Investors are enjoying a holiday-shortened trading week in front of Turkey Day on Thursday. I continue to remain wary about the markets as I believe the economy is heading directly into a recession in 2023. However, today I will channel the holiday spirit and offer up three small-cap names trading under $10 a share that appear set up to do well in the coming year.
Let's start with Hims & Hers Health, Inc. (HIMS) , which trades for around $6 a share.
Hims and Hers is a direct-to-consumer telehealth company with a focus on making certain products that treat stigmatized conditions more accessible, affordable, and convenient to obtain, such as erectile dysfunction or ED products. More and more consumers prefer this sort of easy access to a solution through the relative anonymity of a tele-consultation with a licensed healthcare professional. I am sure you have seen their ads. They are ubiquitous these days.
Earlier this month, Hims and Hers reported a strong third quarter and also moved its 2022 sales guidance far above the consensus. This prompted an upgrade to a "Buy" rating at Bank of America. While the company will probably not be profitable until 2024, it has a rock-solid balance sheet and is delivering stellar revenue growth.
Next up is Genius Sports Ltd. (GENI) , which has a similar story to Hims & Hers and trades near the $5 level.
Genius develops and distributes technology-led products and services to the sports, sports betting, and sports media industries primarily to Europe for the moment. These platform capabilities allow the collection, integration, and distribution of live data of sports leagues as well as streaming solutions, which allow distribution for sports to commercialize video footage of their games.
Genius also posted better-than-expected third-quarter results this November, and is a few years away from being in the black. The company should deliver approximately 30% revenue growth this year with sales in the U.S. tripling in the third quarter as the company is focused on expanding its footprint here. Genius did have a $9 million net loss for the third quarter but has some $150 million in cash on the balance sheet to fund its way until profitability.
Lastly, construction giant Tutor Perini (TPC) currently trades at around $8 a share. The company has had a miserable 2022 as the stock has fallen over 35% during the year. Several huge projects have had significant cost overruns and/or adjustments. However, the company has a huge order backlog and has delivered strong operational cash flow.
Tutor Perini should return to profitability in 2023 and is cheap on a forward earnings and revenue basis.