Even among the most conservative investors, the dream of buying into a company at a sub-$10 share price and watching it soar is part of the draw into stocks altogether. If an investor would have bought Amazon stock in the 1990s during the height of the dot com boom, they would see an outrageous return on investment. Similarly, investors who bought into Square in 2016 have seen investment returns of 700 percent or more.
Not every stock is a sure bet obviously, but buying into a stock that’s trading under $10 has a great deal of excitement. Here are 3 major stocks under $10 that could pay off big.
Aurora Cannabis (NYSE: ACB)
Recreational cannabis is officially legal in Canada. The markets have seen a great deal of volatility over the past quarter. Tilray has been a favorite among retail investors and stole the spotlight. The company many analysts expect to dominate the market in the long term is Aurora Cannabis. After trading on the OTC markets for most of its life, the stock recently premiered on the New York Stock Exchange. Even with the hype surrounding the industry as a whole, the stock is still trading at a low entry-point of $7.02.
Investors willing to take on a certain amount of risk, and throw some money into the recreational cannabis industry should look long at Aurora. The stock lost a lot of its value after legalization and investors walking away with profits. Now is an excellent entry-point for long-term investment on a stock with exposure to nearly the entire Canadian cannabis industry.
Nio Inc. (NYSE: NIO)
Similarly to the cannabis industry, the electric vehicle industry is an emerging market offering opportunities for high growth. Sometimes this simply means a high growth in share price surrounding excitement of the stock. EV company Nio, which does most of their business in China but is based in the U.S. is a risky pick for investors, but one offering a huge upside on investment. The company is currently trading at around $6.50 after falling off from highs of $11.33 in September.
Even with the low share price and steady buy-side decline, the stock continues to trade on high volume. Any positive news for the company is sure to send the shorts and bears scrambling and the share price up over 20 percent in the near term. The stock is unlikely to be a competitor with Tesla in the near-term considering the increased tariffs and limited market overlap, according to Berenberg Analyst Alexander Haissl.
“Tesla has already demonstrated its ability to outcompete incumbents and their internal combustion engine vehicles despite a higher purchase price, as consumers are willing to pay a premium for a better product and not just a different powertrain technology,” said Haissl.
Still, Nio is a young company with strong backing and a huge amount of potential for investors.
Ford Motor Company (NYSE: F)
In contrast to the other two stocks we’ve listed, Ford Motor Company has a long-standing history on public market. The company is trading near a five-year low at $9.38 and has a one-year consensus price target of $9.89.
Ford is unlikely to give huge returns on investment and should never be classified as a growth stock. Investors looking for a safe sub-$10 stock to invest in should look at Ford. In addition to little downside risk at the moment, the stock pays a healthy dividend at 6.46 percent.