While investing in the best blue chip stocks to anchor your portfolio is always a good idea, I am always looking to diversify. A good way to do that is to invest in lesser-known but quality stocks under $10.
Lower-priced stocks have the advantage of being affordable so that you can buy more shares with less money. It’s much cheaper to buy 100 shares of a $5 stock than to buy the same number of shares of an equity that cost $100 or more, right?
And these lower-priced stocks still can outperform the market. While the risks are higher, the rewards can be substantial, offering a tempting opportunity for investors willing to take on some level of risk.
I always suggest using the Portfolio Grader to help find the best stocks under $10. In fact, using a stock screening tool is essential in an exercise such as this.
Why? Because there are over 2,100 stocks on the market today are priced at $10 or less. No one can identify all of the best-performing stocks – or those that have the potential to perform – without using a screener like the Portfolio Grader to narrow the field.
The Portfolio Grader evaluates stocks based on various measurements, including earnings performance, growth, analyst sentiment, and momentum. The stocks under $10 on this list all score well enough to get at least a “B” rating in the Portfolio Grader tool.
Faraday Future Intelligent Electric (FFIE)
Faraday Future Intelligent Electric (NASDAQ:FFIE) designs, manufactures and sells electric vehicles and related products. The California company operates in the United States and China.
The company has gotten into some hot water with Nasdaq and its listing requirements because the stock is less than $1 – it has until Aug. 31 to get the stock price up – and for not always promptly filing financial reports.
Those are red flags for sure, so already you know FFIE stock is a speculative play.
Although revenue in 2023 was only $800,000, it was the company’s first year of revenue, as it’s still very much a startup. Faraday delivered its first-ever vehicles in the third quarter of the year.
However, Faraday also has some interesting things in the works, as outlined in its July 20 Investor Day event. Highlights included a look at the All-Ability aiHypercar, its user ecosystem, and the company’s Auto Industry Bridge strategy.
The company raised the idea of launching a second, lower-priced automotive brand. “A second brand could strike in the mass market with volume production, bringing everyone the ‘AI car of the future’ and the ‘AI car of the people’.
We are preparing to launch the Bridge and second brand strategies in a future event where we will share more details and our progress. We are hopeful to set sail together in the blue ocean market with potential partners,” founder YT Jia said.
The company scheduled a July 31 shareholder vote that includes a proposal for a 1-for-40 reverse stock split to maintain its Nasdaq compliance. For now, FFIE stock gets a “B” rating in the Portfolio Grader.
SoundHound AI (SOUN)
SoundHound AI (NASDAQ:SOUN) is an up-and-coming technology company that is using artificial intelligence and machine learning to create products that recognize and respond to verbal prompts.
SoundHound’s platform is used by restaurants to automate food ordering, reducing employee costs. Through its Dynamic Interaction platform, customers can verbally place complicated orders at a kiosk and pay without the intervention of an employee.
Another interesting use of SoundHound’s platform is its employee training. Inexperienced workers can use SoundHound to ask questions about a process and SoundHound’s AI will answer intelligently and walk the employee through the proper steps.
SoundHound also has a product that has a Chat AI product – integrated with ChatGPT – that can manage navigation, advise about the weather or tell stories to bored children in the back seat.
I also like that SoundHound is shoring up its financial position. The company announced that it reached an agreement with lenders to repay $100 million in outstanding debt. Once that’s done, SoundHound will have zero debt and a cash balance of $180 million.
Revenue in the first quarter was $11.6 million, up 73% from a year ago. And with a subscription and booking backlog of $682 million, up 80% from just a year ago, I think SoundHound will start turning a profit soon.
SOUN stock gets a “B” rating in the Portfolio Grader.
Kazia Therapeutics (KZIA)
Kazia Therapeutics (NASDAQ:KZIA) is an Australian oncology company that’s developing therapies for brain, liver and renal cancers.
The company’s lead program is paxalisib, which is currently in Phase 3 trials as a treatment for glioblastoma, which is an aggressive form of brain cancer. Paxalisib is also in Phase 2 trials as a treatment for childhood brain cancers, brain metastases, and non-Hodgkin’s lymphoma.
The stock had massive gains this month when it announced positive results for paxalisib’s glioblastoma trial. The company reported that patients who received paxalisib had a median overall survival period of 14.77 months, compared to 13.84 months for patients who did not receive the drug.
