We recently compiled a list of the 10 best US stocks to buy for under $10. In this article, we’ll take a look at how Marketa Inc. (NASDAQ:MQ) stands compared to other US stocks.
small cap value
There is cautiously optimistic sentiment surrounding small-cap stocks as market developments continue. Although many investors are satisfied with the economic fundamentals, concerns about high valuations persist. While the overall market may seem expensive, this is largely due to the stocks with the largest market capitalizations, leaving room for growth for smaller companies.
As global markets improve amid a broader easing cycle, these stocks could play an important role in portfolio diversification. You should focus on identifying value beyond mega-cap stocks to discover opportunities in different sectors and geographies. This strategic position was highlighted by T. Rowe Price’s Sebastian Page on CNBC just a few days ago. We featured his thoughts on small-cap stocks in our article on the 10 Most Promising Hedge Fund Penny Stocks. Below is an excerpt.
“Mr Page highlighted that the current strategy includes a slight overweight of 0.5% in equities compared to bonds, which is a significant increase in risk appetite compared to previous conversations over the past 18 months. “This shows that the level of concern is increasing,” he said. He acknowledged that while the overall market multiple may seem expensive, it is skewed towards the largest stocks by market capitalization. This suggests there is still opportunity beyond the mega-cap names that have become too consensus-driven and costly.
Page cited concerns about valuations, noting that while the price-to-earnings ratio appears high, it’s important to consider the context. He said the current valuation could be lower than the historical median after adjusting for return on equity. Furthermore, the average global stock price trades at a P/E ratio of around 13 times, which is in line with the long-term average, he noted. This shows that while some segments may appear overvalued, many stocks are reasonably positioned relative to past performance. ”
On October 11, CNBC’s Mike Santoli and Northwestern Mutuals’ Brent Schutte appeared on CNBC’s “Power Lunch” to discuss the CPI report numbers and market reaction. Brent Schutte believes there is value in small- and mid-cap stocks regardless of the Fed’s policy decisions.
He expressed concern about the potential for a wage-price spiral, especially given the large wage increases expected for large employers. He stressed that these wage increases could contribute to continued inflation, especially as the economy is already in the later stages of the business cycle and there are fewer workers available. Although the unemployment rate has increased slightly, he stressed that as demand picks up, it will be difficult to contain inflation. He noted that rising wages are an important factor in how the Fed conducts monetary policy.
Schutte said the Fed has historically struggled to balance inflation and employment signals and is often too slow to react to emerging trends. He noted that although there are signs of weakening in the labor market, current inflationary pressures remain significant. He cited recent data showing the median CPI rose 0.4%, suggesting the path forward could be more complicated than investors currently expect.
Mike Santori joined the conversation to discuss what will dominate the market focus in the coming weeks. He cited earnings reports as a key factor, along with economic data and the potential impact of upcoming elections, noting that while persistent inflation could ultimately pose a challenge for the Fed, current interest rates of 4.57 He admitted he doesn’t expect that to happen anytime soon, given that it’s between 2.57% and 2.57%. 5%. He suggested that the stock market may not react negatively to the Fed’s easing of monetary policy if it coincides with a strong economy.
Mr. Santori discussed large-cap stocks and their performance late in the cycle, and expressed concern about whether small-cap stocks will eventually take over as market leaders. He drew parallels with past market conditions, where parochial leadership was evident during economic downturns. He noted that small- and mid-cap stocks are priced in for a recession, and their performance on days of rising interest rates shows they are under pressure relative to large-cap stocks.
Mr. Schutte then spoke about the impact of persistent inflation on small-cap returns, highlighting that Russell 2000 returns were flat for three years amid rising interest rates. He questioned the extent to which this scenario is already priced into the market, noting that many investors are drawn to mega-cap stocks for a sense of stability amid economic uncertainty.
Schutte emphasized the importance of monitoring economic indicators when determining small-cap stocks among other stocks, but to make your search easier, we’ve included the 10 best U.S. stocks to buy for under $10. Here is a list of them.
methodology
We used the Finviz screener to create a list of 30 large-cap U.S. stocks trading below $10. We then selected the 10 stocks that are most popular among elite hedge funds and that analysts are bullish on. Stocks are ranked by the number of hedge funds that own the stock as of Q2 2024. The hedge fund data comes from Insider Monkey’s database, which tracks the movements of more than 900 elite money managers.
Why are we interested in stocks that hedge funds invest in? The reason is simple. Our research shows that by mimicking the top stock picks of the best hedge funds, you can outperform the market. Our quarterly newsletter strategy selects 14 small- and large-cap stocks each quarter and has returned 275% since May 2014, outperforming the benchmark by 150 percentage points (Learn more ).
Financial services team working to verify customer data on digital bank.
Marketa Corporation (NASDAQ:MQ)
Stock price as of October 16: $5.08
Number of hedge fund holders: 35 people
Marqeta Inc. (NASDAQ:MQ) enables businesses to create and manage customized payment cards using technology that provides the infrastructure for a variety of payment solutions, including debit cards, prepaid cards, and credit cards. This is the latest, most advanced card issuing platform. Its platform provides flexibility and scalability, allowing businesses to quickly launch and manage payment programs.
Despite recent partnerships with Varo Bank and Zoho, the company’s revenue fell 45.8% year over year due to changes in revenue reporting from Cash App. However, risk solutions such as 3DS and risk management recorded a significant increase of 61%. Marqeta Inc. (NASDAQ:MQ) continues to expand its partnerships, including partnering with Payhawk for advanced card management and Rippling for Canadian corporate credit cards.
In late September, the company entered the Canadian small business banking market with Rippling, offering a new business credit card solution. The move is driven by Canadian businesses’ dissatisfaction with traditional banks and a growing trend toward contactless payments. Rippling cards, issued by Marqeta Inc. (NASDAQ:MQ), offer automated card issuance, expense management, and spend management to meet the needs of small and medium-sized businesses.
Around the same time, the company partnered with Found to provide a streamlined expense management solution for small businesses and the self-employed. Found’s business banking platform is powered by Marqeta Inc.’s (NASDAQ:MQ) card issuance platform and offers features such as spending limits, real-time tracking, and simplified tax management to improve financial efficiency and security for businesses. We will help you improve your skills.
The company is poised to benefit from the growing popularity of digital banking among young people. Recent research shows that one-third of consumers now prefer digital-only banks and more than 60% of young people accept non-traditional financial services.
Overall, MQ ranks 9th on the list of US stocks you can buy for under $10. While we see MQ’s growth potential as an investment, we believe AI stocks have great potential for high returns in the short term. If you’re looking for AI stocks that are more promising than MQ but trade at less than 5x earnings, check out our report on the cheapest AI stocks.
Read next: $30 trillion opportunity: 15 humanoid robot stocks to buy, according to Morgan Stanley and Jim Cramer, says NVIDIA has ‘become a wasteland.’
Disclosure: None. This article was originally published on Insider Monkey.
