected large portions of the global economy, investors had every reason to put their money to work. Not doing so would mean holding onto increasingly “worth less” currency.
However, under a deflationary framework, currency strength rises. Essentially, investors enjoy a positive return on their wealth simply by doing nothing. But it’s under this framework that Itau’s wealth management business can earn its wings. Having access to class-leading tools and data, the financial services firm can distinguish itself through superior performance.
Orbit International (ORBT)
With the aforementioned conflict in Ukraine, publicly traded companies tied to the defense industry saw a surge of momentum. However, for the blue chips, investors obviously had to get in earlier to enjoy the lion’s share of the benefits. Still, if you’re interested in this segment, Orbit International (OTCMKTS:ORBT) could be a compelling opportunity.
For one thing, Orbit represents a lesser-known opportunity. Among the bargain stocks to buy under $10, ORBT fell just 1% YTD. There are two ways of looking at this. First, the performance favorably contrasts against the major equity indices, implying relevance for the underlying business. Second, Orbit may have much more room to run. Again, this military conflict doesn’t appear to be ending anytime soon.
Specializing in electronic components that integrate with various weapons systems, Orbit can not only rise with the Ukraine-Russia tensions but also with flashpoints in other parts of the world. Still, ORBT lacks analyst coverage so be sure to conduct your own due diligence.
Yamana Gold (AUY)
Saving in my opinion the riskiest idea for last, investors seeking bargain stocks to buy for under $10 may want to consider Yamana Gold (NYSE:AUY). Initially an intriguing idea because of the underlying mining business – specifically gold, silver and copper mining – Yamana theoretically was on its way to booming this year. However, the Fed’s pivot to a hawkish monetary policy clouds this narrative.
Under a deflationary cycle, it’s the dollar – not precious metals – that becomes the safe-haven asset. As the greenback strengthens, commodities generally tend to decline. So, AUY seems like a candidate for stocks to sell, except for one glaring detail. Since the start of this year, Yamana Gold gained nearly 3% in market value, much more than the stock index.
Could this mean that Yamana may benefit from the fear trade? Given the wild events that transpired not only in this year but throughout the new normal, I wouldn’t bet against it. Therefore, if you have some funds earmarked for speculation lying around, AUY could be intriguing.
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Read More: Penny Stocks — How to Profit Without Getting Scammed
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.