Some of the greatest opportunities can be found in beaten down, ignored stocks under $5.
Especially those with solid long-term growth and strong fundamentals.
- Digital Turbine (APPS) ran from about $1.20 to a high of $102.56 for 8,447%.
- Harmonic (HLIT) ran from $4.30 to a high of $12.22
- Marathon Oil (MRO) ran from a low of $3.64 to $25.58
While we often hear that sub-$5 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 Digital Turbine.
In fact, here are ten hot opportunities trading under $5 we believe could pop with patience.
Opportunity No. 1 – B2Gold Corp. (BTG)
Canada-based B2Gold have declined over the past year, even as gold prices have risen to new all-time highs. That’s a trend that doesn’t look likely to last, with shares making up for lost ground.
BTG operates as a gold producer with three operating mines in Mali, the Philippines, and Namibia. B2G has grown revenues to $1.9 billion in 2023, up from $1.8 billion in 2022.
2022 saw B2Gold mine 1,027,874 ounces in total, the company’s first year of production over 1 million. In 2023, that inched higher to 1,061,060 ounces. And that trend looks on track to continue as gold prices soar higher, which should mean significantly higher revenues, and earnings for shareholders
Meanwhile, B2Gold continued keeping their costs in line, with operating costs of $660 per ounce of gold produced. That allowed B2Gold to earn a profit, one that can likely continue.
B2Gold isn’t stingy with its profits. They pay a 5.8% dividend at today’s prices, and shares appear undervalued relative to their costs, their operational growth, and the potential for more gold price appreciation in the coming years.
Opportunity No. 2 – Planet Labs (PL)
We live in a world of data. Companies, governments, and individuals have soaring data needs. One of those forms of data is satellite data.
Weather data, for instance, can tell a local government about the strength of a potential storm. Or offer a hedge fund a chance to position themselves against a big price change in an agricultural commodity.
Planet Labs is one of the few publicly-traded companies offering satellite data. They sell this data as a subscription service, which creates a lucrative recurring revenue business model.
While the past few years saw an explosion of interest in the satellite space, Planet Labs raised enough capital when they went public to avoid having to raise capital when interest rates are high and interest in startup companies has subsided.
This sub-$5 stock can see some big moves higher as they grow their satellite coverage and add additional features, which can be used to create bigger streams of future income.
Opportunity No. 3 – Tellurian Inc. (TELL)
Tellurian is involved in the natural gas business worldwide.
The company is developing a portfolio of natural gas production, liquefied natural gas (LNG) marketing, and infrastructure assets that includes an approximately 27.6 million tons per annum LNG export facility and an associated pipeline.
It owns interests in 11,060 net acres of natural gas assets and 78 producing wells located in the Haynesville Shale trend of northern Louisiana.
President and CEO Octávio Simões noted, “The global economy is in the early stages of an energy super cycle driven by strong demand for natural gas and several years of underinvestment in energy infrastructure. Tellurian is optimally positioned with fully executed market-based LNG SPAs and a permitted project.”
Shell recently said global LNG demand is expected to cross 700 million mt/year by 2040, a 90% increase in demand. That makes TELL a potential big winner here, as it has the ability to grow with that trend, and could even get bought out by a bigger player in the wider energy industry.
Opportunity No. 4 – VinFast Auto (VFS)
For the time being, investors have become cautious when it comes to electric vehicles. However, there is a high-growth segment of the market that’s booming globally. That’s in the electric motorbike and scooter market.
Vietnam-based VinFast Auto, a major manufacturer of these products, is growing revenues at triple-digit levels. In many Asian markets, an electric-scooter or e-bike makes more sense to own than a full car. VinFast also makes low-cost EVs for that model too.
Unsurprisingly, analysts predict that shares have significant upside ahead. Plus, in May 2024, the company struck a deal with Sony to provide streaming services in its vehicles.
That could create a new market, in addition to additional partnership and revenue opportunities that make for a low-cost global leader in the EV space.
Opportunity No. 5 – Bit Digital (BTBT)
Bit Digital operates as a cryptocurrency miner, focusing on bitcoin. They also offer digital asset staking and treasury management services.
