4 Buy-Rated Stocks Trading Under $10: Sirius XM, United Microelectronics, A10 Networks, and 22nd Century Group

As the market looks forward to concluding 2020 on a positive note, many investors have started eyeing stocks that have upside going into 2021. Low priced socks are preferred by investors that want to invest only a nominal dollar amount in stock markets. However, before betting on a low-priced stock, it is critical that one judge its upside potential based on several factors.

It is advisable to always look at the fundamentals of a company and the growth prospects of its industry. This is by far the best strategy to pick a low-priced, long-term winner. Another factor that investors should consider is a stock’s trading volume. Usually, high-volume indicates good liquidity, while low volume could suggest difficulty in selling a stock at a chosen time.

Sirius XM Holdings Inc. (SIRI), United Microelectronics Corporation (UMC), A10 Networks, Inc. (ATEN), and 22nd Century Group, Inc. (XXII) are four stocks that are currently trading at less than $10. These stocks represent different industries that have solid growth prospects. Also, these stocks have enough fundamental strength to soar going into 2021 we believe.

Sirius XM Holdings Inc. (SIRI)

SIRI offers subscription-based satellite radio services in the United States. It broadcasts programming includes various genres of music, entertainment, sports, comedy, news, traffic, as well as weather forecast channels. The company provides streaming services available on smartphones and tablets that include music and non-music channels and podcasts. It also delivers channels not available on its satellite radio service.

Howard Stern, the so-called "King of All Media," recently announced an extension of his long-running deal with satellite radio giant SiriusXM for its flagship show by five years. The deal covers the Stern archive for seven more years.

During the third quarter ended September 30, 2020, SIRI’s revenue rose 1% year-over-year to $2 billion. SiriusXM addition of Self-Pay net subscribers during the third quarter were 169,000. EPS for the quarter increased to $0.06 from $0.05 posted in the prior-year period.

The consensus revenue estimate for SIRI for the fourth quarter represents a 0.2% increase year-over-year to $2.1 billion. EPS is expected to grow at the rate of 15.4% per annum over the next five years.

On a year-to-date basis, SIRI felll10.9% to close yesterday’s trading session at $6.37. Over the past six months, the stock climbed 5.6%.

How does SIRI stack up for the POWR Ratings?

B for Trade Grade

B for Buy & Hold Grade

B for Peer Grade

B for Overall POWR Rating

It is ranked #2 of 11 stocks in the Entertainment - Radio industry.

United Microelectronics Corporation (UMC)

UMC, a semiconductor wafer foundry, operates in Taiwan, China, Singapore, Hong Kong, Japan, the United States, Europe, and other countries. Through its Wafer Fabrication and New Business segments, the company provides mask tooling, circuit design, wafer fabrication, and assembly and testing services. UMC is also involved in the research, development, and manufacturing of products in the solar energy and LED industries.

eMemory and its subsidiaries, PUFsecurity and UMC, have announced a joint venture to develop the world’s first PUF (Physical Unclonable Function)-based secure embedded flash solution. PUFsecurity’s PUFflash will integrate eMemory’s NeoPUF into UMC’s 55nm embedded flash technology platforms to offer a secure embedded flash.

During the third quarter ended September 30, 2020, UMC’s revenue climbed 18.9% year-over-year to NT$44.87 billion. Remote working and learning contributed to market demand for wireless connectivity applications. Its EPS for the quarter climbed to NT$0.75 from NT$0.55 posted in the prior-year period. Wafer shipments hit2.25 million 8-inch equivalent wafers during the quarter, while capacity utilization was 97%. In the near future, UMC anticipates benefit from newly deployed 5G smartphones, IoT devices, and other consumer products.

Its EPS estimate for the quarter ending December 31, 2020 indicates a 20% increase to $0.06, while the Street estimates revenue to rise 14.4% year-over-year to $1.6 billion.

UMC has surged 194.8% on a year-to-date basis to end yesterday’s trading session at $7.90. During the past six months the stock has rallied 202.7%.

The POWR Ratings are quite bullish on UMC as well. It has a “Buy” rating with an “A” in Trade Grade and Industry Rank. Among Semiconductor & Wireless Chip stocks, it is ranked #51 of 86th.

A10 Networks, Inc. (ATEN)

ATEN offers software and hardware in the United States, Latin America, EMEA countries, Japan, and other Asia Pacific regions. The company offers its solutions on bare metal software, optimized hardware appliances, cloud-native software, containerized software, and virtual appliances. Its various products and services include Thunder application delivery controller (ADC), Lightning ADC, and Thunder carrier grade networking product.

As a part of its expanding portfolio of professional content creation products, ATEN has launched UC3021 CAMLIVE+ for video capturing. The new product allows content creators to easily capture and transfer an image from their professional camera or game console’s video image to an Android smartphone or a PC to livestream in 1080P60 format.

During the third quarter ended September 30, 2020, ATEN’s revenue climbed 7.2% year-over-year to $56.6 million driven by demand from cloud providers. This is the company’s stock’s third straight year-over-year revenue growth of more than 6%. EPS for the quarter was $0.08.

ATEN is estimated to see revenue growth of 4.9% in the quarter ending December 31, 2020 to $63.3 million. The company’s EPS is expected to rise at a rate of 23% per annum over the next five years.

ATEN closed yesterday’s trading session at $8.69, gaining 26.5% year-to-date. Over the past six months the stock has jumped 22.7%.

ATEN is rated a Buy in our POWR Ratings system. It has an “A” for Trade Grade and a “B” for Buy & Hold Grade and Industry Rank. It is ranked #26 of 53-stock Technology - Communication/Networking industry.

22nd Century Group, Inc. (XXII)

XXII is a plant biotechnology company that offers technology to change the level of nicotine and other nicotinic alkaloids in tobacco plants, as well as cannabinoids in hemp/cannabis plants through genetic engineering and plant breeding. XXII also offers SPECTRUM research cigarettes for independent clinical studies. It also offers low nicotine tobacco cigarettes under the Moonlight and Moonlight Menthol brands.

XXII’s revenue for the third quarter ended September 30, 2020 increased nearly 13.1% year-over-year to $7.3 million. The company’s loss per share during the quarter narrowed to $0.03 from a loss per share of $0.08 posted in the same period last year.

XXII has recently been granted a new and highly valuable U.S. patent that provides it with precise genetic control over nicotine levels in virtually any variety of the tobacco plant. Analysts estimate XXII’s revenue for the full year 2020 to be $26.8 million, up 3.7% year-over-year.

On a year-to-date basis, XXII has rallied 103.6% to close at $2.24 yesterday. Over the past six months, the stock surged 151.5%.

XXII’s strong fundamentals are reflected in its POWR Ratings, it has a “Buy” rating with an “A” in Trade Grade, and Peer Grade. Within the Biotech industry, its stock is ranked #90.

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SIRI shares were trading at $6.38 per share on Thursday afternoon, up $0.01 (+0.16%). Year-to-date, SIRI has declined -9.98%, versus a 17.28% rise in the benchmark S&P 500 index during the same period.

Namrata is an accomplished financial journalist, with nearly a decade of experience. She specializes in interpreting news releases and framing investment strategies, and has worked with some of the leading companies in real estate, banking, insurance, mutual funds, financial research, fintech, and investment education.

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