3 stocks under $10 to buy now

Soaring inflation, consecutive interest rate hikes and the possibility of an economic slowdown have kept the stock market under enormous pressure. However, the S&P 500 reached its highest level since June earlier in the week. Investors shrugged off recession worries as robust earnings reports and positive economic data boosted sentiment.

St. Louis Federal Reserve Chairman James Bullard believes the United States is currently not in a recession. “With all the job growth in the first half of the year, it’s hard to say there was a recession,” he added.

Moreover, the July jobs report better than expected, with nonfarm payrolls up 528,000 and an unemployment rate of 3.5%, versus Dow Jones estimates of 258,000 and 3.6%, respectively. In addition, wage growth was higher than expected.

Given the scenario, we think investors should consider investing in cheap ARC Document Solutions, Inc. (BOW), Alliance Global Group, Inc. (ALGGY), and Birchcliff Energy Ltd. (BIREF), which are currently trading below $10 but could skyrocket in the near term, given their strong fundamentals.

ARC Document Solutions, Inc. (BOW)

ARC, a digital printing company, provides digital printing and document-related services in the United States.

For the fiscal quarter ended June 30, 2022, ARC’s net sales increased 8.4% year-over-year to $74.60 million. Net income attributable to ARC increased 26.9% over the prior year value to $3.30 million. Adjusted EBITDA for the quarter was $11.30 million, reflecting a 1.8% year-over-year increase. Additionally, its EPS was $0.08, up 33.3% from the prior year quarter.

The company exceeded the consensus PES estimates for each of the last four quarters. The stock has gained 23.6% over the past year and 9.5% over the past month to close the last trading session at $2.88.

In terms of trailing 12-month EV/sales, ARC is trading at 0.66x, 63% below the industry average of 1.78x. Its trailing 12-month price-to-sales multiple of 0.42 is 68.2% below the industry average of 1.34.

ARC’s strong fundamentals are reflected in its POWR Rankings. The stock has an overall rating of A, which translates to Strong Buy in our proprietary rating system. POWR ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

The company also has an A rating in value, quality and sentiment and a B rating in growth. The stock is ranked #2 out of 42 stocks in the B rating Outsourcing – Business Services industry. To get the ARC ratings for Momentum and Stability, Click here.

Alliance Global Group, Inc. (ALGGY)

ALGGY engages in real estate development, tourism, entertainment and gaming, food and beverage, quick service restaurants and infrastructure development businesses. It operates through Megaworld; Emperor; Travelers; and GADC segments. He is based in Quezon City, Philippines.

ALGGY’s consolidated revenue increased 18% year-on-year to 37.50 billion pesos ($0.67 billion) in the first quarter of fiscal 2022. Net profit increased 52% from the quarter of the previous year to reach 3.90 billion pesos ($0.07 billion). Net profit rose 67% from the same period a year earlier to reach 5.40 billion pesos ($0.10 billion).

Analysts expect ALGGY’s revenue to be $2.80 billion, a 2.7% year-over-year increase for the fiscal year ending December 2022.

In terms of forward EV/EBITDA, ALGGY is trading at 7.62x, 29.9% below the industry average of 10.87x. Its forward EV/EBIT multiple of 9.70 is 36% below the industry average of 15.16.

The stock has gained 10.2% over the past month to close its last trading session at $8.87.

The company has an overall rating of B, which translates to Buy in our proprietary rating system. ALGGY is rated B in quality, stability and value. Within the REIT – Diversified industry, it is ranked #1 out of 49 stocks.

Click here for ALGGY’s additional POWR ratings for momentum, sentiment and growth.

Birchcliff Energy Ltd. (BIREF)

Based in Calgary, Canada, BIREF, an oil and natural gas midstream company, acquires, explores, develops and produces natural gas, light oil, condensates and natural gas liquids in Western Canada.

For the fiscal quarter ended March 31, BIREF’s cash flow from operating activities increased 86.6% year over year to $154.15 million. Its net profit rose 467.5% from a year ago to $125.79 million, while net earnings per share were $0.47, reflecting a 487.5% increase year over year.

The consensus revenue estimate of $298.45 million for the fiscal quarter ended June 2022 represents a 92.7% year-over-year improvement. Additionally, its consensus revenue estimate of $1.07 billion for the fiscal year ending December 2022 represents a 45.9% increase over the prior year.

In terms of forward EV/EBIT, BIREF is trading at 3.39x, 60.4% below the industry average of 8.54x. Its forward-looking EV/EBITDA multiple of 2.64 is 53.5% below the industry average of 5.68.

Over the past year, the stock has gained 98.7% to close the last trading session at $7.37. It has gained 30.1% over the past six months.

Not surprisingly, the stock has an overall rating of B, which translates to Buy in our POWR rating system. BIREF has an A rating in Momentum and a B rating in Growth and Quality. It is ranked No. 12 out of 97 stocks in the B rating Energy – Oil & Gas industry.

Beyond what is stated above, we also rated BIREF for Sentiment, Stability and Value. Get all BIREF ratings here.

Shares of ARC were trading at $2.86 per share on Friday afternoon, down $0.02 (-0.69%). Year-to-date, ARC is down -14.31%, compared to a -12.56% rise in the benchmark S&P 500 over the same period.

About the Author: Komal Bhattar

Komal’s passion for the stock market and financial analysis led her to pursue her career in investment research. Its fundamental approach to stock analysis helps investors identify the best investment opportunities. After…

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