3 Dirt-Cheap Stocks Under $10 That Could EXPLODE!
Investing in dirt cheap stocks under $10 has a lot of appeal. One of the benefits is that a low share price allows you to buy more shares with a smaller amount of money. If the stock price increases significantly, even a small percentage gain can translate to a large return on your investment.
Penny stocks tend to be more volatile than established companies. Cheap stocks under $10 often fall into this category. This can be risky, but some investors are drawn to the potential for quick profits that result from timing the market correctly.
Unfortunately, cheap stocks under $10 are often from companies with limited track records, unproven business models, or a history of financial difficulties. This makes them much riskier than stocks from established companies. However, the stocks discussed in this article all benefit from strong revenue growth and, more importantly, positive net earnings. That makes them more financially stable than the vast majority of penny stocks. Let’s take a look at those firms and their stocks.
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DLocal (DLO)
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DLocal (NASDAQ:DLO) operates a payment processing platform that helps businesses operating in international markets, especially emerging markets, accept payments from customers. That makes it especially attractive as the fintech stock opportunity continues to gain momentum and opportunities to bring more consumers online increase.
DLocal allows merchants to accept a wide range of local payment methods in the countries they operate in. It can include payment options like cash payments through convenience stores, bank transfers, mobile wallets, and local debit cards, among others. At a high level, DLocal is a bridge between international businesses and customers in emerging markets.
Total payment volume grew by 49% in the first quarter. Despite that rapid growth, weaker-than-anticipated earnings sent shares downward. That’s a fair representation of what investors should expect from DLocal moving forward: strong top-line growth but stagnant earnings that aren’t expected to improve until 2025.
It still provides earnings to shareholders, is growing well above 30%, and can reasonably double in price. That makes DLO stock worthwhile as it harbors breakout potential.
Fennec Pharmaceuticals (FENC)
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Fennec Pharmaceuticals (NASDAQ:FENC) is a revenue stage biopharmaceutical stock with the potential to grow rapidly. Shares currently trade for $6.30 but the two analysts covering the equity believe it is worth $15 and $17, respectively.
The company calls its leading candidate drug PEDMARK. Doctors indicate it to prevent hearing loss in children undergoing chemotherapy. Chemotherapy can cause hearing loss in pediatric patients undergoing treatment for localized, non-metastatic, solid tumors.
It is the only FDA-approved therapy indicated to reduce the risk of hearing loss associated with chemotherapy in pediatric patients.
Fennec Pharmaceuticals executed an exclusive licensing agreement with Norgine to commercialize PEDMARQSI, a synonymous trade name for PEDMARK in Europe, Australia, and New Zealand. The firm received approximately $43.2 million from that deal and has the potential to receive up to approximately $230 million in additional commercial and regulatory milestones.
The company had more than $51 million in cash at the end of the most recent quarter and is producing earnings overall.
Direct Digital Holdings (DRCT)
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Direct Digital Holdings (NASDAQ:DRCT) is another high-risk, high-reward stock under $10 with the potential to explode. The company provides advertising services and has been up and down in 2024. Shares currently trade for $4 and change after soaring above $33 in March.
The reason for the sharp decline was straightforward: Direct Digital Holdings missed revenue and earnings expectations by a wide margin. Revenues were anticipated to approach $66 million but came in well short at $41.01 million. That led to a -$0.08 EPS, whereas 26 cents had been expected.
The company also readjusted its overall 2024 outlook sharply as a result. The company now anticipates $180 million in sales this year, down from $242.6 million previously. Most metrics suggest that DRCT shares are currently priced right.
Revenues are on track to more than double this year and earnings growth is expected to approach 50%. The correction is an opportunity for brazen investors.
On the date of publication, Alex Sirois 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.
On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.
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