Do you know you can invest in stocks for as little as $10? These are called penny stocks. The problem with these stocks is they lack liquidity. So if you want to sell the stocks, your trade may not get executed quickly. But here I bring to you three high-volume Canadian stocks you can buy for just $10.5.
Hive stock
Hive Blockchain Technologies (TSXV:HIVE) stock is trading at $2.81 after falling 58% from its all-time high. It earns almost all its revenue from mining Bitcoin and Ethereum and selling them in the market for profit. It also earns revenue by hosting computing capacity to miners and by validating transactions on the blockchain.
Hence, Hive stock is influenced by BTC and ETH prices. There are bull and bears around crypto. Every time crypto starts gaining momentum, regulators crackdown on the digital currency and ban its mining and trading to control money laundering. But that is a process every new revolution has to undergo.
What is interesting is the BTC momentum is gradually gaining acceptance. Not only the BTC bulls but also the top brass are coming to accept BTC.
You may argue that the 2020-2021 BTC bubble has burst, but BTC value has surged significantly from the April 2018 bubble burst. Even Hive’s stock price has surged 77% from its April 2018 burst. This is the right time to buy the stock. It will keep falling until China’s regulatory crackdown eases.
But this stock will surge another 800-1,000% when the next crypto wave comes. What makes me so sure? In every crypto wave, BTC will take the centre stage because its supply is limited.
Bombardier stock
Hive is a stock to hold for the long term, but I can’t say the same about Bombardier (TSX: BBD.B). The business jet maker has surged 170% year-to-date to $1.27 on the back of a recovery rally. For those who don’t know the history of Bombardier, its downfall began in 2013 after a product failure. Its products are so expensive that there is no room for error.
One failure pushed Bombardier into multi-year losses and rising debt. Even a bailout and sale of its passenger plane and train business couldn’t bring the company back to profits. The company has downsized to a business jet maker and is seeing the return of demand as the pandemic-induced travel restrictions ease.
A 170% rally is too quick as the company is still years from profit. However, the stock is garnering increasing short interest in the derivatives market. I have a hunch that it could be a perfect prey for Redditors’ short squeeze game. If my hunch is correct, you could see the stock double in a week or two.
If not, you can wait and watch if the management succeeds in getting the company out of the debt trap this time. However, I have little hope for that unless the board makes management changes.
Transat A.T.
While Bombardier has already climbed the recovery wall, Transat A.T. (TSX: TRZ) has just started climbing, trading at $6.4. The tour operator was at risk of near bankruptcy after its acquisition by Air Canada met a dead-end in early April because of regulatory concerns. Transat stock dipped 22% in 45 days.
Transat worries eased after the Canadian government approved a $700 million bailout package that was way more than $500 million needed to avert bankruptcy. The new funding and the easing of travel restrictions have revived hope for the tour operator sending the stock up 48% from its May low. While analysts are bearish on the stock because of its losses, I am optimistic.
Many U.S. airlines are seeing the return of air travel demand to the pre-pandemic level, and most of this demand is from leisure travellers. There is pent-up demand for holiday travel, and Transat dominates most holiday destination routes between Canada and Europe. AC, therefore, wanted to buy Transat even when the former was burning cash. Transat stock could see a recovery rally in the second half.
