Finding high-quality investment opportunities among stocks priced under $10 is a challenge considering most companies with low stock prices have significant risks and uncertain futures. These investments come with all the perks of stocks trading for hundreds of dollars a share, but they won’t cost you an arm and a leg. And at under $10, these stocks have major upside potential.
Bank of America analysts have sifted through the market to identify eight high-quality, low-priced stocks under $10. Stock Implied upside* Itau Unibanco Holding SA (ticker: ITUB) 21% Banco Bradesco SA (BBD) 44% Companhia de Saneamento Basico do Estado de Sao Paulo (SBS) 25% Blue Owl Capital Inc. (YMM) 23% Gerdau SA (GGB) 14% Ultrapar Participacoes SA (UGP) 15% *Based on July 24 closing price and Bank of America analysts’ price targets.
Itau Unibanco Holding SA (ITUB) Itau Unibanco is a top Brazilian bank and financial services provider that accounts for a leading share of Brazil’s commercial foreign exchange market. The bank also provides financial products and services throughout Latin America, such as asset management, investment banking and insurance. Analyst Mario Pierry says Itau is facing a difficult environment in Brazil that has included slowing revenue growth and normalization of asset quality.
However, Pierry says the bank has de-risked its loan book, improved its efficiency ratio and maintained a solid balance sheet. Bank of America has a “buy” rating and $10 price target for ITUB stock, which closed at $8.28 on July 24. Banco Bradesco SA (BBD) Banco Bradesco is Brazil’s leading private-sector bank in several key segments, including insurance, leasing, private pension funds and asset management.
In April, Bradesco successfully completed the merger of its healthcare assets with Odontoprev and executed a reverse initial public offering for the new entity, BradSaude SA (SAUD3.SA). Pierry says deferred tax asset consumption, efficiency improvements and a better macroeconomic environment will help further improve Bradesco’s return on equity. The company aims to reach a 40% efficiency ratio in 2028.
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