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Best Stocks under $10

Let’s begin our list of the 10 best stocks under $10 in 2022. The stocks were analyzed based on the companies’ fundamentals and their popularity among the 867 hedge funds tracked by Insider Monkey as of the third quarter.

10 Best Stocks under $10 in 2022

10. Arcos Dorados Holdings Inc. (NYSE:ARCO)

Number of Hedge Funds: 8

Stock Price as of February 8: $6.86

Arcos Dorados Holdings Inc. (NYSE:ARCO) is the biggest franchisee of McDonald’s Corporation (NYSE:MCD) in the world. The company has the exclusive right to own, operate and give out franchises of McDonald’s quick-service restaurant (QSR) across 20 Latin American and Caribbean nations. Arcos Dorados Holdings Inc. (NYSE:ARCO) has a footprint of over 2,250 restaurants that are either company-operated or by its sub-franchisees. The establishment employs over 100,000 people.

On January 18, Thiago Bortoluci at Goldman Sachs upgraded Arcos Dorados Holdings Inc. (NYSE:ARCO) from a Neutral to a Buy rating and increased the price target from $6 to $7. Arcos Dorados Holdings Inc. (NYSE:ARCO) has also brought financial discipline and efficiency into the business, which has resulted in the company surpassing the analysts’ EPS forecast by $0.04 for Q3 2021. Arcos Dorados Holdings Inc. (NYSE:ARCO) stock price has gained momentum in the last month as it has soared by over 19% in comparison to the S&P 500 Index’s slump of over 4% during the same period.

9. American Finance Trust, Inc. (NASDAQ:AFIN)

Number of Hedge Funds: 9

Stock Price as of February 8: $8.11

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American Finance Trust, Inc. (NASDAQ:AFIN) is a publicly listed real estate investment trust (REIT) focused on managing a diverse portfolio of largely service-oriented and distribution-related commercial real estates in the United States. In line with its core operations, the company acquired 69 retail properties for a combined contract purchase price of $179.9 million during the year ended December 31, 2021.

During Q4 2021, American Finance Trust, Inc. (NASDAQ:AFIN) bought 13 properties for a contract purchase price of $28.1 million. The company also revealed that leases at nine properties in its single-tenant portfolio were extended during last year. This would add $7.2 million in net straight-line rent over the new lease terms.

The New York-based company is in the middle of the At The Market (ATM) equity offering program, which allows the company to issue $200 million worth of stock on the market without having to pre-announce the sale of shares. As of Q3 2021, American Finance Trust, Inc. (NASDAQ:AFIN) has used $128.2 of the ATM offering at an average share price of $8.87. On December 21, Barry Oxford at Colliers upgraded American Finance Trust, Inc. (NASDAQ:AFIN) from a Neutral to a Buy rating with a price target of $11.

Investors are not only paying attention to big-cap companies like Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc (NASDAQ:AAPL), and Alphabet inc. (NASDAQ:GOOG), but also spotting opportunities to invest in cheaper stocks like American Finance Trust, Inc. (NASDAQ:AFIN).

8. SFL Corporation Ltd. (NYSE:SFL)

Number of Hedge Funds: 13

Stock Price as of February 8: $8.43

SFL Corporation Ltd. (NYSE:SFL), founded in 2003, has transformed from a pure tanker owning company into one of the largest ship-owning organizations in the world. The Hamilton, Bermuda-based company has investments in the bulker container, tanker, and offshore segments and a huge charter backlog. SFL Corporation Ltd. (NYSE:SFL) has expanded its asset base by acquiring new or second-hand vessels and entering into long-term charter agreements.

SFL Corporation Ltd. (NYSE:SFL) beat the analysts’ EPS estimate of $0.21 by $0.05 for Q3 2021. Moreover, revenue for Q3 exceeded the estimate by $11.42 million. SFL Corporation Ltd. (NYSE:SFL) has been able to build a diversified asset pool that has aided it in navigating through varying economic circumstances. The company has paid out a quarterly dividend every quarter since 2004.

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On November 11, Mats Bye at DNB Markets upgraded SFL Corporation Ltd. (NYSE:SFL) stock from a Hold to a Buy rating with a price target of $9. Bye tells investors that he sees the Q3 dividend increase as evidence that the firm has enough “financial muscle” to manage any negative consequences of Seadrill emerging from Chapter 11.

