In theory, the stock price isn't that important. While a stock's price depends (to a degree) on the company's performance, its value depends on both the company's success and the number of shares outstanding. Because of another factor, the stock price of a large and successful company can fall.
There is a certain compulsion to accumulate cheap stocks. First off, it's easy to buy a lot with round numbers if the bank doesn't collapse. Second, there is actual evidence that such stocks tend to outperform their higher-priced counterparts.
So check out these great stocks under $10 to add to your portfolio!
The Series XM Holdings
In our age of mobile internet, it's frankly surprising that this subscription-based, hardware-specific satellite radio business can do well. But it is true! XM Sirius Holdings (NASDAQ: SIRI) it's a good example. Over the past year, the company added about a million new paying members, bringing the total number of subscribers to nearly 30 million.
However, we must acknowledge that growth is slow. As Rick Munrez points out, revenue growth is expected to be 4% through 2020, and not too much. Each year the satellite radio business approaches its full potential in the overall identifiable market. But Sirius XM is working on its plan B, the company acquired Simplecast to improve monetization of its existing podcast business.
But that's what Srius XM's consistency can compensate for. Consumers are not only devoted to commercial free radio, but also to the people who host their favorite shows. Sirius XM also offers access to some special sporting events and programs not otherwise available.
The Nokia
One might think that Nokia (NYSE: NOK) is just a cellphone maker, which is pretty much right (it sold a large chunk of its smartphone division to Microsoft in 2013). For this reason, phone production is the lowest priority for Nokia. The next big thing for the company is 5G -- a technology that investors will soon appreciate.
Its potential may be lower than that of other companies (like Ericsson or Qualcomm), but it also has successes. In June, for example, it announced that China Unicom (NYSE: CHU) had tapped Nokia to provide about a tenth of the technology for 5G networks. At the same time, the company became a leader in creating 1GB wireless broadband speeds in the United States, using the C-band frequency in wireless broadband technology. It was previously not available to mobile network operators or manufacturers. This is significant given that American radio waves have become very narrow.
It may take a while for the company to reach incredible levels, but with shares priced at just $5, it may be worth the wait.
The Power Adapter
Plug Power (NASDAQ: PLUG) is another promising sub-$10 stock. The number of households that are aware of the company increases as income increases.
The reason for this growth is that public interest in what the company is doing is growing. Plug power technology converts hydrogen into electricity making it a backup power system for both and also a viable primary option for power generation. In 2019, the company's sales grew by almost 40%.
But the best thing about investing in Plug Power is how quickly it becomes financially viable. With the current momentum, the company is expected to move towards profit in 2023.
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