3 Robotics Stocks Under $10 With Massive Upside

These were some of the hottest stocks in the market [music] last fall, but they've pulled back significantly this summer and are now trading under $10. [music] Joining us today is MarketBe analyst Chris Marott with a list of three robotic stocks, all under $10, that are showing significant signs of upside ahead. Chris, I'm excited to to revisit this topic because we were talking about robotics quite a bit all of last fall and early on this year, but we've kind of seen this sector struggling for really the last 6 months or so. Why is that? >> There's a couple of reasons going on. Um, number one is that a lot of times, like we've seen with space stocks, the story gets ahead of the stock price a little bit. Retail investors flood into a certain sector because they're expecting those 2x, 3x, 5x, 10x gains that they're projecting are going to happen right away and then they don't happen right away. And so some retail investors decide to walk away from the stocks. And I think in some cases, especially, and this is a really good point, Bridget, for these three stocks in particular, institutions treat them a little bit differently, you're going to see that none of these stocks have very high institutional ownership. A lot of institutional funds, exchange traded funds, etc. have rules against buying stocks under a certain price or they get flagged by risk committees. It creates an inefficiency. So, some of these names you can say haven't necessarily been fully discovered by the big allocators yet, the ones that have the opportunity to move the stock price higher. >> And all three of these names, Chris, have been trading above $10 over the last 52 weeks because they are nowhere near their highs at the moment. But now, some of these have pulled back significantly, trading even closer to $5 than $10. I do want to address in this video too before we get started with these names, is this concept of looking for stocks under a certain dollar point. We do lots of videos like this uh largely because lots of you like to see them and are interested in stocks under a certain dollar value. Let's talk about whether the the entry price and the dollar value of that entry matters or not. >> So the honest answer is the price tag itself isn't necessarily the case. I mean a $7 stock isn't inherently cheaper than a $700 stock. What matters is, and we've said this word before, it's the valuation relative to the overall business. So, having said that, many retail investors, they only have maybe a few hundred to invest or less at a given time. Finding stocks under $20 or in this case, under $10 can allow them to buy a meaningful amount of shares with just a little bit of money. And that changes the psychology of ownership because you are owning a piece of the company when you own some shares. And so people may pay more attention to a stock that they can have a more meaningful position in. Now the second part of that question though, Bridget, fits very well in the area that we're talking about today, which is robotics. And that's where I was just saying some of these stocks don't have a lot of institutional interest. So retail investors can have a can have an opportunity to load up on shares before the institutional money arrives. We've seen that with a stock like Palunteer. I'm not comparing any of the stocks we're talking about today to Palanteer, but I'm saying that dynamic happened with Palunteer. Retail was buying the stock heavily before the institutions ever got involved. And then once the institutions got involved, Palunteer got on a rocket ship because that's where the real meaningful price discovery can happen. >> Yeah. And I think that's why a lot of viewers like to see these stocks that are under $10, too, because oftent times they are those early growth stocks that have a lot of growth potential like you're just describing and you're getting in early on a stock that has potential. But that does also mean lots of volatility. And you were going to see that show up extensively in all three of these charts today where they have had a lot of volatility. They're nowhere near the highs that they once were. If you own any of these stocks, you have no doubt been checking your portfolio constantly to see how they're growing or shrinking over time. And hopefully they're growing, of course, but that's not always the case with these small companies. But how often are you actually checking your overall financial picture and how that's changing over time? A big thank you to Monarch for sponsoring today's video. Monarch helps to bring all of my finances, my bank, my credit card, my bills, and my investments all into one clean dashboard so I can really get a full picture of my net worth and my financial situation. But it also helps me stay upto-date on how that financial picture is changing week to week. I started looking at my weekly recap at the start of every week to get a really good pulse on where my spending and income was the week before. And that gives me a better idea of what I need to do to meet the goals I have for the week ahead. Monarch syncs with over 13,000 institutions across the country. And it's completely private and secure. So all of this data and this analysis is for my eyes only. But it's built in a way that makes my own financial picture look so much clearer. If you'd like to try out Monarch's weekly recap feature for yourself, you can scan the QR code or click the link in the description. I've been using this app for many months now and it has truly changed the way I think about my own finances and it's helping me stay accountable for my goals and my future. I have found it is absolutely worth investing in your full