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Institutions are a driving force in big stock moves. They have trillions of dollars under management, and when they pile in or out of stock, they will move prices.
That's happening right now with our best stocks under $10. In fact, institutional buying could send our best stock today soaring 124%.
Some of the most significant gains you will ever make can come from finding growth opportunities before those institutions. When they finally hear the story and fall in love with the company, their buying can make you an enormous amount of money.
These stocks are cheap because they've received little analyst coverage. As a result, only a few institutions have started buying the stock. As the company continues to perform well, the thundering herd of Wall Street will provide the buying pressure to drive the price higher.
So we look for fast-growing companies that trade in the single digits with low institutional ownership. Then we hope the institutions catch on later.
These are the kinds of opportunities that await us in 2021. Now, here's the first of our stocks under $10.
The Best Cheap Stocks to Buy Are in Tech
O2Micro International Ltd. (NASDAQ: OIIM) develops and markets high-performance integrated circuits for the computer, consumer, industrial, and automotive markets. Its primary product is LED backlighting technology and battery management products.
The battery management products use highly integrated mixed-signal ICs designed with O2's Cool Battery Technology. These provide safe battery management for mobile applications such as smartphones, notebook PCs, tablets, power tools, electric bikes, and even electric vehicles.
Battery-based computing will be huge in the Internet of Things market, and O2 Micro wants to be a big player in the explosive market.
WARNING: It's one of the most traded stocks on the market every day – make sure it's nowhere near your portfolio. WATCH NOW.
Its LED backlighting products are used in laptops and notebook computers and are also found in high-definition television sets. The fastest-growing segment of the LED backlighting market is in smart car applications, and O2 is ramping up its efforts in that market.
The company has been growing at almost 20% a year over the past five years. The few analysts that do follow the stock expect earnings to continue to grow at that pace for the next five years.
Despite that, not many institutions own the stock. Institutions own less than 40% of the company right now.
That's changing as we saw a 70% increase last quarter in the number of institutions that own the stock. The "thundering herd" could be on the way to push this stock much higher than the current stock price of $9.07.
But you can get this next one even cheaper before the smart money piles in…
This Tech Stock Won't Be Cheap for Long
Based in Sweden, Neonode Inc. (NASDAQ: NEON) is the go-to company for Contactless Touch, Touch, Gesture Control, and In-Cabin Monitoring. Its technology has been installed in more than 75 million products worldwide, including things like consumer electronics, office equipment, medical devices, and avionics equipment.
Neonode has two divisions. The HMI Solutions division provides customized optical touch and gesture control solutions. A lot of this business is with the military and avionics industry. It also offers solutions for industrial devices that have to work in harsh environments and solutions for Smart Building management.
This division also makes touch systems for standardized sensor modules for interactive kiosk and elevator markets. A kiosk can be anything from vending machines to fast food ordering kiosks or airline ticket kiosks.
It is also working on the holographic touch or in-air touch for several industries. Thanks to COVID-19, these are becoming wildly popular. It has installed contactless check-in systems in the Singapore airport and in elevators so far. I expect we will see a lot more contactless systems across a wide range of industries in 2021.
The Remote Sensing Solutions division makes driver and in-cabin monitoring systems for automobile cabins. Creepy as it sounds, this technology will be required in the European Union by 2024. Neonode's technology will help car manufacturers add this safety feature to new cars in an efficient manner.
This should also have widespread uses for the driverless car marketplace.
Neonode has been growing at more than 20% for the past five years and should keep growing at close to that pace. Institutions have not discovered the company yet as only 12% of the stock is owned by the big money.
One analyst follows the stock and has a price target of 64% higher than the current stock price of $8.
When the big money does realize the potential of this company, its buying pressure could make shareholders a lot of money very quickly.
It's not quite our best stock under $10, however. Here is the one set to pop 124%…