Fifteen bucks won’t go too far these days – unless you want to invest in these under-$15 stocks to buy.
Inflation growth may be falling, which obscures the real fact that pricing today for goods and services remains higher than just two years ago. That’s an obvious fact since inflation is measured as a function of continued growth rather than real pricing differences. This is one of the multiple reasons that consumer confidence remains low despite “good” inflation stats.
At the same time, high-flying tech stocks like Nvidia (NASDAQ:NVDA) are rapidly pricing retail traders out of the market. That’s where these under-$15 stocks step in. Cheap enough to accumulate a sizeable position, each stands ready to rapidly accelerate based on unique circumstances and bullish tailwinds, propelling them to success.
Aehr Test Systems (AEHR)
Aehr Test Systems (NASDAQ:AEHR) stands out among under-$15 stocks to buy, as it’s ready to leverage the ongoing semiconductor industry boom through its distinct approach.
The company’s operational model differentiates it from newcomers and established industry leaders by focusing on developing and providing test systems that guarantee semiconductor reliability and quality. As semiconductors grow smaller, more complex, and costlier, the demand for sophisticated testing systems is set to skyrocket. These demands and expectations, in turn, secure Aehr’s position for substantial growth as a small-cap, under-$15 stock.
In January, Aehr reported impressive financial results, with a 45% increase in revenue year over year and a 63% boost in GAAP net income. CEO Gayn Erickson has highlighted potential challenges, including a slowdown in the electric vehicle (EV) market growth rate, which might impact order timings from both existing and prospective clients.
Luckily, Aehr’s expertise extends beyond the EV industry, encompassing semiconductor chips in 5G, AI, machine learning, and more. Even with potential EV market obstacles, Aehr is on track for a remarkable performance in 2024 and beyond, thanks to its specialized yet wide-ranging expertise.
Steelcase Inc (SCS)
High-end office furniture Steelcase Inc (NYSE:SCS) isn’t just adapting to work-from-home trends – the company is thriving. That’s evident from the company’s recently announced $0.10 quarterly dividend, representing a 61% payout ratio and 2.88% yield.
After a rocky pandemic period, Steelcase is rapidly regaining financial strength. The company’s most recent quarterly report marked $30.8 million in net income, more than double the prior year’s period. At the same time, sales remain steady right around $800 million over the past five quarters – meaning that Steelcase is improving margins without sacrificing quality.
Steelcase is working to reorient itself within the work-from-home paradigm and projects 5-7% annual sales growth and 5% free cash flow (as a percentage of revenue) over the next five years. At the same time, the company aggressively cut down on debt in light of the higher-rate environment, improving liquidity and keeping interest costs low. This makes it one of those under-$15 stocks to buy.
ClearPoint Neuro (CLPT)
ClearPoint Neuro (NASDAQ:CLPT) is a small-cap healthcare stock trading well below $15, but that doesn’t make the company’s prospects any less attractive. Last month, the firm secured another win as its ClearPoint 2.2 software integrated with Maestro Brain Modeling locked FDA approval in a major move that improves surgical precision when it comes to brain and spinal navigation. ClearPoint expects the product to hit markers in 2024’s second half, providing a healthy boost to top and bottom-line financials. The approval comes on the heels of the FDA approving its SmartFrame OR Stereotactic System, which offers a non-invasive alternative to precise cancer targeting.
CLPT shares slumped over the past few weeks after the company announced a dilutive share offering to raise cash. While not ideal, small-cap companies like ClearPoint need cash to expand, particularly in the tech-heavy sector ClearPoint operates within. The per-share pricing dip likely won’t last long, making the under-$15 stock destined to break into double-digit pricing soon. All in all, it’s one of those under-$15 stocks to buy for investors to consider.