financial story, not just your investments. All right, Chris, let's get right to your list today. What's that first robotic stock that you are looking at that still has a lot of upside and is currently trading under $10? >> We are looking at Mobile Eye. This is a company that's involved in robotics as it relates to autonomous driving. Mobilei is one of the established players here. That means they have real revenue. They have real relationships with the automotive companies. They have decades of experience in autonomous self-driving. But the stock has traded down into the single digits. >> Yeah. What's behind that pullback, I think, is the question that most investors have because the stock was on a really good run for a while, but in the last year, it's now down 34%. What's behind that number? >> Investors got impatient with the pace of autonomous driving and how it's becoming commercialized. I don't think anybody's denying that this is starting to pick up steam, especially if you live near or around a major metropolitan area, but the pace of it is still overall it has not happened as quickly as people were expecting. Again, the story got ahead of the stock. Um, Mobileite took a hit when they were at CES earlier this year. They didn't show enough new commercial progress relative to the competitors. And then in the latest earnings report, their CEO uh announced plans to step down. And so once they, you know, once they appoint a successor, he'll step down. That leadership uncertainty also is weighing on the stock right now. >> Yeah, a big change in leadership can absolutely lead to a downfall like we're seeing in the stock right now. But let's talk about opportunity now. Talk about uh what those analysts are saying. And there's quite a bit of analyst coverage on this one. And right now it looks like there's a really impressive upside. >> It's interesting the stock has gone down even after the company delivered a a really a pretty good earnings report, you know, back at the end of July. Um they again, this is a profitable company, so we're not talking about one of these companies that's pre-profit. The growth wasn't that strong year-over-year in terms of revenue, but they did beat their consensus estimate. So that was good. But the analyst community, uh, they do have a price target of $12.64. That's a meaningful upside about 43% to the current price. The overall consensus rating is a hold, but you're seeing a lot of these price targets at or around that consensus target with Tigers Financial, even though they lowered it from 25 to 18. 18 is still well above that consensus target. >> Yeah, there is definitely upside in this one. and that earnings report is so good to point out that the stock is still down even though the earnings show some positive signs here. So, I think this is one where it's a really good time to be looking at the stock, especially given that it's still on this dip. Let's talk about a timeline of how long do you think it will take for this stock, but also really this sector to gain some more traction and get that excitement back to to help drive the stock price a little higher. >> Well, I I think you're going to need to see um at least several quarters to for this to happen. And and the reason for that bridge is because this is the the company's now kind of in that show me mode. They're going to investors are demanding more. They're they want to see more from this company. The company has ambitions to get into the robo taxi space. Some investors are skeptical of that because right now in the US it's kind of like you got Whimo, you got Tesla. Is there room for another company to come in in a meaningful way? They're not sure. Some of that may get cleared up when the leadership uncertainty dissipates, but this is definitely a stock that looks like it's going to have some headwinds. However, if you believe in the, you know, in the business model for the company that analyst price target showing a 43% upside, that's that's kind of hard to ignore. >> Yeah. And there's even higher upsides on the next couple of stocks that we're going to cover. I also think not only just believing in this stock, but also believing in that robotic story is a big piece of this. If you're an investor who who believes that the the long-term growth story robotics that that's where the market and investment and innovation is going to be turning, these are all names that you want to be looking at. And these are just three of a large group of stocks that are all working to serve that robotic story. We have actually a special report at MarketBe that we put together of seven of the best robotic stocks that investors should be looking at if they are interested in robotics and believe in the thesis that there's a lot of that AI story is going to turn to robotics over the next couple of years. These are seven other names that you want to be interested in and looking at right now. You can scan the QR code or click the link in the description to get that report totally free right now. It's normally $30, but because you're watching this video, you can get that special offer to check out that report right now for free at Market Beats. Okay, Chris, let's move on to that second company that you are looking at right now. This is a name that some investors might be familiar with, might be newer to others, too. >> This may be one that's the least familiar to our viewers, but it's Paladine AI. ticker symbol is PD YN. It's the purest embodied AI play of all three of these. So the company, they build software that lets robots such as defense hardware, mobile platforms, industrial arms perceive their environment and adapt in real time instead of just running pre-programmed motions. The