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If you've got $10 burning a hole in your pocket, I have some stock ideas for you.
I've been highlighting attractive opportunities in low-priced stocks since my original "5 Stocks Under $10" column nearly 16 years ago, and I've seen plenty of stocks with pocket-change prices generate incredible gains.
There are risks, of course. Stocks don't trade in the single digits because they're flawless and popular. However, it's also in this pool of neglected growth stocks where market rallies can work wonders for the right stocks.
Let's go over my five picks from March 2009 -- when low-priced stocks bottomed out -- to prove my point.
*Bare Escentuals was acquired for $18.20 per share in 2010. Focus Media was acquired for $27.50 per share in 2013.
The average gain of 677% in a little less than eight years is pretty remarkable. These picks were made just as the market was hitting rock bottom, but that still blows away every major market index in that time.
Let's review some new potential winners at single-digit prices.
Staples(NASDAQ: SPLS) -- $9.97The last two major office -upply superstore operators are waffling about in the single digits, but Staples is holding up better than Office Depot (NASDAQ: ODP). Sales are declining in the low single digits at Staples, but that's better than the double-digit percentage dives at Office Depot.Staples and Office Depot are both trading at a little more than 11 times this year's projected earnings.
Office-supply retailers have struggled as online merchants have gotten better at outfitting Corporate America, and there's also something to be said about digital delivery that's eating into the faxes and mailings that used to consume office-store supplies. However, with the possibility of lower federal corporate tax rates stirring entrepreneurial juices, it could be a good time to buy into office supplies -- and Staples is better positioned player than Office Depot.
Sirius XM Radio -- $4.52My best call from the 2009 list continues to live up to the hype. Satellite radio is as popular as ever. It's now up to nearly 31 million subscribers, and they don't mind paying up for premium coast-to-coast radio coverage.
Sirius XM expects to generate roughly $1.5 billion in free cash flow this year. The scalable model works. Fears that the connected car and free or nearly free streaming apps would eat into the platform's popularity have been unfounded. The stock recently hit a 10-year high, and momentum points to higher highs in the future.
Fitbit(NYSE: FIT) -- $7.48The top dog in wearable fitness has been a disaster lately. New products have failed to take off, and Fitbit's once heady growth has decelerated sharply. Fitbit is targeting just 2% to 5% in sales growth for the holiday quarter, but given the spike in average selling prices, this probably translates into fewer units.
Smart watches, GPS gadgetry, and smarter smartphones are getting better about encouraging fitness. However, Fitbit continues to be the brand of choice, and corporate-wellness initiatives find a growing number of companies willing to subsidize Fitbit bracelets. Fitbit will need to show signs of turning things around early in 2017 to bounce back, but as a busted IPO with a popular brand, the ceiling is high if it's able to get back on track.
Three for the road
These stocks aren't trading in the single digits by accident. If I'm right about the catalysts, though, they may not be trading in the single digits for too much longer.
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Rick Munarriz owns shares of Fitbit and Ford. The Motley Fool owns shares of and recommends Fitbit and Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.