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Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Stocks Under $10 Hedge Funds Love

Paulson's hedge fund took a new position in MTG after buying 17 million shares worth $84.15 million at an average price of $3.46 a share. Paulson is already up big on this position, so there's no telling how long he plans to keep it. That said, shares of MTG are in a strong uptrend despite its short-term weakness, so it's worth putting on your radar.

From a technical perspective, shares of MTG have recently pulled back from its recent 52-week high at $8.16 a share to right above its 50-day moving average of $6.71 a share. This stock could have more to go on the downside if the market doesn't bounce soon, so I would watch to see if it finds support either at its 50-day, or at $6 to $5.50 a share. Those second levels are the range lows from earlier this summer, so watch to see how it acts here at the 50-day, and then near those second levels if MTG continues lower.

Kodiak Oil & Gas

Another under-$10 name that Paulson is jumping into here is Kodiak Oil & Gas (KOG), an independent energy player engaged in the exploration, exploitation, acquisition and production of crude oil and natural gas in the U.S. This stock hasn't done much so far in 2013, with shares up by just 7.6%.

Kodiak Oil & Gas has a market cap of $2.53 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 25.41 and a forward price-to-earnings of 9.53. Its estimated growth rate for this year 40.4%, and for next year it's pegged at 51.5%.

>>5 Stocks Rising on Big Volume

Paulson's hedge fund added a new position here with KOG after buying 14,958,400 shares between $7.47 a share to $9.07 a share, with an average price of $8.45 a share. This company has been rumored to be a takeover target, so Paulson could be speculating on just that.

Another legendary hedge fund manager that's loading up on some under-$10 stocks here is David Einhorn. Einhorn is the founder and president of Greenlight Capital, a long-short value-oriented hedge fund, which he started in 1996 with $900,000. Greenlight has reportedly produced about a 20% annualized return for investors, which has helped him achieve a net worth of $1.25 billion.

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