It's been more than six years since I started an annual 10 Under $10 series to single out promising stocks trading in the single digits. Despite the risks -- which will obviously be substantial when you're fishing in these low-priced waters -- it's become a popular topic with investors. A rival service even launched a newsletter around the concept.
In an attempt to bring it back home, I'm committed to turning this annual series into a monthly one -- starting today. Every third Monday of the month, stay close to Fool.com, where I will discuss a few attractive investing opportunities that just happen to be trading for less than a Hamilton.
Obviously you're doing your portfolio a major disservice if you don't do your own due diligence in pursuing any of these stocks. With that disclaimer out of the way, let's dig into five stocks that begin the new trading week for less than $10 apiece.
You don't find too many $20 billion companies trading for the price of a fast food value meal, but that's what Sun and its 3.6 billion shares outstanding will fetch you. The popular provider of servers for the tech industry and the creator of the Java Web language -- hence the new ticker symbol -- is back, hot on the heels of posting three consecutive profitable quarters.
Sun's on a roll. Analysts expect the company to earn $0.22 a share this fiscal year and $0.33 per share next year. Paying just 17 times for a booming tech giant that is growing its bottom line at a 50% clip? Literally and figuratively, Sun is a star.
Yes, the company will be asking its investors to approve a 1-for-4 reverse stock split in two months. This isn't me angling for a cheap win, as obviously I will adjust returns for splits.
Sirius Satellite Radio
The fast-growing satellite radio provider also has Sun's curse of packing on billions of outstanding shares. Unfortunately, Sirius isn't profitable like Sun, but it's not cheap to launch a satellite radio service and pay up to acquire long-term subscribers.
However, Sirius is in a win-win situation at the moment. If its planned merger with rival XM
If that light turns out to be an oncoming train, Sirius will survive the derailment. It is growing faster than XM and is tantalizing shareowners with the potential of backseat video as an incremental moneymaker to its popular digital radio subscription service.
Protecting computer networks is vital in these hacker-rich times, and Secure's TrustedSource enterprise solutions are clearly in demand. Revenue soared 65% this past quarter on a non-GAAP basis.
Secure Computing is consistently in the black. It has also trounced analysts' bottom-line expectations in each of the last three quarters. That's a refreshing trend, since the company is already trading at a reasonable 20 times next year's forecast of $0.46 per share in earnings. If it stays true to its path of heady growth and target obliteration, just imagine how cheap the shares will seem in retrospect.
Vanity has been Candela's downfall. The maker of aesthetic lasers has seen smaller, faster-growing players nibble away at its market share. Maybe it spent too much time admiring itself in the mirror to see the competition nipping at its heels, but Candela's fall into the single digits also gives us a chance at observing the company as a turnaround situation.
Hedge fund activists, new acquisitions, and new applications are just some of the reasons to get hot for Candela again. Even if next fiscal year's Wall Street net income estimate of $0.61 proves generous -- and that's likely, given the time it will take for Candela to put all of the puzzle pieces together -- this is a compelling turnaround play in a world where beauty is both skin and pocketbook deep.
I was a fan of MIVA during its more prolific run as FindWhat.com. Like most second-tier paid search players, MIVA is being ignored by investors these days. However, even on the way down, MIVA was making acquisitions that now give it a wider geographical net and a more diversified line of businesses.
Perhaps the best reason to get excited about MIVA, though, is that it swallowed down a thick slice of humble pie and teamed up with Google
You don't see it yet. MIVA hasn't turned a quarterly profit in nearly two years. Even bullish followers don't expect a profit until the end of next year. If the humble pie is tasty enough, MIVA will get there sooner or go for the ultimate gulp by cashing out at a slight premium.
Five for the road
These aren't perfect stocks. Just three of them are currently profitable. Still, you're expected to pack your own cloth and polish when you're mining for diamonds in the rough. It's not for everyone, but the payoff can be spectacular when you hit one out.
Finding great stocks early is a risky -- yet highly rewarding -- way to beat the market. It's at the heart of the Rule Breakers newsletter, a service that you can check out for free this month with a 30-day trial subscription. There are seven active recommendations in the growth stock research service trading for less than $10 at the moment. That includes Secure Computing. Check those out, and I'll be back with more next month.
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Secure Computing is a Motley Fool Rule Breakers recommendation. Yes, a 30-day free subscription offer will keep you going until next month's installment.
Longtime Fool contributor Rick Munarriz wonders how many people know that Alexander Hamilton is the one on the 10-dollar bill. He does not own shares in any of the stocks in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.