5 Stocks Under $10

If you've got ten bucks, I have some stock ideas for you.

I've been singling out attractive opportunities in low-priced stocks since my original "5 Stocks Under $10" column nine years ago, and I've seen plenty of stocks with pocket change prices generate incredible gains.

There are risks, and they are readily apparent given the recent volatility. There are often good reasons for stocks to be ignored or beaten down. However, a market rally can work wonders for the unloved with positive catalysts in their pockets.

Let's go over my five picks from March 2009 to prove my point.

Stock	2/18/11	3/13/09	Gain
Sirius XM Radio	$1.81	$0.198	814%
Bare Escentuals*	$18.20	$3.66	397%
Focus Media	$26.71	$5.74	365%
Geron	$5.07	$4.36	16%
Ford	$15.77	$2.19	620%

* Bare Escentuals was acquired for $18.20 a share earlier this year.

The average gain of 442% in less than two years is remarkable. Sirius XM Radio (Nasdaq: SIRI  ) has come a long way since teetering on the brink of bankruptcy, posting another quarter of subscriber growth and free cash flow expansion last week.

Geron (Nasdaq: GERN  ) may be the slacker in the lot, but tackling cancer was never going to be an overnight success story. Its longtime CEO stepped down earlier this month.

Let's go over this month's picks.

Vonage (NYSE: VG  ) -- $4.26
It was hard to take Vonage seriously at first. A busted IPO, followed by the company going after deadbeat customers as investors, made the web-based telephone service provider a popular Wall Street punchline.

Well, Vonage is having the last laugh these days.

Vonage clocked in with an adjusted quarterly profit of $0.06 a share, well ahead of Wall Street expectations and twice the $0.03 a share it earned a year ago. It also closed out the quarter with more subscribers than when it began. This is the first time that we've seen this happen at Vonage in two years.

BYD (OTC BB: BYDDY.PK) -- $8.59
BYD began as a seller for cell phone rechargeable batteries, but has grown to become China's fastest-growing automaker. It's also on the forefront of hybrid and all-electric cars in the world's most populous nation.

Selling cars in China is a sweet gig these days. China's economy continues to grow at a rapid clip, affording more people the luxury of owning an automobile.

The rub here -- and the reason that we find BYD falling into our laps in the single digits -- is that China's government has tightened auto ownership restrictions to curb traffic congestion. This should be a temporary blip. China will build out its roadway infrastructure. Pollution concerns will be addressed. BYD is being challenged in the near term, but it's all revved up for a better-looking tomorrow.

LoJack (Nasdaq: LOJN  ) -- $6.37
The auto-recovery specialist has been more found than lost lately.

LoJack posted driven quarterly results last week. Revenue climbed 12%, fueled by a surge in its international business outside of Canada. LoJack's quarterly profit of $0.15 a share reversed a year-ago deficit.

LoJack has crushed Wall Street's profit targets in each of past year's four quarters. A strong recovery in the stateside auto market and booming growth in Italy should make it easy to beat the $0.38 a share that analysts are projecting for 2012. You know what a growing turnaround situation priced at less than 17 times next year's estimated earnings is, don't you? A steal!

Martha Stewart Living Omnimedia (NYSE: MSO  ) -- $4.03
Investors are the ones who feel as if they've been handed a prison sentence for trading. Martha Stewart's company had posted losses in eight of the nine previous quarters before bouncing back in the black during last week's report.

Things aren't perfect. MSLO's flagship publishing business is in a funk. However, digital ad revenue has climbed 26% over the past year. Stewart's company has been able to learn new media tricks, cranking out a premium version of its magazine for tablets and scoring with a recent cookie-recipe app.

Analysts see growing revenue and a return to profitability this year. Stewart herself would consider that a good thing.

Nokia (NYSE: NOK  ) -- $9.19
I'm not a fan of the world's leading handset maker's decision to sell its soul in becoming a Windows Phone 7 mouthpiece. However, I am a fan of companies that get beaten down to the single digits unjustly.

Nokia remains a cash-rich, high-yielding juggernaut that still commands nearly a third of the world's cell phone market. It's not going away on the heels of one desperate decision. It wouldn't shock anyone to see Nokia back in the double digits before long.

Five for the road
These five stocks aren't trading in the single digits by accident. If I'm right about the catalysts, though, they may not be trading in the single digits for too much longer.

Finding promising stocks while they're still cutting their baby teeth is at the heart of the Rule Breakers newsletter that I write for. You can check it out for free this month with a 30-day trial subscription. There are a half dozen active stock recommendations in the growth stock research service trading for less than $10 at the moment, including BYD. Check those out, and I'll be back with more on the third Monday of next month.