platform is called Paladine IQ. Um, it's designed to sit on top of third-party robotic hardware rather than Paladine building the robots themselves. So, that's good from a from a capital expenditure standpoint. We're not talking about a company that's building robots like Tesla's building Optimus. This is this is a company that's building software that's actually going to uh essentially orchestrate with what companies have already done and sort of train the robots themselves. Yeah, that sounds like a unique moat where they're not investing all of the capital and energy into building their own robots, but they are kind of that supplier for other companies that are doing all of this robotic development right now. So, I think that is an interesting part. Kind of reminds me of Redwire in the space story where all the other companies need to use what they are doing. But I do wonder if there's more competition in this area. You know, there's so much innovation happening right now. Right now, Paladine Software is is one of the better ones for these robotics company, but is there another company that could come up with an even better, you know, system than what Paladine has? >> Yeah, they they do have some competitors in the space. Now, again, a lot of the competitors that they have in the space are in a similar boat to Paladine. We're talking about small cap companies um that are going to be in that area of light revenue, not profitable yet. So, they're not it's not like they're an upstart in that regard. they're kind of playing in a group with their peers. It's just going to be depending on which ones can stand out. Where Paladine has stood out recently is in some defense contracts and that's what's been helping drive revenue for them. >> Now those defense contracts, we're not just talking about robots or humanoid robots that people might be picturing. Robots also applies to drones and other any kind of autonomous vehicle. Correct. >> Correct. I mean, in in fact, specifically, uh, Paladine has contracts with the Air Force Research Laboratory that's focused on getting different autonomous systems to work together. So, that's that's exactly what you're talking about, Bridget. That's what they're trying to do. And it's important work because it's that it's that orchestration layer. >> Interesting. So, we understand what the company does and who they're working with, but let's look at some of those statistics regarding the stock itself, too. One thing I'm seeing is there's not a ton of analyst coverage here. But of the analysts who are covering it, really good upside. This one's more uh 72% on consensus. So that's uh even more upset than the first stock that we talked about. But are you concerned at all that there's not as many analysts actually covering this company? >> I'm not because you're talking about a very small company and it's expected right now that there it's there's not going to be a lot of analyst coverage on this until there's more institutional uh interest in it. And the company's last earnings report, which was just in very early August, I think it was August 6th, actually was the date of the report, that kind of bears it out. Revenue was very strong on a year-over-year basis, they they came in with a lot more revenue than was forecast. Was significantly higher year-over-year, but on the other end, they had a bigger loss than analysts were expecting in terms of, you know, adjusted earnings per share. That was a high bigger loss than what was expected. So, right now, analysts have a consensus rating of hold on the stock. But again, these are stocks that they're speculative in nature and um you know, you're going to have to be holding these stocks and holding them with a long-term mindset to see what happens. >> Yeah, speculative nature shows up in their short interest as well. This one has over 20% of the float as short interest. Any concern with short interest with this stock and really the other names that we're talking about today? I feel like short interest in these speculative smaller companies kind of go hand in hand. >> Yeah, I I think you're right, Bridget. What I would always say to investors who are going to be interested in a stock like Paladine is understand that it's there and understand that it can do two things. On the one hand, it means that without a lot of institutional ownership in this stock, it's going to be a lot of traders that can be pushing down on the stock and it can make it a heavy lift for a retail investor who's just interested in buying and holding for the long term. So, you're going to have to realize that's going to lead to some volatility in the stock potentially negatively. But that volatility can also work to your advantage because if the company delivers a good report or if some news item comes out about the company that people aren't expecting, that could be the fuel for a short squeeze that you could start seeing, you know, the stock go up a lot as shorts have to cover because in this case, the short interest would take 6.7 days to cover. So yeah, you could you could see a situation where this stock could have that fuel for a short squeeze. But again, if you're looking to own the stock as opposed to trading the stock, it's more just something to be aware of. >> Now, this is one that I am considering putting onto the Bridges watch list, but I think I'm going to hold out for the last stock that you were talking about today. If you're not familiar with Bridget Spies, this is my paper trading watch list, and I try to pick one stock per video to talk about to add to this watch list. These three names are all three new names. None of them are on my watch list yet. But the last stock you have on your list today is one