Some of the greatest opportunities can be found in beaten down, ignored stocks under $11.
Especially those with solid long-term growth and strong fundamentals.
- Look at Advanced Micro Devices (AMD), for example. At one point, it was left for dead at $8 a share. It’s now up to $106 for a return of 1,225%.
- Fate Therapeutics (FATE) was ignored at $8.50. It’s now up to $67 for 688%.
- Digital Turbine (APPS) ran from about $1.20 to a high of $102.56 for 8,447%.
While we often hear that sub-10 stocks are “there for a reason” and “should be avoided at all costs,” that’s bad advice. Instead, with a little digging, you may just uncover the next Advanced Micro Devices, Fate Therapeutics, or Digital Turbine.
In fact, here are three hot opportunities trading under $10, we believe could pop with patience.
Opportunity No. 1 – Standard Lithium (SLI)
By now, most of you are familiar with the lithium story.
There’s short supply, and massive demand because of the electric vehicle story. Plus, there’s the fact that governments all over the world want millions of EVs on the roads to reduce emissions, and save the world.
As lithium demand pushes aggressively higher, so are stocks like Standard Lithium, a company focused on its 3,140,000 tonne LCE Indicated Resource -150,000-acre joint venture Lanxess Project, located in south Arkansas, as noted by the company. Interesting to note, the company doesn’t mine for lithium by crushing rocks, it extracts lithium from saltwater brine.
With its involvement in the lithium space, its stock popped from 30 cents to $8.20.
While the stock is up big, it could see further upside.
All thanks to its lithium project in southern Arkansas. For one, according to CEO Robert Mintak’s interview with CNBC’s Jim Cramer, its Lanxess Project in Arkansas is well positioned to serve the U.S. EV market, and could help facilitate exports to Europe as well.
Two, the 150,000-acre project is located in the Smackover brine region of Arkansas – which is known to hold some of the richest lithium resources. Even more impressive, Standard Lithium is reportedly the first to develop a lithium project in that region.
Three, according to a 2020 press release from the company, “No new lithium mine has been built in the United States in almost 60 years and the country currently produces less than 2% of global lithium production. Standard Lithium’s south Arkansas lithium project represents the most immediate opportunity to change that.”
Those are major catalysts that could fuel big upside for Standard Lithium near-term.
Opportunity No. 2 – FuelCell Energy Inc. (FCEL)
Beaten down hydrogen stocks like FCEL could see significant upside.
For one, hydrogen could play a major role with green energy.
“Global discussions around the potential for a hydrogen (H2) economy have accelerated in the past 12-months…H2 has been well discussed as one of the major contributing forces in helping decarbonize the world’s economy, in particular given that some industries cannot easily make the battery shift,” according to analysts at UBS, as quoted by CNBC.
Two, Goldman Sachs believes the hydrogen market could be worth up to $11.7 trillion in the next 30 years. Three, some of the major automakers are looking to build hydrogen models, according to Reuters. BMW for example is planning a model, and has built a hydrogen car prototype. Even Volkswagen’s Audi brand says it’s researching hydrogen technology.
There’s a good deal of federal and state support for hydrogen.
All are major catalysts for companies like FuelCell Energy (FCEL), which just reported revenues of $26.8 million, as compared to $18.7 million. The company also posted gross profits of $1.1 million, as compared to gross loss of $(3.1) million.
In addition, the company saw a backlog of $1.30 billion as of July 31, 2021, as compared to $1.33 billion as of July 31, 2020.
The company is also benefiting from California’s Senate Bill 155, which includes a two-year extension of the Fuel Cell Net Energy Metering program, or Fuel Cell NEM.
“Fuel Cell NEM allows businesses to invest their own private capital in clean, firm technology that reduces their energy consumption and lowers their environmental footprint by reducing Scope 1, 2, and 3 emissions, while the State benefits from maintaining and creating new jobs, reducing greenhouse gas emissions, criteria air pollutants and water use without any direct incentives,” said Jason Few, President and Chief Executive Officer, FuelCell Energy.
Opportunity No. 3 –EVgo Inc. (EVGO)
EVGO is a fast charging network for electric vehicles.
With more than 800 fast charging spots, its network services more than 68 metropolitan areas across 35 states and more than 300,000 customer accounts. Plus, according to Tip Ranks, more than 130 million people (39% of population) live within 10 miles of an EVGO charging station.
While it’s been beaten down in recent months to less than $10, don’t count it out just yet.
There’s still plenty of rev left in EVGO’s engine.
For example, in its most recent quarter, the company nearly doubled its deployments quarter over quarter with 104 new charging stations now operational, as noted in an investor deck. It also has 2,067 in its “Active Engineering & Construction Pipeline.” Once those 2,067 stations are up and running, it could provide a massive revenue boost.
Two, by 2040, the company expects for nearly 28% of all U.S. vehicles to be battery electric, which could provide massive growth opportunities, as well. Three, EVGO is guiding for $54 million, with its sights set on $596 million by 2025.
By 2027, EVGO sees revenue as high as $1.289 billion.
EVGO also announced that its customer accounts crossed the 300,000 mark.
“With EV sales increasing rapidly across the US, drivers are looking for charging locations that fit neatly into their lifestyles. EVgo is that brand – and the 300,000 customer account milestone demonstrates it,” said Cathy Zoi, CEO of EVgo, as quoted in a company press release.
Analysts appear to like the stock just as much. In fact, Credit Suisse recently initiated coverage of EVGO with a buy rating and an $11 price target. They believe EVGO is a “market leader,” as noted by MarketWatch.com. All as it continues to benefit from EV adoption and incentives.
That, and it doesn’t hurt that General Motors named EVGO a preferred provider for its Ultium Charge 360 fleet service. All as General Motors gets underway with plans to spend $35 billion on EVs and AVs through 2025.
In short, buckle up. EVGO could accelerate – and fast.
