Energy

5 Red-Hot Energy Stocks Under $10 With Substantial Upside Potential

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While most of Wall Street focuses on large-cap and mega-cap stocks, as they provide a degree of safety and liquidity, many investors are limited in the number of shares they can buy. Many of the biggest public companies, especially the technology giants, trade in the hundreds, all the way up to over $1,000 per share or more. At those steep prices, it is difficult to get any decent share count leverage.

Many investors, especially more aggressive traders, look at lower-priced stocks as a way to not only make some good money but to get a higher share count. That can really help the decision-making process, especially when you are on to a winner, as you can always sell half and keep half.

Each week we screen our 24/7 Wall St. research database looking for stocks rated Buy at major firms and priced under the $10 level. This week we found five new stocks that could provide investors with some solid upside potential.

While more suited for aggressive investors, and with the number of new traders skyrocketing over the past year and making good ideas to trade even harder to find, these could prove exciting additions for traders looking for solid alpha potential. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Energy Transfer

This top master limited partnership (MLP) is a very safe way for investors looking for energy exposure and income. Energy Transfer L.P. (NYSE: ET) owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with a strategic footprint in all the major domestic production basins.

This publicly traded limited partnership has core operations that include complimentary natural gas midstream, intrastate and interstate transportation and storage assets; crude oil, natural gas liquids (NGLs) and refined product transportation and terminaling assets; NGL fractionation; and various acquisition and marketing assets.

Through its ownership of Energy Transfer Operating, formerly known as Energy Transfer Partners, the company also owns Lake Charles LNG, as well as the general partner interests, the incentive distribution rights and 28.5 million common units of Sunoco, and the general partner interests and 39.7 million common units of USA Compression Partners.

Investors finally received the long-anticipated distribution cut last fall, which was a stunning 50%. However, investors still receive a stellar 8.91% yield.

The BofA Securities analyst has a sizable $11 price target for the shares, while the posted consensus target is $10.31. Energy Transfer stock traded mostly below $7 a share this past week.


Marathon Oil

This leading integrated oil and gas firm has extensive upstream operations. Marathon Oil Corp. (NYSE: MRO) operates through three segments. The North America Exploration and Production segment develops, explores for, produces and markets crude oil and condensate, NGLs and natural gas in North America.

The International Exploration and Production segment explores for, produces and markets crude oil and condensate, NGLs and natural gas in Equatorial Guinea, Gabon, the Kurdistan Region of Iraq, Libya and the United Kingdom, as well as produces and markets products manufactured from natural gas, such as liquefied natural gas and methanol in Equatorial Guinea.

The Oil Sands Mining segment mines, extracts and transports bitumen from oil sands deposits in Alberta and Canada, and it upgrades the bitumen to produce and market synthetic crude oil and vacuum gas oil.

Investors receive a 1.85% dividend. The Siebert Williams Shank price target is $11, and the consensus target is $9.32 Marathon Oil stock has traded near $9.50 a share in recent days.

Oil States International

This small-cap play could very well be a possible takeover candidate. Oil States International Inc. (NYSE: OIS) provides oilfield products and services for the drilling, completion, subsea, production and infrastructure sectors of the oil and gas industry worldwide.

The company’s Well Site Services segment offers a range of equipment and services that are used to drill for, establish and maintain the flow of oil and natural gas from a well throughout its lifecycle. It also provides services, including wireline support, frac stacks, isolations tools, extended reach tools, ball launchers, well testing and flowback operations, thru tubing activity and sand control, as well as land drilling services.

The Downhole Technologies segment provides oil and gas perforation systems, and downhole tools in support of completion, intervention, wireline and well abandonment operations. This segment also designs, manufactures and markets its consumable engineered products to oilfield service and to exploration and production companies.

The $7 Stifel price target compares with the $6.14 consensus figure and the recent share price short of $7.

Plains All American Pipeline

This remains a top MLP pick across Wall Street. Plains All American Pipeline L.P. (NYSE: PAA) is primarily engaged in midstream crude oil activities, including transportation, gathering, marketing and terminaling.

Top analysts feel the company deserves a premium valuation given its leverage to the Permian and attractive organic growth backlog. The company owns an extensive network of pipeline transportation, terminaling, storage and gathering assets in key crude oil and NGLs producing basins and transportation corridors and at major market hubs in the United States and Canada. On average, Plains All American handles more than 6 million barrels per day of crude oil and NGLs in its Transportation segment.

Investors still receive a 7.91% distribution. BofA Securities has set its price objective at $13. The consensus target price is $11.56, and shares have been trading a little above $8 recently.

ProPetro

This smaller-cap stock could be a solid play for aggressive investors. ProPetro Holding Corp. (NYSE: PUMP) is an oilfield services company that engages in the provision of hydraulic fracturing and other complementary services. It operates through the following segments.

The Hydraulic Fracturing segment intends to optimize hydrocarbon flow paths during the completion phase of horizontal shale wellbores. The Cementing segment provides isolation between fluid zones behind the casing to minimize potential damage to hydrocarbon-bearing formations or the integrity of freshwater aquifers, and it provides structural integrity for the casing by securing it to the earth.

The Coil Tubing segment involves injecting coiled tubing into wells to perform various completion well intervention operations. The Flowback segment consists of production testing, solids control, hydrostatic testing and torque services. The Surface Drilling segment offers cost-effective, preset surface air drilling services to target depths of approximately 4,000 feet in areas of fragile geology.

Stifel’s $10 price target is well above the $8.43 consensus target. The shares have retreated from $10 in recent days.


With West Texas Intermediate crude pushing through the $60 a barrel level, many on Wall Street are pounding the table on the sector as a go-to trade and place to be for 2021. These five stocks offer aggressive investors a way to play the sector plus get some solid share count leverage.

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