that I have wanted to add to the watch list for a while because it is an intriguing idea. It's a stock that's had a lot of really big run-ups and a lot of really quick pullbacks, too. So, the volatility is also there and so is the short interest on this name. But, I'm going to I'm going to steal your thunder and announce that last stock which is on this NDS. I have been waiting to put this one on the watch list for a while because I think that its story is very interesting, but there's some real uh real risks here, too, that we need to talk about. So, let's get on to this last name, Chris. >> So, you set it up perfectly, Bridget. It's on, you know, you and I recently did a video on three drone stocks. And I don't always pay attention to the comments, but I did look at the comments on that video, and some people were saying, "Why didn't you include?" Well, here you go. If you if you were looking for Andis in that video, you're getting it in this one. And yes, this is a drone company. I mentioned in that video, there were more than three names you could talk about. Certainly, if we had expanded it out to four or five names, and would have certainly been on that list, but this is one name that you're going to look at. And the reason why you're talking about it, Bridget, yes, is in that drone and counter drone technology. We mentioned it on that video, Bridget. The reason why you want to get involved in this is that massive spending uh in the proposed Pentagon budget that will be approved at some point. I'm very confident of that and that's going to be the fuel that's going to start seeing these contracts get released and a company like Andis can benefit from that. >> Yeah. Let's talk about drone versus robotics. I know we did a video specifically on drone stocks and everyone knows Andis is a drone company, but how does that fit under the robotics story as well? >> Yeah, I mean I I I think it's it's it's a robot by another name. I really in my opinion the whole pre premise of the drone is the fact that these are unmanned systems. They can be directed to do to perform certain tasks. To me, there's really you're you're kind of splitting hairs if you're trying to say one is robotics and other is not robotics. I think it's all in the same pot. >> Yeah, that's a very good assessment. I I think people should know drones really are robots. It's very much all the same thing about that autonomous taking AI and putting it into the body of something. And that is where uh where this fits very well into this category. So, let's talk about where And stands compared to some of those competitors we mentioned last week in our drone video. There's a lot of different drone companies out there. What sets Andis apart? >> Well, right now, what sets it apart is the the fact of the revenue that they're generating because they're generating a lot more revenue than some of these other companies. Um, you know, again, there's a defense play to it as we've brought up. Um, but the company also, uh, they've also got some, you know, they they've also got some commercial contracts coming out. One that I found really interesting is they have a they they landed a counterdone project to protect the stadium of the NFL's Jacksonville Jaguars. That's very interesting. But that's not the primary driver of their business right now. It would be in the defense in the defense industry right now. That's only in the tens of millions of dollars. We're not talking about billions of dollars, but still that tens of millions is more revenue coming in than some of these other companies that we've talked about. This chart is also so different than the other two stocks that we had uh in this video today. That's because it's still up over 175% in the last year. So, this one has still seen significant gains even though it's nowhere near its highs. This stock really has flown to some big highs a couple of different times throughout the last year. But, this stock uh has had a really big range in the last year and it's still up significantly compared to where it was last year. Uh does that also set the story apart that we've already seen so much growth here? >> Again, I think this is just a question of the the stock the story got ahead of the stock. This this is a company that is trying to grow through acquisitions, but that that weighs on the company's near-term profitability because it's causing some dilution um when they're having to use equity to fund the acquisitions. Um, and so that's something that a lot of investors, especially in this year, a lot of investors have just said they they just don't want to deal with that right now. >> Well, let's talk about what analysts are saying about this company because that's also what stands out as an investor looking at this as a a potential. Upside is pretty great. Over 70% upside still expected for this company even after it's run up, you know, 175% in the last year. But there's not a ton of analyst coverage and the company is about a $5 billion market cap company. Why are we only seeing a few analysts covering this name too? >> Well, I think again that that goes back to the point that I made at the beginning of the video that we're going we're talking about institutional ownership. The stock's only owned by about 37% of the institutions. Um, we're talking about in the last 12 months about 780 million went into the stock. But that's substantial when you say that about 150 million was sold. So it's what about a 5:1 ratio of money going in as opposed to going out. So the institutions that are are that are involved in the stock are bullish on it which is good and I think that shows up in the analyst sentiment. I mean to have 10 analysts covering the stock is not bad