There's plenty of upside to these 10 cheap stocks.
As the new year kicks off, it's the perfect time for investors to restock their portfolios. With the markets hitting new all-time highs day in and day out, it can seem difficult to find reasonably priced stocks that have big upside. Don't be fooled -- there are plenty of great companies to be had for less than $10 a share that have lots of room to run. Industries like gaming, cybersecurity and biotech are enjoying impressive gains at the moment, and the momentum of post-pandemic reopenings only adds fuel to the fire. Here are 10 of the top cheap stocks to buy for less than $10 per share as of yesterday's market close.
Glu Mobile (ticker: GLUU)
You may not know Glu Mobile, but there's a good chance you're familiar with its family of mobile games such as Walt Disney's (DIS) "Sorcerer's Arena" and "Kim Kardashian: Hollywood." An impressive 2020 combined with strong prospects for 2021 means the company should be on your radar. In the third quarter, Glu's revenue rose 48% year over year to $158.5 million. Revenue, along with net income of $13.4 million, represented a quarterly record. The 22% increase in bookings during the third quarter was particularly impressive, as this allowed Glu to surpass its 2020 goal of $428 million in bookings, with the company recording $435.8 million in bookings in a mere three quarters. Glu Mobile isn't just one of the best tech stocks to buy in January -- it's an excellent pick year-round, one with great growth potential thanks to a large audience and a great lineup of new games.
Although the original "Farmville" was permanently mothballed at the end of 2020, Zynga is looking ahead to a bright future. The game maker left its roots on Facebook (FB) long ago, focusing on the mobile market with games like the new "Harry Potter: Puzzles & Spells." Today, Zynga is the largest mobile-gaming company by market share, and the results of its pivot speak for themselves. In the third quarter, Zynga announced $503 million in revenue, a 46% increase year over year, and bookings of $628 million, a 59% increase. Both of those figures were company records, yet Zynga doesn't show signs of slowing down -- the company raised its full-year 2020 guidance, and it continues to integrate new acquisitions like Peak Games and Rollic to expand its stable of games. The mobile-gaming market is massive, and right now, Zynga sits on top.
Full House Resorts (FLL)
Next among the best cheap stocks to buy under $10 is Full House Resorts; the casino operator was forced to shut down its operations in Colorado, Indiana, Nevada and Mississippi early last year, but management used the time off to make some necessary changes and improve operations. New slot management systems at two locations, a revamped loyalty program and reduced costs from cutting things like low-priced buffet dining have all helped boost Full House's balance sheet. A customer base that drives to its locations rather than flies has helped sustain Full House's business even as travel has deteriorated, while a growing online gambling operation continues to bring in money throughout the pandemic. Full House's operating income tripled year over year in the third quarter, and the company is well on its way to continued success in 2021.
Sirius XM Holdings (SIRI)
Since the merger between Sirius Satellite Radio and XM Satellite Radio in 2008, Sirius XM has been the only satellite radio company on the market. That said, complete control of a market is only profitable when that market is profitable, and with auto sales declining throughout early 2020 and millions of Americans stuck at home, Sirius hasn't been able to capitalize on its position. The result was a 15% decline in stock price in the last year. Sirius has already seen improvements in key areas -- for instance, while advertising revenue declined 34% in the second quarter, it was only down 6% year over year in the third quarter. Meanwhile, subscriber churn remained exactly the same year over year at 1.7%, indicating that Sirius is keeping its customers. With car sales on the rise and vaccinations allowing people to get back on the road, Sirius is well-positioned for a comeback.
FAT Brands (FAT)
FAT Brands, owner of Fatburger, Buffalo's Cafe and a number of other fast-casual concepts has spent the past year beefing up in preparation for restaurant reopenings. FAT acquired casual restaurant company Johnny Rockets back in September, effectively doubling the company's sales and giving FAT Brands a combined footprint of more than 700 restaurants across the globe. FAT also opened up 45 new restaurants in 2020 and plans on opening another 12 through the fourth quarter -- that's more new locations than the company opened in 2019. In what has largely been a terrible year for restaurant companies, FAT has made some big moves that will set it up for success in 2021. Acquisitions and new restaurants, combined with systemwide sales that are improving slowly but surely, make FAT an excellent cheap stock to buy.
