The 7 Most Undervalued Under-$10 Stocks to Buy in July 2024

Stocks to buy

Think it’s too late to find true bargains in this raging bull market? You might be surprised.

In fact, plenty of opportunities in low-priced stocks are waiting to be found.

As of July 2024, more than 2,600 stocks are listed on major U.S. stock exchanges with a share price of $10 or less. Of course, many of these aren’t great investment options. Most penny stocks and low-priced names end up there due to major issues with the underlying businesses.

But, some real diamonds in the rough can be found. Examine seven of the most promising stocks under $10 to buy this summer.

United Microelectronics (UMC)

Source: Ascannio via shutterstock

United Microelectronics (NYSE:UMC) is the world’s fourth-largest semiconductor foundry business by market share. While Taiwan Semiconductor Manufacturing (NYSE:TSM) tends to get all the attention, UMC has built a nice business for itself as well.

In fact, United Microelectronics generates more than $8 billion in annual revenues. While not the industry big dog, it has sufficient operating scale to achieve strong profitability. In fact, UMC stock trades for just 11 times earnings and a mere six times enterprise value to EBITDA. That’s tremendous, considering the lofty valuations for most other semiconductor stocks.

As applications such as artificial intelligence (AI), IoT and connected cars continue to take off, the foundry market should grow substantially. And, United Microelectronics is poised to benefit as companies increasingly look to diversify their supply chains away from TSM. Moreover, UMC stock offers a generous 5.5% dividend yield.

Ambev (ABEV)

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Ambev (NYSE:ABEV) is Brazil’s brewing giant. The company is a subsidiary of Anheuser-Busch InBev (NYSE:BUD), operating for the firm in leading South American markets such as Brazil and Argentina.

Investors have shunned Anheuser-Busch InBev due to its large debtload, political controversies and soft operating results. But Ambev is a totally different situation.

Ambev maintains a net cash balance, a stark contrast to Anheuser-Busch’s debt-driven approach. It has largely avoided the sorts of boycotts that tripped up its corporate parent. Also, the issues hampering U.S. beer consumption, such as marijuana legalization and the rise of GLP-1 weight loss drugs, haven’t impacted beer sales nearly as much in South America.

Ambev shares have fallen 34% over the past 12 months. A slowing Brazilian economy along with dismal sentiment in the alcohol sector are largely to blame. However, these factors have pushed the stock down to just 11 times forward earnings, which is a real steal for a dominant consumer business.

Valley National Bancorp (VLY)

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New Jersey-based Valley National Bancorp (NASDAQ:VLY) is a regional bank that has been in business since 1927.

It’s no secret that the regional banking sector has been under fire over the past year. The failure of Silicon Valley Bancorp and several other firms caused panic around the industry. Regional banks are struggling with the inverted yield curve and compressing net interest margins on their lending.

Additionally, Valley National Bancorp in particular is perceived to be facing significant risk from its commercial real estate market exposure. Nevertheless, bears have been making alarming predictions about commercial real estate for years now and yet most regional banks are reporting fine results at the moment.

VLY stock has retreated 39% year-to-date (YTD). This steep decline has pushed the stock down to less than eight times forward earnings while offering a generous 6.7% dividend yield.

dLocal (DLO)

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dLocal (NASDAQ:DLO) is a Uruguay-based payments processing company focused on the Latin American market.

Like many payments companies, dLocal enjoyed a period of outsized prosperity a few years ago as companies rushed to adopt digital and contactless payments solutions during the pandemic. As growth slowed, however, valuations plummeted.

Specifically, DLO stock is down 35% over the past year, and it’s down more than 80% from its all-time highs. While dLocal was almost certainly overvalued at its prior peak, shares appear to be facing excessive negativity at today’s price.

The company is firmly profitable, with the stock going for less than 20 times forward earnings. Meanwhile, analysts see revenues growing 32% this year and another 30% in 2025. That’s tremendous top-line growth. As a kicker, more than 10% of the stock’s float is currently sold short, setting up explosive upside when sentiment improves.

Rocket Lab USA (RKLB)

Source: T. Schneider / Shutterstock.com

Rocket Lab USA (NASDAQ:RKLB) is involved in the space industry. It offers launch services and space systems solutions for government agencies, defense companies and commercial enterprises.

More specifically, Rocket Lab USA designs, manufactures and services spacecraft, along with providing ancillary services, such as on-orbit management solutions.

Rocket Lab USA was founded in 2006, and it’s hardly been an overnight success. But it’s starting to gain altitude now, with revenues skyrocketing from $62 million in 2021 to $245 million in 2023. Analysts see that figure jumping another 78% to $435 million in 2024.

Despite RKLB’s rapid growth in a dramatically expanding market, short sellers are still targeting the company. A stunning 18.8% of the stock is currently sold short. The bears could face serious pain on this bet, as revenues continue to soar, and analysts see the company reaching profitability in 2026.

iQIYI (IQ)

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iQIYI (NASDAQ:IQ) is a leading Chinese video streaming and gaming platform.

Like almost all Chinese growth and technology stocks, iQIYI is caught in a tailspin. Between weak economic conditions, political risks and a tough regulatory environment, Chinese tech companies are facing a challenging environment.

However, excessive negativity has made IQ stock an intelligent investment for risk-seeking investors today. The company is a major player in its market, generating more than $4 billion a year in annual revenues. And it’s a profit gusher, with the stock trading for less than eight times forward earnings.

The Chinese equity bear market has been going for years now, and there’s no guarantee it will end in the near future. But iQIYI’s financial metrics look great, and the company just delivered another big earnings beat this past quarter. All this makes IQ stock a promising turnaround story once the Chinese economy recovers.

Payoneer Global (PAYO)

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Payoneer Global (NASDAQ:PAYO) is a fintech company that delivers solutions for the payments and payroll management space. The company allows clients to seamlessly pay employees and contractors in a variety of different countries and currencies. It also has associated back-office functions, customer support, card issuance and other ancillary functions.

PAYO has grown its revenues from $318 million in 2018 to $831 million in 2023. It was able to enjoy such rapid growth thanks to recent economic changes. The pandemic, in particular, demonstrated the value of remote and hybrid work models.

Companies increasingly have more spread out workforces, and Payoneer Global can help make these sorts of arrangements more manageable. Freelancers are also looking for more work in response to rising inflation.

Fintech stocks have been out of favor for several years now. Many peers have struggled to regain their momentum since the pandemic-linked e-commerce boom wound down. But Payoneer Global’s more essential workplace management tools make it a long-term winner. It’s already strongly profitable and continues to post double-digit annualized revenue growth, making PAYO stock a great under $10 pick today.

On the date of publication, Ian Bezek held a long position in ABEV stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.

Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek.

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