In this article, we will take a look at some of the best small-cap industrial stocks under $10 that are currently offering attractive upside to investors.
On June 12, CNBC reported that U.S. equities advanced as easing geopolitical tensions in the Middle East and a rebound in semiconductor stocks lifted investor sentiment. The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all closed higher after President Donald Trump said planned U.S. strikes on Iran had been canceled and that a deal with the country was nearing completion. Oil prices fell after the news, despite earlier gains driven by fears of disruptions to the energy market.
Meanwhile, economic data showed producer prices rose 1.1% in May, above expectations, while core inflation remained below forecasts. Capital spending tied to artificial intelligence also remained in focus, with Oracle announcing plans to raise an additional $20 billion in equity and debt to fund its AI buildout.
Globalt Investments’ senior portfolio manager, Thomas Martin, reflected on spiked-up oil prices and indicated that in the current environment, such an inflationary trend has not affected other areas. This offers fundamental strength to the broader economy. He stated:
“Markets don’t seem to be fazed by the Middle East conflict. Inflation reports that we’ve gotten don’t show that the higher price of oil is really pushing through to other areas, so the underpinnings of the economy are still fairly strong. That’s all kind of status quo-ish for the markets.”
With that background, let’s explore our 15 Most Promising Small-Cap Industrial Stocks Under $10.
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Our Methodology
To identify relevant stocks for this article, we screened U.S.-listed industrial companies with market capitalizations between $300 million and $2 billion. Also, we only shortlisted stocks with a share price below $10 and at least 20% upside potential, according to consensus, as of the June 12 close. Finally, we selected 15 stocks with the highest upside and ranked them in ascending order.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
15. Hyliion Holdings Corp. (NYSE:HYLN)
Some of the recent commercial collaborations, backed by bullish analyst ratings, make Hyliion Holdings Corp. (NYSE:HYLN) one of the 15 most promising small-cap industrial stocks under $10. On June 10, Sean Milligan from Needham assigned a Buy rating to Hyliion Holdings Corp. (NYSE:HYLN) while setting a $9 price target. The analyst expects the company to transition from the development phase to the commercialization of its Karno power module over the next 12 months.
According to Milligan, Karno is a linear generator platform that would achieve best-in-class fuel flexibility, emissions, noise levels, siting requirements, electrical efficiency, and maintenance cycle characteristics. The operational capabilities have the potential to position the platform as a disruptor within bring-your-own power end markets.
Back on May 19, Hyliion Holdings Corp. (NYSE:HYLN) announced a collaboration with the U.S. Navy’s Office of Naval Research and the Defense Advanced Research Projects Agency. Under this joint initiative, the military has designated the USX-1 Defiant to serve as the primary testing platform for the company’s KARNO power generation systems.
The preliminary sea trials are receiving financial backing through an Office of Naval Research development program, which is specifically designed to evaluate and integrate KARNO Cores to supply electrical power aboard naval ships.
Hyliion Holdings Corp. (NYSE:HYLN) builds power generators that carry mobile and stationary applications. Its core power-generating offering is KARNO Power Module, which is entirely fuel-agnostic. It utilizes conventional fuel sources such as waste fuels, diesel, zero-carbon fuels, natural gas, and ammonia for power generation.
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