Hidden Stock Gems For Less Than $10

Yamana is up more than 70% since my initiation a little over a month ago, and we already booked some profits.

The story is similar for oil companies, with crude dropping from $149 a barrel to under $40 this year. Many under-$10 energy stocks with solid balance sheets are down 80% or more. Investors are already pricing in $25 a barrel, which provides a limited downside risk and above-average upside potential.

One stock I like is WSP Holdings(WH Quote). The oil service company has a strong balance sheet with no long-term debt. It just raised guidance and has seen a huge drop in steel prices -- its largest cost. The stock has been under pressure with the rapid decline in crude, but if oil holds near the $25 to $30 level, I believe WSP has significant upside in the short-term.

Another example of a beaten-down stock is Imax(IMAX Quote). Last month, The Day the Earth Stood Still, starring Keanu Reeves, topped the box office. More important, the average revenue per theater for Imax was more than $30,000, compared with the national average of just $8,700. This is significant, given that media companies are struggling for profits.

Attendance for these films is not only three times higher than for standard releases, but ticket prices are also $2 to $5 higher. Many action-film directors are now making movies in 3D format, and Imax's pipeline continues to grow by the month, with potential blockbusters that will likely lead to significant profit growth in the foreseeable future.