- With the economy on a rebound, many UK stocks under £10 look promising
- Most of them are trading in a narrow range, indicative of a potential breakout
- These 5 could be potential big winners for patient investors
Finding a good stock that is under £10 is no mean feat. That’s because most of the stocks in this category are penny stocks that carry an elevated level of risk.
However, this doesn’t mean that there aren’t good stocks in this category. This is the category where one can find highly innovative companies that are just getting started in the market.
With this in mind, here are five high potential UK shares trading at under £10 you can buy right now.
- Quantum Blockchain (QBT)
- Itaconix (ITX)
- Comptoir (COM)
- Zephyr Energy (ZPHR)
- Zaim (ZAIM)
1. Quantum Blockchain (QBT)
A blockchain company experimenting with quantum computing
The crypto market is on an explosive growth path. A few days, El Salvador started the integration of Bitcoin into its financial systems. While it faced a few hitches, it is a huge validation of cryptocurrencies as the future of finance.
This means companies that are involved in cryptocurrency mining are well-positioned for growth going forward. That’s because, as the value of the cryptocurrencies they mine goes up, so will their valuations.
For instance, since early 2020, the value of Bitcoin has gone up significantly from around $8k to $64k in April 2021. While it dipped in May/June, it has since the rebound and is now close to its all-time highs.
This means any company that has been mining and holding Bitcoin, over this period has experienced growth both in asset value, and revenues.
Blockchain company Quantum Blockchain (QBT) is a company that is right in the middle of this fast-growing market. This stock has room to grow as the value of Bitcoin increases, and it is trading at just £1.3 per share.
While there are other listed companies that are heavily involved in Bitcoin mining, this one stands for its innovations.
As per its research and development update of August, Quantum is developing tools that can help it mine Bitcoin more efficiently. The company is combining quantum computing and AI in its bid to achieve this end.
It has already laid down the plans and implementation steps towards the achievement of this goal. Among the steps it has put in place include assembling a team of experts that cuts across sectors and signing research agreements with top university tech departments.
The company has already made significant steps towards its objectives. It recently stated that in a matter of weeks, it would be filing for patents internationally.
This is a big deal, and if there is a significant breakthrough, could see this company’s revenues grow significantly. Such tech would give it the capacity to mine Bitcoin faster and more cost-effectively.
Quantum’s chart also points to a stock that is on the verge of a breakout. It has been trading in a narrow range between the 50-day and the 100-day moving averages for weeks now.
If it breaks out through the 100-day moving average resistance, the potential upside is pretty high.
Quantum Blockchain is a stock that is worth buying now, while it is still under £10.
2. Itaconix (ITX)
Banking on environmentally friendly chemicals
The world is fast moving towards solutions that can help mitigate the dangers of climate change on the planet. This has led to a confluence between private sector initiatives and government policy.
This is evident in the fast growth of everything from electric vehicles to the use of recycled materials in everything from packaging to construction.
The structural shift in how business is done will have a long-term positive impact on companies that align themselves well to fight climate change.
Itaconix (ITX) is one company set to benefit as the demand for environmentally-friendly products grows.
The company specializes in the design and development of biopolymers used in both home care products and industrial applications.
The growing demand for environmentally-friendly products reflects in its share price performance over the past year. While it has underperformed year-to-date, it is still up by over 200% since 2020.
With the economy opening up, and Itaconix selling products that are in high demand, this stock holds a lot of potential going into the future.
Besides its products’ massive potential in the market, Itaconix’s charts look pretty good too, and the stock price is at a good entry point.
While it was bearish all through June and July, it seems to have found strong support at £6.
Buying volumes have been on the rise all through the first week of September, an indicator that the £6 support could hold.
Going forward, the key resistance to watch out for is the 200-day moving average at £7.43.
If Itaconix stock pushes through this level, the upside potential could be pretty huge. It is a top UK share under £10 to buy now.
3. Comptoir (COM)
Luxury travel is almost guaranteed to rebound.
Leisure and travel were among the hardest hit markets when the COVID-19 lockdowns started.
With people restricted from leaving their homes, the operations of hotels and related industries pretty much grid to a halt.
However, with vaccination levels now at their peak in most developed countries, this situation is pretty much guaranteed to change for the better.
This gives stocks in the travel and leisure industry good prospects going into the future.
Comptoir (COM) is one of the stocks set to reap big, and at £7 per share, an investor can accumulate a significant amount of these shares without breaking the bank.
Besides the broader market outlook being quite attractive, COM has pretty good internal fundamentals. Its revenues took a hit due to the pandemic, and quarterly revenue growth is currently at -63.70%.
However, the company has managed to maintain a pretty solid balance sheet. It has a current ratio of 1.01. This means, despite operating at almost no revenues for months, the company has the current assets to cater for all its current liabilities.
It also has a positive cash flow of £2.72 million, which means it has the resources to carry out its daily operations. With the operating environment improving, these numbers will only get better.
COM’s price chart looks pretty good too. While its trading volumes have been pretty low over the last two months, the selloff that started in June has subsided. The stock seems to have found strong support at £7.
If it announces an improvement in revenues within the year, then there is a good chance that it could push through the 100-day moving average resistance at £ 8.16. This could open the way for significant gains in short to medium term.
4. Zephyr Energy (ZPHR)
Oil is not going anywhere yet.
Long term, the oil demand is on a decline. However, in the short term, demand remains high.
With the world economy on a rebound, demand is likely to surge going forward. At the same time, OPEC has announced that it is committed to keeping oil prices above $65.
This makes Zephyr Energy (ZPHR) a good value play now that it is trading at just £6.55.
The company prospects for oil in the US and is set to benefit if oil prices remain within their current price range, or go higher.
Its strong prospects are evident in its price action year-to-date. In this period, it has been trending up, holding steady above the 50-day moving average support
Zephyr Energy stock recently bounced off this support, which means there is a huge potential upside in short to medium term.
5. Zaim (ZAIM)
Is this fintech company the next big thing in microlending?
Fintech companies have gained considerable traction in the market recently, and for a good reason. They are offering highly innovative solutions that banks, and other large financial companies, may be unable to do efficiently.
For instance, Zaim (ZAIM) has seen its share of Russia’s micro-finance market grow in a very short time.
Founded in 2011, the company now has operations in 95 locations within Moscow and other towns and cities around the country. The company’s competitive advantage is in its ability to lend small amounts of money that most banks cannot do profitably without significantly increasing costs.
If its fast network growth is anything to go by, then this stock has the potential to grow exponentially from its current price of £4.1.
While there are never guarantees when investing, Zaim stock looks like a pretty attractive UK share under £10 to buy today.
Currently, volumes are low, but it is trading in a narrow range between the 50-day and the 100-day moving averages. If iZaim stock breaks out of this range to the upside, then it has plenty of room to grow in the short to medium term.
It’s Important To Understand What You Are Getting Into
The stocks discussed above are highly speculative. Most of them are relatively small companies, and if the market experiences a correction, they could get hit more than the larger cap stocks.
As such, it is best to invest with the long-term view in mind. One should also be ready to ride the volatility that characterizes such stocks.
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