A little money can go a long way these days. Stocks with low price points are historically speculative, but not every stock trading in the single digits is a doomed penny stock.
SiriusXM Radio (SIRI 0.00%), Latch (LTCH 1.83%), and Velo3D (VLD -2.68%), are three low-priced stocks with high ceilings. Let's see why they are the top stocks trading for less than $10 right now.
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Sirius XM Radio
Satellite radio took a hit in 2020 when we stopped driving. One can argue that 2022 is equally as challenging because rising gas prices make driving around -- the way that folks primarily enjoy Sirius XM -- more expensive. The good news is that the satellite radio monopoly finds a way to keep growing.
Despite the ups and downs of the automotive industry and fears that smartphones and connected cars will spell the end of premium radio, Sirius XM is a survivor. It began this year with a record 32 million accounts. Sirius XM has grown its audience of self-pay subscribers by at least a million in 10 of the past 11 years. Guidance calls for just half a million net additions in 2022, but it has historically underestimated its ultimate potential.
Sirius XM is a money machine. It generated $1.83 billion in free cash flow last year, and it's returning that money to its shareholders through buybacks and distributions. The stock yields a mere 1.4%, but last month management declared a special payout of $0.25 a share. A quarter adds up for a stock trading for a little more than $6, translating into an additional yield of 4%.
Latch
Apartments may not seem like a hotbed of tech growth, but you may change your mind as you dig deeper into Latch. This is the company behind LatchOS, a cloud-based platform that provides keyless entry to apartments and so much more.
Having a way to remotely open an apartment dwelling has its benefits. Landlords can show vacant apartments without being there, and they can easily plug in a new code when a unit switches hands instead of having to rekey a front door. Landlords also charge tenants a premium for Latch, as it makes their lives easier, too. Folks can let in sitters, relatives, cleaning services, or package deliveries when they're not home. LatchOS also works with intercom systems and smart-home hubs.
Latch is small right now, but 10% of all new apartment construction is being built with Latch in place. Revenue rose 94% to $14.5 million in its latest quarter, and was up 129% to $41.4 million for all of 2021. Bookings are growing even faster, up 118% last year. There are a lot of special purpose acquisition companies (or SPACs) that won't bounce back from the market's chilly reception. Latch has fallen out of favor, but it checks off all of the boxes of a disruptive growth stock. It will get another chance for a Wall Street homecoming.
Velo3D
A recent entry in the elephant's graveyard of buzzwords is 3D printing. Investors aren't very excited about the prospects of additive manufacturing, but in reality its future is brighter than ever. Velo3D isn't a household name in this market, but that's because it has a very specific niche.
Velo3D's Sapphire platform is a 3D metal-printing solution that helps companies create specialized parts. It serves the aerospace, aviation, industrial power, and oil & gas sectors that have deep lists of mission-critical parts. Velo3D is small, having generated $27.4 million in revenue last year.
Things are about to pick up in a big way. Velo3D finally started shipping Sapphire XC in its last quarter, an upgraded platform that makes parts for 75% less -- with a five-fold pop in productivity -- than the original system. Demand is strong, and Velo3D's guidance of $89 million in revenue this year means that revenue will more than triple in 2022. Even if 3D printing stocks aren't cool, Velo3D is cool enough for your low-priced stock portfolio.