There are several publicly-traded ways to play the growth of cryptocurrencies. These companies tend to move based on the price of bitcoin, and to a lesser extent other cryptocurrencies.
In April 2024, bitcoin underwent its fourth halving. That’s the event that cuts the new supply of bitcoin mined in half. Historically, this drop in new supply has led to a sharp adjustment higher in bitcoin’s prices in the year and a half following the halving.
The move is more than enough to offset the reduced reward for mining bitcoin, which means that bitcoin miners like Bit Digital will likely soar higher in the coming months.
Plus, mining fees can be variable based on network demand. Mining companies can earn significant premiums for meeting that demand on top of their mining operations.
Opportunity No. 6 – Century Casinos (CNTY)
When the economy is expanding, consumers feel good. That leads to higher consumer spending. That includes goods, but can also include services such as vacations and other entertainments.
The casino industry tends to fare well during times of economic expansion. And Century Casinos is an off-the-radar player operating several facilities around the world. That includes casinos, lodging, restaurants, and off-track betting facilities.
Century is seeing revenues growing at a 25% clip year-over-year, which could create the cash follow for further expansion opportunities.
Currently, shares trade at a discount to their book value, and at a big discount to their price-to-sales. That means Century Casinos offers growth at a reasonable value, and shares can see further upside as that growth unfolds or as the market is willing to pay more for its assets – or both.
Opportunity No. 7 – New York Community Bancorp (NYCB)
The United States saw the second, third, and fourth largest bank failures in its history in 2023. New York Community Bancorp teetered on the brink of becoming the next domino to fall. But then, investors stepped in to shore up capital.
As a result, the bank’s shares are down, but certainly not out. NYCB trades at one third of its book value, a steep discount to the value of its loans. It’s a far deeper drop compared to other regional banks, which haven’t had investors step in with extra capital.
While market fears hit the banks hard, NYCB only saw revenues drop by less than 10% in the past year. That’s far less than the drop that occurred in the banks that failed in 2022.
And while NYCB reduced its dividend to maintain capital, shares still pay a 1.2% dividend. That dividend could increase as bank fears subside and as revenues and earnings turn around.
Opportunity No. 8 – MultiPlan Corporation (MPLN)
With a market cap of under $450 million, MPLN is a small player solving a big problem. It provides data analytics and technology-enabled cost management, payment, and revenue integrity solutions to the healthcare industry in the U.S.
The company is still in its early stages, and isn’t turning a profit. But it has the ability to tap into the healthcare space, nearly 20 percent of U.S. GDP, and profit from the need to upgrade products and services in that space into the 21st century.
Operationally, shares may struggle for a bit, as implementing new ideas in the heavily regulated healthcare space can take time. But if they can grab a tiny fraction of the tech needs for that market, this could become a major tech service company in the years ahead.
Opportunity No. 9 – Mizuho Financial Group (MFG)
Sometimes, a low share price masks a large cap company.
With a market cap of $50 billion and a dividend yield of 3.2%, MFG engages in banking, trust, securities, and other businesses related to financial services in Japan, the Americas, Europe, Asia/Oceania, and internationally.
The financial services company looks like a global value play, with shares going for about 11 times forward earnings. Plus, shares trade at a 20% discount to their book value, which suggests that this is another play that has upside for patient investors today.
Investors looking for an inexpensive way to get some international exposure can find it with MFG – and be well paid to wait for financial assets to make new highs in the years ahead.
Opportunity No. 10 – W&T Offshore (WTI)
As the name implies, W&T Offshore looks for oil and gas exploration opportunities, focused on the lucrative Gulf of Mexico area.
Developing and moving offshore energy resources can be more expensive than land-based opportunities. So it’s no surprise that a lagging energy market in the past year has caused shares to underperform too.
However, with the stock trading at 2 times earnings, the market may be undervaluing shares substantially here. Especially if energy prices break out of their sideways trend and start to trend higher. Until then, shares pay a 1.7% dividend.
This could be a big winner for a move higher in energy stocks in the months and years ahead. It’s also possible that a big energy find could lead to a buyout from a larger energy company down the line.