In this article we discuss the top 5 best stocks under $10 in 2021 that are currently very attractive . If you want to read our comprehensive analysis about these companies, go directly to the 10 Best Stocks Under $10 in 2021.
5. Sumitomo Mitsui Financial Group, Inc. (NASDAQ: SMFG)
Number of Hedge Fund Holders: 10
Sumitomo Mitsui Financial Group, Inc. (NASDAQ: SMFG) offers general banking services and financial services to its customers. It has a range of business segments, including structured finance, trade finance, corporate finance, risk management, consumer loans, asset-backed finance, and securities underwriting. Despite its diverse product portfolio, the stock is modestly priced, closing the latest trading session at $7 per share. Its business segments are high-growth areas, and the combination of a low stock price earns it a spot as one of the top 10 stocks under $10.
Ten hedge funds had a stake in SMFG in Q3 2020, led by Ares Management Corp with slightly over 12 million shares. Ares Management announced a public offering through which it would offer 9.5 million shares. SMFG agreed to participate in the offering by purchasing $250 million worth of shares from Ares.
SMFG is reportedly working on an expansion plan that it will execute through a partnership with a U.S-based global investment bank and an Asian lender. The company is reportedly looking for a partner that will underwrite the sale of bonds and equities in the U.S to leverage the post-pandemic boom. The expansion into the U.S will provide more growth opportunities for the stock, which is why it is one of the top 10 stocks under $10 that have a lot of potential.
4. Lloyds Banking Group plc (NYSE: LYG)
Number of Hedge Fund Holders: 5
Lloyds Banking Group plc (NYSE: LYG) is a UK-based company that provides financial services to more than 30 million customers. It is also one of the largest employers, with 65,000 employees, in the region. It ranks 4th on the list of 10 best stocks under $10 in 2021.
Lloyds Banking Group reported stable credit demand in Q4 2020 and is optimistic about lower credit charges this year. The company announced that Horta-Osório plans to resign from his CEO position and the end of April. Charlie Nunn, the former head of the wealth and personal banking division at HSBC, will become Lloyd Banking Group’s new CEO.
Here is what Oakmark Global Select Fund has to say about Lloyds Banking Group plc in their Q4 2020 investor letter:
“U.K.-based retail bank Lloyds Banking Group was a large contributor for the fourth quarter, which marked a sharp reversal of the stock price decline realized in the third quarter. Positive Brexit deal developments helped boost the share prices of European-based companies, including Lloyds, in the fourth quarter and culminated in a late-period trade agreement between the U.K. and European Union that formalized a new economic and security partnership. Lloyds also released third-quarter earnings that we found to be reasonable considering present macroeconomic conditions. For the full fiscal nine-month period, total revenue fell 17% and underlying operating profit declined 85% from a year earlier. Results were significantly impacted by impairment charges that rose dramatically (+334%) for the full period. However, the vast majority of the impairment charge increase occurred in the first two quarters and eased in the third quarter, which helped drive strong sequential growth of underlying operating profit, totaling GBP 1.2 billion. Other important metrics showed evidence of improvement as well, including retail deposits that rose 7%, which resulted in a loan to deposit ratio of 98%, reflecting a healthy liquidity position. Importantly, Lloyds’ balance sheet remains strong as its Tier-1 ratio reached 15.2% in the third quarter (up from 14.6% in the second quarter), which exceeded both management’s target of 12.5% and regulatory requirements of roughly 11%. Management cited additional encouraging signs of a business recovery, including increased mortgage activity, which we think positions the company advantageously as the general economy normalizes. As we have expressed previously, we contend that Lloyds possesses a wide range of strengths to draw upon to reinforce its business during current near-term challenges. Even including its strong fourth-quarter stock price performance, we still believe the company’s shares are undervalued compared with our estimate of intrinsic value.”
3. Petróleo Brasileiro S.A. – Petrobras (NYSE: PBR)
Number of Hedge Fund Holders: 24
Petróleo Brasileiro S.A. – Petrobras (NYSE: PBR) is a significant player in the oil industry with operations in six major segments, including exploration, production, refining, distribution, transportation, and marketing. The company deals with oil and gas. The following developments highlight why Petrobras is one of the top 10 stocks under $10, considering the growth opportunities ahead. It ranks 3rd in the list of 10 best stocks under $10 in 2021.
Joaquim Silva e Luna, the company’s incoming CEO, reportedly endorsed the hiring of four of the company’s executives to lead some of its divisions. Four divisional executives exited the company after the previous CEO, Roberto Castello, was dismissed by President Jair Bolsonaro of Brazil due to a fuel prices dispute. PBR recently declared a $0.278 dividend per share.
2. Banco Santander, S.A. (NASDAQ: SAN)
Number of Hedge Fund Holders: 14
Banco Santander, S.A. (NASDAQ: SAN) is an international company with operations in key markets such as South America, the UK, and Continental Europe. The company has reportedly expressed interest in TDR Capital’s LeasePlan, although the details remain confidential.
Banco Santander’s head of global debt financing, Rafael Noya, will oversee the company’s expansion into leveraged finance. The company is shifting from high-grade debt in favor of speculative-rated borrowing. It is currently developing a team that will focus on securing high yields in the U.S and European markets.
The offer price will be 24.3% higher than the price of BSMX shares at the market close on March 25. Banco Santander’s Q4 2020 results revealed that its total income was €10.92 billion, while the GAAP EPS was €0.
1. Mitsubishi UFJ Financial Group, Inc. (NYSE: MUFG)
Number of Hedge Fund Holders: 8
Mitsubishi UFJ Financial Group, Inc. (NYSE: MUFG) is one of Japan’s largest banking sector companies. It operates various businesses, including leasing, credit cards, security, and trust banking. MUFG announced in January 2021 that it had plans to invest in a fund called Innovation Kyoto 2021 Investment Limited Partnership, allowing it to be part of the creation of the next generation of industries in Japan.
MUFG recently released its financials for its Q3 2021 fiscal quarter ended March 31, revealing that its gross profits grew by ¥47.4 billion. The increase was courtesy of net income gains and market-related gains after the Bank Danamon consolidation. The company’s target for FY2020 remains unchanged at ¥600.0 billion.
The company expects its net profit to grow by ¥50 billion as business performance continues to improve. MUFG’s expected dividend yield for the current fiscal year is ¥12.5, which is why it is one of the top stocks under $10 right now.
You can also take a peek at Top 10 Restaurant Stocks Under $10 and 10 Cheap Pharmaceutical Stocks For 2021.
