At Money Morning, we don’t consider a stock “cheap” simply because it trades under $10.
But with the Dow and S&P 500 sitting near record levels, it’s very difficult to find value and significant upside.
Ten years into the longest bull market on record, there are still a lot of different low-priced stocks.
So, determining the best stocks to buy under $10 is very difficult without a proven system to capture company growth, stock value, and investment momentum…
That’s why we use the Money Morning Stock VQScore™ system.
This proprietary model tracks more than 1,500 profitable stocks in the United States and assigns them a score from 1 to 4.
The higher the VQScore, the more likely that the stock is poised for a breakout – in many cases by more than 100% in a year or less.
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Today, we’re breaking down the top three stocks under $10 to buy based on their VQScore.
One could jump as much as 138%.
Stocks to Buy Under $10, No. 3
Ryerson Holding Corp. (NYSE: RYI) is our first stock under $10 to buy.
This company is a metal processor and distributor that sells roughly 65,000 types of stainless steel, aluminum, carbon, and alloys.
The Chicago-based firm generates roughly 88% of its revenue in the United States, which makes it highly immune from the ongoing geopolitical trade dispute with China.
The other 12% of its revenue comes from Canada, China, and Mexico.
With the United States poised to sign a new trade deal with Canada and Mexico, and U.S. manufacturing levels continuing to remain healthy – the stock is poised for a breakout.
Ryerson currently trades for $8.29 per share.
With a strong VQScore of 4.75, RYI stock has upside of $10 per share.
That figure represents an upside of 20% from current levels.
Stocks to Buy Under $10, No. 2
Newpark Resources Inc. (NYSE: NR) is our second best stock under $10 to buy.
The company produces and services major players in the oil and gas production industry around the world. It also caters to major firms in the electrical transmission, pipeline, solar, petrochemical, and construction industries.
Shares of Newpark struggled over the last few months largely due to weaker sales in its Fluids Systems business. On the global market, lower demand hurt the international markets.
As a result, the firm poached an executive from leading oilfield service provider Schlumberger Ltd. (NYSE: SLB) to run the Fluid Systems business earlier this month.
Now, the firm expects to receive several new contracts, which will jolt its bottom line and operating margins.
Newpark just extended a major project with oil major Eni SpA (NYSE: E). It also expects bigger results from its work in the Gulf of Mexico and Kuwait.
Compared to industry rivals, Newpark stock is cheap. The stock trades at a price to tangible book value of 1.7, which is well below the industry average of 6.28.
NR also has a high VQScore of 4.75. And it currently trades for $7.20 per share.
Based on the likelihood of Newpark’s imminent breakout, we see the upside at $12 per share.
That represents a possible gain of more than 66% from current levels.
Stocks to Buy Under $10, No. 1
Mammoth Energy Services Inc. (NASDAQ: TUSK) is our top stock under $10 to buy now.
This is an oilfield service company that taps into the development of North American onshore unconventional oil and natural gas reserves.
While the energy industry is successful, its other lines of business are under pressure…
The stock has taken a beating over the last two months due to a probe into one of the firm’s subsidiaries in Puerto Rico.
The FBI and the Department of Justice have investigated how the firm’s subsidiary, Cobra Acquisitions, was able to dominate relief efforts from the hurricane that badly damaged the Commonwealth’s infrastructure.
The probe turned into a criminal investigation – something that is never good news for a company in the short term. The company had minimal experience in disaster relief before receiving several lucrative contracts in Puerto Rico.
Investors sold off TUSK stock aggressively as the probe continued. Shares have plunged from $18 per share in April to today’s $6.30 level.
A rebound is in order, as the VQScore system has assigned TUSK stock with a 4.75 rating.
It is said that if you want to make money, “buy on the sound of cannons and sell on the sound of trumpets.”
TUSK is facing short-term pressure from this suit. However, it presents an excellent opportunity to buy low.
The stock currently trades at just $6.30 per share. But it has serious upside.
Our price target for TUSK is $15 per share.
This represents a possible gain of 138%.
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