7. BrightSpire Capital Inc. (NYSE:BRSP)

Number of Hedge Funds: 13

Stock Price as of February 8: $9.10

BrighSpire Capital, Inc. (NYSE:BRSP) is one of the largest publicly traded commercial real estate (CRE) credit REITs. The company focuses on acquiring, financing, and managing a diversified portfolio comprising of CRE debt instruments and net leased properties across the US.

Matt Howlett at B. Riley maintained a Buy rating on BrighSpire Capital, Inc. (NYSE:BRSP) stock with a price target of $12.50. The analyst sees BrighSpire Capital, Inc. (NYSE:BRSP) as one of the top picks in the commercial and mortgage REIT for 2022. Howlett thinks that the stock should trade at nearly 1.0x times the adjusted book value with a dividend per share payout of roughly $1.03.

The New York-based diversified REIT company has made substantial efforts in staging a turnaround, with the last major challenge being the ownership stake that is under DigitalBridge Group, Inc. (NYSE:DBRG). The significant ownership is expected to remain as an overhang on the stock price. BrighSpire Capital, Inc. (NYSE:BRSP) has the option to repurchase these shares from DigitalBridge through a tender offer that can comprise both cash and preferred stock.

6. CEMEX, S.A.B. de C.V. (NYSE:CX)

Number of Hedge Funds: 19

Stock Price as of February 8: $5.88

CEMEX, S.A.B. de C.V. (NYSE:CX) is a vertically integrated building materials company that is involved in the manufacturing and distribution of cement, ready-mix concrete, aggregates, and urbanization solutions. The company has a significant presence across the Caribbean, Africa, Asia, Europe, and the Middle East, with a headcount of over 41,000 employees.

On January 28, CEMEX, S.A.B. de C.V. (NYSE:CX) announced the takeover of Broquers Ambiental, a sustainable company working on the separation, recovery, and treatment of urban solid waste generated in Queretaro. The acquisition is made in line with the corporation’s vision of achieving carbon neutrality and aiding Queretaro and the rest of Mexico to achieve sustainability and transform towards a cleaner environment. Meanwhile, on December 30, CEMEX, S.A.B. de C.V. (NYSE:CX) announced the disposal of its operations in Costa Rica and El Salvador for $335 million. This disposal is a part of the Operation Resilience strategic plan, aimed towards optimizing the CEMEX, S.A.B. de C.V.’s (NYSE:CX) global portfolio.

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On October 11, Andres Cardona at Citi upgraded CEMEX, S.A.B. de C.V. (NYSE:CX) from a Neutral to a Buy rating with a price target of $9.30. The analyst highlights that the 24% pullback from its peak provides an attractive entry position in the stock. Andres expects the infrastructure cycle in the US and North America to recover to its full potential.

While corporations like Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc (NASDAQ:AAPL), and Alphabet inc. (NASDAQ:GOOG) offer safe returns, companies like CEMEX, S.A.B. de C.V. (NYSE:CX) provide an opportunity for beginner investors to make money without investing too much.

5. Nokia Corporation (NYSE:NOK)

Number of Hedge Funds: 22 

Stock Price as of February 8: $5.69

Nokia Corporation (NYSE:NOK) is a global technology corporation founded in 1865. The company has a broad portfolio of network equipment, software, services, and licensing opportunities.

Nokia Corporation (NYSE:NOK) reported its Q4 2021 results on February 3. Revenue was posted at $7.33 billion and beat the consensus estimate by $54.89 million. Meanwhile, the GAAP EPS of $0.14 beat the consensus estimate of $0.11. In the last year, the stock price of Nokia Corporation (NYSE:NOK) has soared by over 35% and has outperformed the S&P 500 Index, which experienced an increase of under 16% during the same period. For FY22, Nokia Corporation (NYSE:NOK) provided an annual revenue forecast between €22.60 billion and €23.8 billion. Meanwhile, the operating margin is expected to remain around 11% to 13.5%. In addition to this, the Board of Directors approved a dividend per share of €0.08 per share and authorized a share buyback program of €600 million over the next two years.

On December 20, Dominik Olszewski at Morgan Stanley began coverage on Nokia Corporation (NYSE:NOK) with an Overweight rating and a price target of $7.50. The analyst observes that the stock offers a positive risk to reward and is “on the route to recovery” by next year.

4. Comstock Resources, Inc. (NYSE:CRK)

Number of Hedge Funds: 24

Stock Price as of February 8: $7.37

Comstock Resources, Inc. (NYSE:CRK) is a natural gas pure-play that operates in the Haynesville shale. The Frisco, Texas-based corporation has an eleven-year reserve life, which is one of the best in the industry. The fundamental of natural gas is strong, which has aided Comstock Resources, Inc. (NYSE:CRK) in focusing on generating strong free cash flow. Comstock Resources, Inc. (NYSE:CRK) is a little more leveraged than its competitors, making it a high-risk and reward option in the natural gas universe. In the last six months, the stock price of Comstock Resources, Inc. (NYSE:CRK) has risen by over 25% as of February 8.