Nokia Corp. (NOK)
Last year began well enough for Nokia as opportunities arose for the company to assist with 5G rollouts in Western nations that had decided to turn against major Chinese competitor Huawei, and shares climbed steadily through August. Things took a turn in September when the company lost out to Samsung on a $6.64 billion contract to install and maintain 5G equipment for Verizon Communications (VZ), and the third-quarter earnings report brought no relief. Needless to say, Nokia's new CEO Pekka Lundmark has his work cut out for him. To his credit, he has a plan: reorganize the company and focus on business segments where he believes it can excel while shedding dead weight. These ideas won't change the company's fortunes overnight, but it's a start -- and with shares this cheap, it won't cost investors much to take a chance on Nokia.
Casper Sleep (CSPR)
Talk about unfortunate timing. Casper Sleep, the direct-to-consumer mattress seller, went public in February 2020, just as the pandemic was gaining steam. It certainly didn't help that Casper had yet to make a profit, as the rest of the year followed a predictable pattern as foot traffic at stores deteriorated and sales plummeted. The result has been a 41% decline in share price over the last year, while as of the third quarter, sales remain depressed and supply chain problems persist. That said, management at Casper believes the worst is behind it, and there are indications that they're correct. The company opened 17 net new locations in the third quarter, while it expanded its retail partnerships and saw a 28.3% increase in revenue in that category. Perhaps most importantly, earnings before interest, taxes, depreciation and amortization, or EBITDA, loss improved by 55% year over year as Casper grows closer to profitability.
United Microelectronics Corp. (UMC)
UMC isn't the biggest semiconductor manufacturer on the market, but as the world shifts to working from home, it's becoming clear that there's enough demand to go around. UMC has reaped the rewards of a booming market for mobile phones, connected devices and online education -- and the results showed up in the company's third-quarter earnings. Revenue rose 18.9%, while gross profit grew nearly 52%, as strong demand for UMC's 28-nanometer chips pushed profits higher. Shares are up an eye-watering 240% in the last year, but compared to larger competitors like Taiwan Semiconductor Manufacturing (TSM), UMC still looks cheap. Demand for semiconductor chips has only grown in recent years, while UMC has increased its manufacturing capacity after acquiring a Japanese fabrication facility, paving the way for future profits.
Viking Therapeutics (VKTX)
Biotech companies like Viking Therapeutics make for excellent speculative investments, with the opportunity for massive profits if the company's treatments get regulatory approval. Viking's big idea is VK2809, an oral treatment for lipid disorders like non-alcoholic steatohepatitis (NASH) and fibrosis -- disorders that don't currently have any viable treatments. VK2809 is in a Phase 2b study, and with an addressable market estimated to be worth several billion dollars, shareholders are keeping a very close eye on upcoming results. While investors wait, they'll have to endure quarters of low profitability -- in the third quarter, Viking reported a net loss of $9.3 million, compared to a net loss of $5.7 million in the same quarter last year. But the bigger loss was due to higher R&D expenses, a trade-off that may just benefit investors down the road.
As the massive government hack in December has shown, cybersecurity has never been so important -- luckily, Identiv is there to help. Identiv deals not only in cybersecurity, but also physical, on-premises security measures like smart card readers. The company has also expanded its repertoire in light of the pandemic, providing companies with contact tracing software and body temperature trackers. When employees go back to work, Identiv profits. While net revenue rose nearly 8% year over year, it grew an impressive 30% quarter over quarter as companies and Federal facilities with Identiv contracts reopened their doors. An expanding market and a growing portfolio of products is a strong combination for Identiv, and the momentum of reopenings should keep pushing Identiv's shares higher.
The top cheap stocks to buy for less than $10:
-- Glu Mobile (GLUU)
-- Zynga (ZNGA)
-- Full House Resorts (FLL)
-- Sirius XM Holdings (SIRI)
-- FAT Brands (FAT)
-- Nokia Corp. (NOK)
-- Casper Sleep (CSPR)
-- United Microelectronics Corp. (UMC)
-- Viking Therapeutics (VKTX)
-- Identiv (INVE)