By itself, the price of a stock is rarely reason enough to select or reject a stock until it’s too low or too high. Penny stocks are usually considered risky, while stocks with mid-three-digit to four-digit price tags are generally not viable picks for most investors working with limited capital, unless they gain exposure through fractional stocks.
Nevertheless, it is a factor that may influence your investment decision, and if you have a threshold in mind, say $10, and you are looking for compelling picks that are trending below this mark, you may consider the following three stocks.
An iron ore company
Gold is usually the first thing that comes to the mind of most investors when they think of metal and mining stocks, but iron ore stocks like the Australian Champion Iron (TSX:CIA) can be equally, if not more attractive, picks, at least for the long term.
The company is headquartered in Australia, which gives it better access to major iron importers (apart from China) like Japan, Taiwan, and South Korea. However, the company operates almost exclusively in Canada, where all three of its flagship projects are.
The stock is currently trading at just over $7.1 per share, which represents an over 500% appreciation in the last five years. The valuation is quite reasonable considering this compelling growth. It’s also financially healthy, with a relatively small debt and a decent-sized cash pile. It also pays dividends, and the yield is currently 3.3%.
A fuel cell company
One of the first things you should know about Ballard Power Systems (TSX:BLDP) is that the stock is currently in a long-term slump and has fallen about 90% from its 2021 peak, which is quite a dip even if we take into account the fact that the stock hit that peak riding the post-pandemic bull market.
The second thing you should consider is that the fuel cell technology that Ballard Power Systems is built around is an alternative to conventional electric vehicles (EVs) and relies upon hydrogen, which is still costly and difficult to extract and store.
However, that’s also its chief selling point. As hydrogen supply chains mature, fuel cells and zero-emission vehicles relying on fuel cells may prove to be much more practical than conventional EVs. Even though the revenues of the company are pretty low, they are improving at a decent pace.
The company carries almost no debt and has a significant cash pile, making it financially healthy. It’s currently trading at $4.5 per share.
A power-generation and utility stock
After a decade of excellent performance, Algonquin Power & Utilities (TSX:AQN) slumped hard after their financial problems became too obvious, and the company had to slash its payouts.
The stock currently trades at a 60% discount from its pre-pandemic peak and carries a significant amount of debt. But it’s still one of the most promising stocks trading below $10 (current price: $8.5 per share) thanks to its impressive portfolio.
It has regulated utility assets worth over $12 billion and over 1.2 million electric, natural gas, and water utility customers in North America. The renewable energy segment contains 47 facilities with a gross generation capacity of about 2.7 gigawatts.
The stock may experience a recovery going forward, which may result in significant capital appreciation. Till then, its 6.7% yield is a compelling enough reason to consider this stock.
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Foolish takeaway
Two of the three stocks are heavily discounted right now, and the corrections that have plunged them into their current depths are rooted in tangible reasons, not just poor market sentiment. However, they are also solid businesses that may have a bright future ahead, and buying now, at their discounted state, may pay amazingly in the long run.