On January 14, Neal Dingmann at Truist reiterated a Hold rating on Comstock Resources, Inc. (NYSE:CRK) stock with a $10 target price. The analyst thinks that companies focused on crude oil exploration and production (E&P) should have a higher target price as he revised his crude oil price estimates by 10% for 2022 and his 2023 estimates by 8%. Crude oil prices are at a seven-year high on the back of tensions between Russia and Ukraine. The commodity has closed the past seven consecutive weeks in the green.

3. GCM Grosvenor Inc. (NASDAQ:GCMG)

Number of Hedge Funds: 25

Stock Price as of February 8: $8.82

GCM Grosvenor Inc. (NASDAQ:GCMG) is an alternative asset management company based out of Chicago. The hedge fund has an asset under management (AUM) of roughly $70 billion and employs nearly 500 professionals. GCM Grosvenor Inc. (NASDAQ:GCMG) provides customized investment solutions according to the preference and risk profile of the client. Over 95% of the investors are institutional-like corporations, financial institutions, insurance companies, sovereign wealth entities, and pension funds.

On December 24, Adam Beatty at UBS commenced coverage of GCM Grosvenor Inc. (NASDAQ:GCMG) stock with a price target of $18 and a Neutral rating. Beatty has a positive stance on GCM Grosvenor Inc. (NASDAQ:GCMG) as the company has been able to scale its operations by employing extensive experience and relationships related to limited partner (LP) fundraising. However, the analyst also noted that the hedge fund-styled absolute return business has grown at half the pace as compared to the operations of the private asset. Beatty believes that at the current valuation, the risk and return profile of GCM Grosvenor Inc. (NASDAQ:GCMG) is “balanced.”

2. GrafTech International Ltd. (NYSE:EAF)

Number of Hedge Funds: 31

Stock Price as of February 8: $9.79

GrafTech International Ltd. (NYSE:EAF) develops, manufactures, markets, and distributes graphite and carbon-based products globally. The Brooklyn Heights, Ohio-based corporation has over 150 patents and published patent applications while collaborating with electric arc furnace (EAF) operators. GrafTech International Ltd. (NYSE:EAF) is considered one of the biggest producers of graphite electrodes. These electrodes are employed in steel production using a technology called Electric Arc Furnace (EAF).

GrafTech International Ltd. (NYSE:EAF) reported its Q4 2021 results on February 4. The revenue for the period was $363.29 million, increasing by 7.5% YoY and outperforming the analysts’ estimate of $356 million. Sales and production volume increased by 19% YoY and 28% YoY, respectively. Meanwhile, the adjusted EPS was 50 cents, eight cents higher than consensus estimates of 42 cents.

During FY21, GrafTech International Ltd. (NYSE:EAF) lowered its debt by $400 million. This seems like a shrewd move by the company, considering there have been constant talks of interest rate hikes by the Federal Reserve. GrafTech International Ltd. (NYSE:EAF) is now left with $1.2 billion of debt on its balance sheet.

1. Coty Inc. (NYSE:COTY)

Number of Hedge Funds: 40

Stock Price as of February 8: $9.27

Coty Inc. (NYSE:COTY) is one of the biggest beauty and fragrance corporations in the world that develops, manufactures, markets, and distributes cosmetics, fragrance, nail care, skincare, along with professional and retail hair care products. The New York-based company was founded in 1904 by François Coty and currently sells its products across 130 countries around the globe.

On January 21, Linda Bolton Weiser at DA Davidson upgraded Coty Inc. (NYSE:COTY) from a Neutral to a Buy rating and maintained a target price of $11.50. This reflects a potential upside of more than 35% from the current stock price. The analyst thinks that the Chief Transformation Officer (CTO) Gordon von Bretten is expanding the gross margin by focusing on commercial, supply chain, portfolio, and material costs. Coty Inc.’s (NYSE:COTY) gross margin expanded by 190 bps YoY in FY21 and 480 bps YoY in Q1 2022. Weiser added that the recent pullback of over 20% in stock price since November 2021 provides an attractive entry point for investors with Coty Inc. (NYSE:COTY) growing in market share due to CoverGirl and Sally Hansen.

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