This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

5 Stocks Under $10 Hedge Funds Love

DELAFIELD, Wis. ( Stockpickr) -- It's that time of year again when Wall Street's biggest players report their holdings to the public through 13F filings. Hedge funds and other large asset managers have filed all of their 13F forms with the Securities and Exchange Commission for the second quarter. These filings show which positions some of the smartest money managers are adding to and which stocks they are taking new positions in.

>>5 Stocks Poised for Breakouts

For the purpose of this piece, I want to focus on some low-priced speculative stocks that trade below $10 a share that the biggest players are jumping into here. These low-priced companies could have tremendous upside since some of the smartest guys in the game have deiced to take significant stakes per the latest filings. These names could be attractive at current levels if these managers have found an undervalued situation and their timing is right. Of course, these low-priced stocks also hold a great deal of risk, so investors need to manage risk accordingly.

Managing risk is important no matter what stock you're trading, but it's especially important in under-$10 names since they tend to be more volatile. When managing risk, it's important to use proper position sizing and to cut losses small if the trade goes against you. Remember, you can always get back into a stock at anytime if your first trade doesn't work out, so make sure to trade with the trend and manage that risk.

>>5 Toxic Stocks You Should Sell

Stocks that trade below $10 a share are highly speculative in nature. Many mutual funds don't even allow their managers to own stocks that trade below $5 a share since the risk is considered too great. That said, hedge funds can own whatever they want, and if they see value in a low-priced stock they will jump in with zero fear. They might know something the average investor doesn't, or they might have done extensive research that lead them to take a position in an under-$10 name. Whatever the reason, it's never a bad idea to put the under-$10 names the whales are getting into on your watchlist.

1 of 7

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,172.68 -107.06 -0.62%
S&P 500 1,994.29 -16.11 -0.80%
NASDAQ 4,527.6890 -52.10 -1.14%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs