Investors have become bargain-hunters in these coronavirus times, and with the market still well below its peak, there certainly are plenty of low-priced stocks for them to choose from. Indeed, a vast host of companies are now trading in the single digits. But -- spoiler alert -- most of them aren't bargains: They're trading as low as they are for good reasons.
However, some may not stay out of favor for long. I decided to scour the exchanges for stocks trading at $10 or less, but also with an eye for investments that could hold up better than most as the world adjusts to a new normal.
Mattel (MAT -1.04%), Sonos (SONO 0.00%), Upwork (UPWK 4.06%), 3D Systems (DDD 0.16%), and DouYu (DOYU 9.20%) all begin Monday trading below $10. Here's why I think they are well-positioned to beat the market over the long term.
There is a lot not to like about Mattel. The toy-making giant has rattled off six consecutive years of revenue declines. The bankruptcy of Toys R Us didn't help it, and rejecting rival Hasbro's buyout proposal three years was a colossal mistake. However, these are also the reasons why its shares can now be had for a bit above $9, after hitting a 28-year low last month.
We're stuck at home, and many of us are being careful about our spending in these financially challenging times. However, if there's one thing you're probably not cutting back on, it's games for your kids, grandkids, nieces and nephews. Toys are helping the youngest generation get through the extended "stay-at-home" mandates, and people of all ages are back to playing board games again. Mattel still has its challenges, but if it can possibly turn its revenue trend around, this is the sort of climate it could do so in -- and analysts do expect to see that its revenue finally inched higher during the quarter that just ended.
We're spending a lot more time at home now, and that means that any extra money we do spend will likely be to enhance our personal environments. Sonos is the pioneer in wireless home audio systems, and a favorite of audiophiles for its speaker systems that provide rich sounds custom-tailored to the acoustics of the rooms they are in.
Sonos was doing fine prior to the COVID-19 crisis. The stock hit a 52-week high in early February after the company posted quarterly revenue and net income that rose 13% and 15%, respectively. The stock has fallen more than 40% into the single digits on recessionary concerns, but give that this company that has managed to string together 14 consecutive years of revenue growth, you have to like its chances of continuing to grow its business at a time when services and products that enhance people's ability to enjoy themselves at home are more valuable than ever.
Running a leading online marketplace for freelancers and contractors seems to be a business model well-suited for the new normal. Folks are working from home, full-time staffers are getting furloughed, and people with more time to spare than they expected during this downturn are turning to one-off gig-economy jobs to pay the bills.
Upwork is growing at a decent if not spectacular pace. Revenue rose 19% in its latest quarter, and guidance calls for a 13% to 15% top-line gain in 2020. The business model works, yet it remains one of the more obvious coronavirus plays to continue trading in the single digits.
A few years ago, people thought 3-D printers were soon going to be all the rage, but the push to take them mainstream fell flat. Revenue for leading printer maker 3D Systems fell 9% last year, and you have to go all the way back to 2014 to find the last time that the pioneer in this niche posted double-digit-percentage top-line growth.
The hype may have fallen short of the reality, but 3-D printing is making headlines during the coronavirus crisis as people and companies in possession of the high-tech machines are putting them to work creating face shields, hands-free door handles, oxygen valves, and even quarantine rooms.
Analysts forecast that 3D Systems' will return to growth later this year, and get back to profitability in 2021. Now that the turnaround speed and adaptability of 3-D printing is being used to help tackle the pandemic, the revolutionary technology is finally coming into its own.
The one Chinese stock on this list is a leading player in the streaming of online gaming events. The market for esports was already booming before the pandemic, and now many more folks stuck at home are discovering the pleasures of watching top-notch video game players, if not sharing their own actual gaming footage.
The company often referred to as the "Twitch of China" is growing at a rapid pace. Revenue soared 78% in its fourth quarter, which it reported on last month, outpacing the 69% to 75% growth it was targeting in late November. It posted a much larger than expected profit, when a year ago it was operating at a deficit. There are now 165.8 million monthly active users on its platform, a mere 8% more than at this time last year -- but the number of paying users has soared 71% over that timespan.
These are scary times, and even many of these companies will feel the pinch of the coronavirus crisis. However, don't be surprised if some --or even all -- of their share prices rebound back into the double digits as 2020 plays out.