Hidden Stock Gems For Less Than $10

I added to my position in Imax on Dec. 12, and since then, shares are up 50% to $4.45 in less than three weeks.

Since taking over this newsletter more than two years ago, I have never seen more quality names trading for under $10, including Manitowoc (MTW Quote), Ashland(ASH Quote), Focus Media(FMCN Quote) and Dry Ships(DRYS Quote). There are many stocks in this range that were traded above $50 earlier in the year. Also, roughly 20% of the S&P 500 now trades under $12 -- which is the largest amount that I have seen at least four years.

The market will become increasingly difficult to navigate in 2009 as the Fed uses quantitative easing (measures never used before) to stimulate growth. Also, economic data will get worse before it gets better; financial companies are still not lending; and most companies have provided little guidance heading into next year.

However, there are huge opportunities that lie ahead that sometimes are provided only during bear markets. In fact, Apple(AAPL Quote) and Potash(POT Quote) were both trading under $10 in 2002, the last time we saw global growth slow to 3% or less. Both of these stocks hit $200 at their peak. While it is nearly impossible to buy at the low and sell at the absolute top, these examples highlight the opportunities that are available in the single-digit universe.

Janus Capital(JNS Quote), Dry Ships(DRYS Quote) and Huntsman(HUN Quote)are currently on the watch list of the Stocks Under $10 service.. For a holiday offer of a $149 annual subscription through Dec. 31, click here.