In a prespecified secondary analysis, the survival period for paxalisib patients was 15.54 months compared to 11.89 months for patients who did not take the drug.
Investing in biotech and pharma stocks can be very challenging because there’s a lot of research – and a lot of expense – before a drug can even go to regulators for possible approval. But Kazia’s work appears to be promising, and that’s driving the momentum of KZIA stock right now.
Kazia stock is up 40% over the last month, and gets a “B” rating in the Portfolio Grader.
Koss (KOSS)
Koss (NASDAQ:KOSS) is a manufacturer of headphones and accessories such as earbuds, electrostatic headphones and audio products for health care and education.
The company has been around for more than 60 years and came to renewed prominence in recent years as a popular meme stock. The meme factor makes Koss a volatile stock – shares jumped 90% earlier this month on speculative short-seller interest.
Earnings for the company’s fiscal third quarter (ending March 31) showed weakening performance. Sales of $2.6 million was down from $3.3 million in the same quarter a year ago. Profits of $841,000 were down from $1.3 million on a year-over-year basis.
Koss is purely a meme stock play and should be treated with a lot of caution. If the stock jumps again – and odds are that it will – it would be wise to take profits at the peak.
KOSS stock is up 171% this year and gets a “B” rating in the Portfolio Grader.
VivoPower International (VVPR)
VivoPower International (NASDAQ:VVPR) is an international battery technology and electric vehicle services company headquartered in the U.K. The company also operates in Australia, Canada, the Netherlands, the Philippines, the UAE and the U.S.
The company is preparing for a merger of its subsidiary, Tembo E-LV, with Cactus Acquisition Corp. 1 Limited (NASDAQ:CCTSW), a special purpose acquisition company in preparation for taking Tembo public. Tembo, which is an electric vehicle services company in the Netherlands.
Following the merger, the new Tembo Group expects to be publicly traded on the Nasdaq exchange. The new company would have a valuation of $838 million, with VivoPower shareholders receiving 20% of the company.
Thus, VVPR stock is an interesting bet on EVs with heavy European exposure. VivoPower stock is up 37% this year and gets a “B” rating in the Portfolio Grader.
Soligenix (SNGX)
Soligenix (NASDAQ:SNGX) is a U.S. biopharmaceutical company that is working on a variety of products. It currently has several drug candidates in advanced stages of trials, including a treatment for early-stage cutaneous T-cell lymphoma in Phase 3 testing.
Soligenix has other Phase 2 tests underway for psoriasis, oral mucositis, and pediatric Crohn’s disease.
But it’s the early-stage cutaneous T-cell lymphoma trial that has investors excited. The stock jumped nearly 300% earlier this month – before giving some of those gains back – following a study testing HyBryte as a treatment).
Six patients are enrolled in the yearlong study, with four of them completing at least 12 weeks of treatment. Of those, Soligenix says three patients already achieved treatment success, which is a 50% improvement in their cumulative mCAILS score compared to baseline. The fourth patient also saw improvement, the company said.
While this is a positive development, it’s important to recognize that HyBryte is still a long way from making it to regulatory approval. But as a speculative play, SNGX stock has potential.
The stock is up 48% in the last month and has a “B” rating in the Portfolio Grader.
First Foundation (FFWM)
First Foundation (NYSE:FFWM) is a regional bank that’s headquartered in Dallas, but has offices in California, Florida, Hawaii, Nevada and Texas.
The bank has $13.6 billion in assets as well as $10.1 billion of loans, deposits of $10.6 billion and stockholder equity of $929 million.
It also just completed an investment deal with several investment firms, including Fortress Investment Group, Canyon Partners, Strategic Value Bank Partners and North Reef Capital that injected $228 million into the company. First Foundation issued 11.3 million shares of stock valued at $4.10 each as part of the transaction.
The company is reporting second-quarter earnings on July 25, with analysts expecting flat adjusted earnings per share as well as revenue of $54.48 million. A year ago in the second quarter, FFWM saw $61.1 million in revenue and earnings of 7 cents per share.
Regional banking stocks have been challenging investments for the last few quarters, but FFWM appears to be on an upswing. The stock is up 25% in the last month and gets a “B” rating in the Portfolio Grader.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article. 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) and positions in the securities mentioned in this article.