for a five something you know 5.4 billion market cap and and of the three stocks that we've looked at today this is the only one that has an actual moderate buy rating. So, uh, analysts believe that where it's at now could be a buy. >> Yeah. There's a couple other things to point out with this name and that is the earnings are coming up, you know, this week. And so, we've seen a nice little rebound for the stock. It was trading even lower just a couple of weeks ago. Do you think that it's running up to earnings and could we see an earnings miss? This this video is going to be posting right before earnings actually come out. So when it comes to a smaller company like this that already has seen so much volatility, can you see some sharp moves on earnings? Whether that's really good ones, if there's something people like in that report or a really negative reaction if the report isn't as strong as people were hoping for. >> Oh, I absolutely think so. That's the risk you're taking in investing in these small cap stocks is just there's that volatility that's going to always be very close to the surface and it can explode when you are talking about earnings reports. And you're right, Bridget, to say that in the last month, the stock's up 31%. In the last five days, it's up about 9%. So that means there's a lot of interest in earnings. I think there's a lot of people that are trying to frontr run what they feel might be a might be a good earnings report. And if they don't deliver on that, that could have a very negative impact. On the flip side, on the flip side, what we were just talking about with Paladine, Andis has short interest of over 40%, 44%. And that's down that's down by 16% in the past [clears throat] month. So it was even higher before that. So that also does set the condition that some traders may be looking at and thinking if outperforms in their earnings, this could create the this could create an environment for a very sharp move higher and causing some of those short positions to have to cover. >> Yeah, I do have to say I think this is the highest short interest stock I've ever added to that watch list. Uh, and it's something that I think investors should absolutely pay attention to because to me when I see a short interest that high, it just means the potential for volatility here is pretty large right? >> It is. Exactly. And what I always like to say is it's it's the two numbers you want to be looking at is it's the short interest and the institutional ownership because that means that's a lot of retail that's trying to short the stock because institutions are clearly not. Institutions are buying more than they're selling. So there's not a heavy short bet on the institutional side. This is retail investors and that can cut both ways very fast. >> Yes. And retail has been so interested in the drone sector. Uh I have also been very interested in the drone sector because of what you mentioned and that's all of this defense money, all of this federal money flowing into this area. Uh and that's what everybody's waiting on. And I I I think you're right, Chris, that once we do get that announcement of that this is the official amount of money coming for that funding and those contracts start getting secured and the money actually goes out, I think that's when we're going to see a resurgence of some of those analyst expectations here that the analysts are very bullish on drone stocks. A lot of retail is very bullish on drone stocks for that reason, but we're all just waiting to see when is that going to happen. So, there is a chance for some some bigger moves to the upside in this whole sector. This is one of the stocks that could benefit. But you are also very right, Chris. We could have a a little miss in earnings this week and the stock could pull back significantly from where I am going to be having this entry point in the stock on my watch list. So know that as an investor, this is one that's going to be very volatile, but it is also a very interesting name. Any other thoughts to share, Chris, on any of these robotic stocks that have seen a pullback that are having some short interest about playing the long game and and not so much worrying about that short-term volatility? >> You know, first of all, Bridget, I would say I would probably if I were putting something on a paper trading watch list, I'd probably go with 2. And I think this is a sector robotics. It's one of those it's one of those areas where there is room for every investor to get involved with this sector but you have to be you know you you have to be smart about it you know manage your position size and you know look at it optimistically again I think you're looking at a sector that it's it robotics is something investors have been talking about for 20 years and it took a long time for that infrastructure to start getting built out. We're still building out that infrastructure, but now investors are starting to see it happen at a more accelerated rate and that's the fuel that these stocks need. This is a big area and um not a not all these stocks are going to be winners, but I think you're looking at three today that have a really good shot to make positive gains for investors. But you're going to have to be patient. >> And patience is the name of the game with any of these early growth stocks. Chris, thank you so much for bringing these three names to us today. If you like this concept and you like looking at early growth stocks that are all under a certain dollar value, we do a lot of videos just like this. This is the most recent one we've done. Make sure to watch that full video here and get some other stock ideas that are trading below that $20 value. You can watch that here.