Hi there, Fools. I’m back to highlight three stocks under $10. While low-priced stocks carry plenty of risks, they can be a source of ideas when looking for:
- small, obscure, and underfollowed companies
- dirt-cheap bargains
- intriguing turnaround situations
If you have big dreams of turning an average $27K TFSA into $1,000,000 in 20 years, you’ll need explosive returns to do it. Although low-priced stocks are on the volatile side, the upside return potential might be well worth the risk.
Let’s get to it.
On the same page
Leading off our list is digital marketing company Yellow Pages (TSX: Y), which is up about 40% so far in 2019 and currently trades at a price of $8.65 per share.
The stock has suffered in recent years on slowing sales and debt concerns, but management’s recent restructuring efforts are clearly paying off. In the most recent quarter, earnings per share of $0.51 topped estimates by $0.10 as revenue clocked in at an expectation-topping $107 million.
Moreover, Yellow Pages generated $28.6 million in operating cash flow on an adjusted operating margin of 40%.
“In our core, YP segment, today we report for the second quarter in a row an improved year-on-year rate of revenue change,” said CEO David Eckert. “And we are seeing further strengthening in our ‘bookings,’ which are a leading indicator of future reported revenue.”
Yellow Pages trades at a cheapish forward price-to-earnings ratio of 6.2.
True potential
Next up, we have commercial real estate company True North Commercial REIT (TSX: TNT.UN), whose shares are up 40% over the past year and trade at $7.15 per share.
True North’s price performance is nicely supported by credit-rated tenants, long-term leases, and an impressive portfolio (46 properties consisting of about 3.7 million square feet). In the most recent quarter, net operating income and revenue both jumped significantly.
“In the last 18 months, the REIT’s portfolio has grown from 39 properties totaling 3.0 million square feet to 46 properties totaling 3.7 million square feet,” wrote the company. “As a result, Q2 2019 revenue increased 28% to $25.5 million and NOI increased 27% to $15.2 million compared to Q2 2018.”
True North shares currently offer an attractive dividend yield of 8.3%.
Total package
Rounding out our list is oilfield services provider Total Energy Services (TSX: TOT), which is down 39% so far in 2019 and currently trades at a lowly price of $6 per share.
The stock has been pummeled on weak energy prices and balance sheet concerns, but now might be an opportune time to jump in.
Despite a poor operating environment, Total continues to generate significant free cash flow. Over the first half of 2019, in fact, the company reduced long-term debt by $16.5 million and returned $8.8 million to shareholders in the form of dividends and share buybacks.
Furthermore, the company’s liquidity position remains strong with about $74 million of working capital.
Total currently offers a solid dividend yield of 4.0%.
The bottom line
There you have it, Fools: three amazing stocks under $10 worth checking out.
As always, don’t see them as formal recommendations. Instead, view them as a starting point for more research. Low-priced stocks are particularly fickle beasts, so plenty of homework is still required.
Fool on.
