People often assume that stocks trading below $10, also known as penny stocks, are fundamentally weak. Nothing could be farther from the truth. The fact is that there are some hidden gems in the under $10 space.
All it takes is a discerning eye to identify great buying opportunities in this category. There’s no denying that stocks in the under $10 category face several headwinds. They could be running obsolete business models or they could be newcomers trying to make their mark or they have run into tough weather in the short-term. Here are three great stocks under $10 to consider.
ADMA Biologics
ADMA Biologics (NASDAQ: ADMA) is an end-to-end commercial biopharmaceutical company which develops and markets specialty plasma-derived products for the prevention and treatment of infectious diseases.
In Q3 of 2021, the company reported total revenues of $20.7 million, an increase of over 101% compared to the year-ago period. It recorded positive gross profit for the first time ever. The EPS loss of 13 cents a share was the lowest recorded in the company’s history.
Clearly, the penny stock is on track to improve its financials and has a razor-sharp focus on the same. ADMA has said that it has the potential to hit profitability “no later than the first quarter of 2024”. It also said that it aims to have at least 10 plasma collection sites operational, with FDA licensing, by the end of 2023.
This stock could be a buy before it announces its numbers for Q4 2021 and the whole year for 2021. The stock is currently trading at $1.3. Analysts have given it an average target of $5.58 which is an upside of almost 330%.
Village Farms International
This cannabis grower is an agricultural producer that also produces tomatoes, bell peppers and cucumbers. The company reported revenues of $72.4 million in Q3, an increase of 68% compared to the same period in 2020.
What makes Village Farms (NASDAQ: VFF) interesting is that it already has a hedge built into its business. Its produce division (with greenhouse facilities in Canada, Mexico and the US) was responsible for $41.2 million of total sales.
Further, Village Farms’ marijuana subsidiary Pure Sunfarms has reported 12 straight quarters of positive EBITDA. It also acquired Balanced Health Botanicals, a cannabis-related company. In November 2021, the company announced that it had acquired 70% of private company ROSE LifeScience (a cannabis producer) for $36.7 million.
The penny stock has taken a hit in 2021, going from $11.82 on January 1, 2021 to $5.6 on January 20, 2022. However, analysts are bullish on the stock, and have an average target of $16.38 on it. This could mean a potential upside of almost 200% on Village Farms. It certainly merits a closer look.
Akoustis Technologies
This company develops, designs, manufactures and sells radio frequency (RF) filter products for the mobile wireless device industry in the United States. It works with single-crystal piezoelectric materials, a very important component in the smartphone and table segments.
In its December 2021 presentation, Akoustis Tech (NASDAQ: AKTS) said it is transitioning from seven years of development to commercialization. It says its addressable market size will have grown from $4.3 billion in 2019 to $6.9 billion in 2024. Its targeted customers include names like Samsung, Ericsson (NASDAQ: ERIC), Nokia (NYSE: NOK), Huawei, ZTE, NEC and Corning (NYSE: GLW).
In November, the company reported adding a new mobile customer in Asia. In 2021, it has also engaged with three RF component companies for the development of multiple 5G and WiFi XBAW coexistence filters for mobile devices.
Akoustis shipped out “four new 5G small cell network infrastructure filters to our tier-1 customer, received three design wins, received order from 2nd small cell network infrastructure customer, announced two CBRS design wins.”
The stock closed on January 20 at $5.4. Analysts have given it an average target of $14.88 which represents a potential upside of over 160%.
Disclaimer: The writer is an experienced financial consultant who writes for Finscreener.org. The observations he makes are his own and are not intended as investment or trading advice.
