Investors with a small amount of funds to allocate to equities often look for stocks that have a relatively lower price. As an example, a diversified sub-portfolio of stocks under $10 can be created with limited funds.
It’s also obvious that most of these stocks under $10 would be high-risk growth stocks. However, careful selection can help in boosting portfolio returns.
In the bull market, I have seen stocks under $10 double or triple in a matter of days. That’s unlikely right now, though, as broad market sentiments are bearish.
However, there are low-priced stocks that are worth considering for the next 12 months. Over this time, these stocks can potentially double.
Of course, I must add here that macroeconomic conditions remain uncertain. It’s best to be overweight on low-beta stocks, but a small part of the portfolio can be allocated to these small-cap stocks.
Stocks Under $10: Riot Blockchain
It almost seems that thecryptocurrencystory is over. For risk-taking investors, this is the best time to consider exposure to quality coins and crypto stocks.
I believe thatRiot Blockchain(NASDAQ:RIOT) is among the quality names to consider. If sentiments reverse forBitcoin(BTC-USD), the stock can potentially deliver multi-fold returns.
For May 2022, Riot mined 466 Bitcoin at a hash rate capacity of 4.6EH/s. For the same period, Riot also held 6,536 Bitcoin in the balance sheet.
The key point to note is that the company targetsincreasing mining capacity to 12.6 EH/sby January 2023. With capacity almost likely to triple, Riot will be positioned to mine more than 1,000 Bitcoin on a monthly basis.
The growth story will look bullish if Bitcoin is back to $40,000 or $50,000. It’s also worth noting that Riot has a strong balance sheet with cash and digital assets. The company can navigate this period of downturn and EBITDA margin compression.
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