The beginning of the year is a good time for some portfolio rejig. I would look at further strengthening my positions among blue-chip dividend stocks. At the same time, it’s important to remain aggressive in the markets and consider some exposure to high-risk and low-price stocks that can deliver multibagger returns.
There has been ample discussion on penny stocks that can be value creators. This column focuses on stocks under $10 that can be 3-baggers in the next 24 months. This is not an unrealistic expectation as there are multiple early-stage companies that are poised for stellar growth in the next few years. Strong revenue growth is likely to translate into robust stock upside.
I must however caution that 2024 will be another year of selective stock rally than a broad-based euphoria. Therefore, not all low-price stocks are likely to fire. Let’s discuss the reasons for being bullish on these under $10 stocks.
Archer Aviation (ACHR)
Archer Aviation (NYSE:ACHR) is among the hottest flying car stocks under $10 to buy. Even after surging by 237% in the last 12 months, I believe that the best part of the rally is still to come. The reason being potential commercialization of eVTOL aircraft in 2025 and plans for aggressive growth in the next few years.
In terms of positives, the Company expects to begin “for credit” testing with the Federal Aviation Authority this year. The Company will also be flying on stimulated commercial routes. This will set stage for commercialization next year.
It’s also worth noting that Archer will be launching air taxis in the UAE and India in 2026. Therefore, in the next 24 months, the Company will have presence in three big markets. It’s also likely that Archer will be looking for partnerships in other major markets in the coming quarters.
Currently, Archer has a backlog of $142 million from the U.S. Air Force. The Company also won a purchase order worth $500 million from Air Chateau International. As the backlog swells, revenue visibility will increase. All these positives point to a sustained uptrend for ACHR stock through 2025.
Lithium Americas (LAC)
Lithium Americas (NYSE:LAC) stock seems like an easy 3-bagger from current levels considering the asset valuation. The lithium miner has been depressed on the back of a sharp decline in metal prices last year. Once sentiments reverse, I expect a big rally in LAC stock.
It’s worth noting that amidst the stock decline, business developments have remained positive. First, the Company’s project has a “fully permitted” status and paves path for production. Further, Lithium Americas is well financed for project construction with the liquidity infusion from General Motors (NYSE:GM). The latter also has a 10-year off-take agreement from Phase one, which provides cash flow visibility.
I must mention that the prized Thacker Pass project has a mine life of 40 years. The after-tax net present value of the Company’s asset is currently at $5.7 billion with an average annual EBITDA potential of $1.1 billion. With all these factors, it’s just a matter of time before LAC stock skyrockets.
Kinross Gold (KGC)
With gold trading at $2,060 an ounce, I am bullish on gold mining stocks. Further, with multiple rate cuts on the cards this year, it’s likely that gold will continue to trend higher. Kinross Gold (NYSE:KGC) is among the most undervalued stocks to buy under $10. At a forward price-earnings ratio of 14.9, KGC stock looks attractive.
Coming to fundamentals, Kinross is possibly the best among emerging gold miners. As of Q3 2023, the Company reported a liquidity buffer of $2 billion. Further, with gold above $2,000 an ounce, annual operating cash flows are likely to be around $2 billion. This provides Kinross with high financial flexibility or organic and acquisition driven growth.
It’s worth noting that Kinross currently expects stable gold production through 2025. A potential acquisition and production growth visibility can be a big catalyst for a sustained rally.
On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.