In this article, we will discuss the 5 best U.S. stocks to buy now under $10. If you want to explore similar stocks, you can also take a look at 15 Best U.S. Stocks to Buy Now Under $10.
5. Gray Television, Inc. (NYSE:GTN)
Share Price as of September 22: $7.26
Number of Hedge Fund Holders: 28
Gray Television, Inc. (NYSE:GTN) is a company that operates television stations and digital platforms in the U.S. It owns or has affiliations with over 200 stations across 94 markets. It also produces original content and provides advertising services.
As of June 2023, 28 of the 910 hedge funds profiled by Insider Monkey had invested in the company. Gray Television, Inc. (NYSE:GTN)’s largest hedge fund investor in our database is Ken Griffin’s Citadel Investment Group with $11.42 million investment.
Here is what Miller Value Partners said about Gray Television, Inc. (NYSE:GTN) in its second quarter 2023 investor letter:
“During the quarter, we initiated positions in Western Alliance (WAL) and Gray Television, Inc. (NYSE:GTN). Gray Television is the second largest broadcast company in the U.S., located across the country in 113 markets, reaching 36% of U.S. households. The company appears attractively positioned, with 70% of its markets with the #1-ranked local T.V. stations and another 20% with the second-ranked station. Gray has a good distribution profile, growing its retransmission revenue in the mid-single digits over the past five years. Given their strong local stations, the company leads the industry in political revenue during election cycles. The stock price is down more than 60% from its 52-week high as the marketplace has been concerned about limited political revenue this year along with ongoing fears of a pullback in advertising spending from economic weakness. However, we see the potential for earnings and free cash flow to dramatically improve next year as political advertising reaccelerates and retransmission contracts are expected to renew at favorable rates. In addition, Gray recently spent $200M to develop Assembly, a state-of-the-art Film & T.V. studio, with 20 sound stages on 43 owned acres in Atlanta. NBC Universal signed a 15-year lease to manage the studio for Gray and will begin filming new T.V. series and movies in the back half of this year. There are low expectations in Gray’s stock price from the Assembly asset, as no analysts are currently including any future economics in their business projections. We agree with management’s outlook of meaningful free cash flow generation from the Assembly asset upon maturity.
In addition to lifting the long-term free cash flow power of the company, it should also materially reduce the cyclicality in non-election years. While the company has a higher debt load from prior station acquisitions, there are limited maturities over the next couple of years. We see strong free cash flow generation over the next five years (potentially >$2.5B) that could allow the company to rapidly delever over time. With greater than 50% forward earnings and free cash flow yield, Gray’s long-term upside potential is multiples of the current share price.”
Follow Gray Media Inc (NYSE:GTN)
Follow Gray Media Inc (NYSE:GTN)
Hedge Fund Resource Center