Plenty of tech stocks and other growth-oriented stocks are clearly overpriced at this point. However, there are some unrecognized diamonds in the rough, many of which are priced under $10.
Stocks priced under $10 are particularly attractive as they generate significant interest from everyday traders looking to buy into companies with lower share prices.
Below, using the POWR Ratings service, we provide a look at five "Strong Buy" stocks priced under $10: United Micro Corporation (UMC), Wipro Limited (WIT), CimbaBay Therapeutics (CBAY), Pacific Ethanol (PEIX) and Surface Oncology (SURF).
United Microelectronics Corporation (UMC)
Semiconductor applications require foundry services provided by the likes of UMC. In particular, UMC's primary strength is in generating integrated circuit wafers customized for each individual client.
Take a look at UMC's POWR Ratings and you will find it has “A” grades in Trade Grade, Peer Grade, and Industry Rank, and a “B” Buy & Hold grade. The stock is ranked in the top 10 of 86 in the Semiconductor & Wireless Chip category.
Out of six analysts who cover the stock, five rate it as a Buy, and one rates it as a Hold. In September, UMC's revenue spiked by more than 30%, which was the company's best monthly growth since spring. The company will continue its production expansion capacity through next year, providing wafers and other process technologies for its ever-growing client base.
Wipro Limited (WIT)
This global IT services provider specializes in consulting, software solutions, BPO services and more. WIT has clients across the globe. The WIT POWR Ratings reveal “A’s” for Trade Grade and Buy & Hold Grade, and “B’s” for the Peer Grade and Industry Rank components.. WIT is ranked third of 14 stocks in the Outsourcing - Tech Services category.
WIT's forward P/E ratio of 23 is fairly reasonable considering its sector is filled with companies with much higher forward P/Es. WIT quickly climbed from $4.35 on 9/20 to more than $5.
CimbaBay Therapeutics (CBAY)
If you are looking for an opportunity to invest in a biopharmaceutical company that develops and commercializes proprietary new medicine to treat diseases, CBAY is worthy of your consideration. As an example, CBAY's arhalofenate appears to successfully treat gout.
CBAY receives “A’s” for Trade Grade, Buy & Hold Grade, and Peer Grade. The stock is ranked in the top 40 out of nearly 400 in the Biotech sector. The top analysts are uber-bullish on CBAY, setting an average price target of $13.25, meaning there is more than 70% potential upside.
CBAY has even more momentum now that it is resuming development of its lead drug candidate that treats diabetes and other health maladies.
Pacific Ethanol (PEIX)
Ethanol marketing and production is now big business. PEIX markets this fuel throughout the western portion of the United States. Furthermore, PEIX is now producing ethanol at its site in Madera County, CA.
In the POWR Ratings, PEIX receives “A’s” in Trade Grade, Buy & Hold Grade, Peer Grade, and a “B” for Industry Rank. The stock is ranked in the top 10 of 28 in the Agriculture space. The top analysts insist PEIX is under-priced, setting an average price target of $16.50, meaning it has more than 73% potential upside.
Shares of this up-and-coming stock soared in September as its ethanol is used in disinfectants and sanitizers the masses are relying on to combat the spread of COVID-19. If a second wave of the virus emerges, PEIX should move even higher.
Surface Oncology (SURF)
SURF develops therapies for cancer treatment. SURF's product pipeline is currently in the clinical stage, meaning it has unrealized potential.
SURF has “A” grades in three of the four POWR Rating components. The stock is ranked in the top 30 of 239 publicly traded companies in the Medical - Pharmaceuticals space.
SURF recently popped when news broke of the company hiring an investment bank to look into the company's sale. If an industry power player such as GlaxoSmithKline makes a move to scoop up SURF, the stock will undoubtedly go even higher.
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UMC shares were trading at $5.50 per share on Wednesday afternoon, up $0.05 (+0.92%). Year-to-date, UMC has gained 112.70%, versus a 9.66% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management.
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