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We recently published a list of 10 Worst Affordable Stocks to Buy Under $10. In this article, we are going to take a look at where ASE Technology Holding Co., Ltd. (NYSE:ASX) stands against other worst affordable stocks to buy under $10.
Will There Be a Small Cap Resurgence in 2025?
On February 18, Chris Clark, Chief Executive Officer, Co-Chief Investment Officer, and Francis Gannon Co-Chief Investment Officer, Managing Director at Royce Investment released their research on Small Cap stocks. The report explored the potential resurgence of small-cap stocks, emphasizing their relatively attractive valuations, promising earnings outlook, and the role of heightened market volatility. The experts highlighted that historically, small-cap stocks have outperformed large-cap stocks over the long term but with higher volatility. However, this advantage has eroded recently, with large-cap stocks dominating performance since 2011. Small-cap growth fared better than value during this period, but 2024 marked the eighth consecutive year of underperformance for small-caps relative to large-caps.
Royce Investment remains optimistic about a small-cap resurgence in the current year. They highlighted that one key factor supporting small-cap leadership is valuation. Small-cap stocks are currently trading at their largest discount to large-caps in over 25 years based on metrics such as enterprise value over earnings before interest and taxes. This valuation disparity is across the board including sectors like Information Technology, Industrials, Financials, and Consumer Discretionary. The report noted that while mega-cap companies may be overpriced, numerous bargains exist within the small-cap universe across diverse industries. These attractive valuations provide a compelling case for small-cap stocks to regain market leadership.
Moreover, earnings growth prospects further enhance the case for small caps. Consensus estimates for 2025 project an 89.3% earnings-per-share growth for the Russell 2000 index compared to 30.9% for the Russell 1000 index. The CEO and CIO of Royce Investment highlighted that while this rebound partly reflects recovery from a two-year earnings recession in small-caps, it underscores their potential for significant growth. Investors should focus on an investment approach that focuses on companies with established earnings histories or clear catalysts for future earnings growth.
The report acknowledged that external factors like tariffs and de-globalization trends may create short-term disruptions. However, the fund sees these developments as opportunities for the US-focused small-cap companies to benefit from reshoring and improved supply chain management. The firm welcomes volatility as it often distracts investors from fundamentals, creating opportunities for active managers to identify undervalued companies with strong long-term prospects.
Our Methodology
To compile the list of the 10 worst affordable stocks to buy under $10 we used the Finviz stock screener, Seeking Alpha, and Yahoo Finance. Using the screener we aggregated a list of stocks trading under $10 with a Fwd P/E under 15 and earnings growth expectations this year. Next, we cross-checked the Fwd P/E and earnings growth for each stock from Seeking Alpha and Yahoo Finance. Lastly, we selected the least popular stocks among hedge funds and listed them in descending order of the number of hedge funds that hold stakes in them, as of Q4 2024. Please note that the data was recorded on March 26, 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Is ASE Technology Holding Co., Ltd. (NYSE:ASX) the Worst Affordable Stocks to Buy Under $10?
A close up of a high-tech chip, intricate details of its single layers visible.
ASE Technology Holding Co., Ltd. (NYSE:ASX) is a Taiwan-based company specializing in semiconductor assembly, testing, and packaging services. It operates through three main business areas including Packaging and Testing Services, Electronic Manufacturing Services, and Investment Business.
During the fiscal fourth quarter of 2024, ASE Technology Holding Co., Ltd. (NYSE:ASX) delivered NT$162,264 million in revenue indicating a slight increase of 1% year-over-year. In addition, the net income decreased during the same time to NT$9,312 million. While the ATM segment of the company grew 7.8% as compared to the last year, however, the EMS segment led the overall progress down by declining 5.4%. It ranks as one of the worst affordable stocks to buy under $10.
Regardless of the short-term challenges management provided its guidance for Q1 2025 and the full year, reflecting strategic expectations. It expects ATM Revenue to grow next year by mid-single digits, driven by increasing demand for advanced packaging and testing services, particularly in leading-edge technologies. Moreover, the gross profit margin for the segment is also expected to recover to the structural target range of 24% to 30%, supported by ramping up leading-edge capacity in the latter half of the year.
Overall, ASX ranks 2nd on our list of worst affordable stocks to buy under $10. While we acknowledge the potential of ASX as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ASX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