Sirius XM Holdings (SIRI)
When Warren Buffett buys an under-$15 stock, investors pay attention. That’s why satellite radio Sirius XM Holdings (NASDAQ:SIRI) stands out as a unique choice backed by the billionaire. In a period where Buffett’s Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B) sold more stocks than it bought, one purchase stood out – a $167 million investment in Sirius XM. That’s particularly noteworthy as many downplay the stock’s potential. In fact, SIRI remains one of the most shorted stocks as of this writing, with 25% short interest. So why is Buffett bullish on this under-$15 stock?
While partially a merger arbitrage play, Buffett isn’t buying SIRI for a short-term trade opportunity. Instead, Sirius XM seems to be one of those classic Buffett value stocks, trading at low multiples with a bright future ahead. The company is also a cash cow, consistently hitting 30%+ EBITDA margins over the past four years while keeping free cash flow well north of $1 billion over the same period. Finally, SIRI offers a modest dividend yield of 4.15% with a payout ratio of 31% – showing that management knows how to manage cash to keep shareholders happy while growing market share.
Rocket Lab USA (RKLB)
Rocket Lab USA (NASDAQ:RKLB) isn’t just another under-$15 stock with potential for significant gains; it’s poised to tap into the burgeoning trillion-dollar space industry. The space stock made a splash last year with a historic number of launches and continues to strengthen its position as a top stock under $15, thanks to a government contract exceeding $500 million and a robust earnings report last week.
The company boasts a launch and contract backlog valued at approximately $1 billion. Although these orders are subject to cancellation, they provide a rough forecast of Rocket Lab’s future revenue potential. With fourth-quarter revenue reaching $60 million, this backlog hints at substantial future growth. Rocket Lab’s management anticipates first-quarter revenue to rise to between $92 and $98 million, reinforcing its growth trajectory.
As Rocket Lab is still in a phase of aggressive expansion and backlogs don’t immediately translate to cash flow, the company is expected to continue seeking funding, likely through equity or convertible debt offerings, as seen last month. Although such actions dilute shareholder value temporarily, they are strategic moves to broaden Rocket Lab’s operational scope – and set conditions for the under-$15 stock to skyrocket.
Nintendo (NTDOY)
Nintendo (OTCMKTS:NTDOY) is making big moves beyond basic gaming based on recent indicators, which could send the under-$15 stock soaring soon. This week, the company renewed licensing for haptic tech that could offer insight into Nintendo’s next move based on past rumors. You may recall that last year, a Nintendo leak alleged a Google (NASDAQ:GOOG, NASDAQ:GOOGL) partnership to develop a next-gen virtual reality headset. While the rumor remains just that – a rumor – adding haptic feedback tech to Nintendo’s suite of tools points to something big brewing below the surface.
Beyond gaming, Nintendo is also capturing upside from its massive intellectual property catalog through movie licensing. Last year’s Super Mario Bros. Movie was a resounding success, bringing in more than $1.4 billion at the box office. Keeping the momentum going, Nintendo recently announced a Zelda adaptation that will likely match or surpass Mario’s ticket sales. And, of course, Nintendo’s core products remain popular – even as hardware delays pushed its new console release to early 2025. This makes it one of those under-$15 stocks to buy.
Hanesbrands (HBI)
Hanesbrands (NYSE:HBI) is a top innerwear clothing seller, capturing 60% of the total addressable market in multiple countries – but share pricing remains low for the under-$15 stock. In fact, shares trade just north of $5 today, marking a shockingly low 0.34x price-to-sales ratio.
Beaten up by supply chain struggles and slack consumer confidence, Hanes’ management is actively right-sizing operations and tightening its reach. Last month, the company solicited tentative bids for its Champion clothing line as it reorients its focus away from athletic wear and back toward core innerwear offerings. The starting bid is rumored to be $1.4 billion, a solid payout that simultaneously serves to help Hanes narrow its lens.
Last year, activist investment firm Barington Capital Group issued an open letter (or challenge) to Hanes, demanding cost reductions, inventory cuts, and margin recovery. It seems likely that Hanes took Barington’s words as inspiration for the Champion deal – meaning we’re just starting the road to recovery for this under-$15 stock.
On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.