Often when a strong sell-off hits the stock market, the first stocks to go are the big momentum stocks that hedge funds often chase for performance and alpha. Right behind them you can often find the small-cap biotech stocks that have huge promise but do not fit well when there is a risk-off mentality. The recent sell-off, which totaled almost 6%, has presented some golden opportunities for more aggressive and less risk-averse investors.

The 24/7 Wall Street research data base is constantly being surveyed for top stocks to buy that trade under or around the $5 level. As we have said before, many Wall Street firms put very small or no emphasis on stocks trading at that level. They either have investment risk concerns or flat out cannot make any stock loan money on them, as many are not marginable.

Here are the top biotech stocks to buy that are trading near the $5 dollar level. We have updated coverage on stocks we have reported on before, and added some top new names to the list.

Array BioPharma Inc. (NASDAQ: ARRY) is a top name to buy at Jefferies. The company focuses on the discovery, development and commercialization of small molecule drugs to treat patients afflicted with cancer and inflammatory diseases, primarily in North America, Europe and the Asia Pacific. Its proprietary clinical programs include ARRY-520, a kinesin spindle protein inhibitor, which is in Phase II clinical trial for patients with multiple myeloma. The Jefferies price target for the stock is set at $8. The Thomson/First Call estimate is $7.50. Shares closed Thursday at $4.37.

Biodel Inc. (NASDAQ: BIOD) is a specialty biopharmaceutical company that focuses on the development and commercialization of treatments for diabetes in the United States. It is involved in developing proprietary insulin formulations for type 1 and type 2 diabetes patients; ultra-rapid-acting insulin analog-based formulations; and glucagon formulations and presentations for use as a rescue treatment for diabetes patients experiencing severe hypoglycemia or very low concentrations of blood glucose. Ladenburg Thalmann likes the stock and has a $6 price target. The consensus target is in line at $6. Biodel closed Thursday at $2.66.

Galena Biopharma Inc. (NASDAQ: GALE) may be the home run that biotech investors are looking for. The stock is Buy rated at Maxim Group and Noble Financial, which both recently raised their price targets. With an FDA-approved pain medication, a partnership with generic giant Teva Pharmaceuticals and a superior pipeline, the stock may be an acquisition target. After a huge rise, the stock took a hit when CNBC’s Jim Cramer urged viewers to take profits. The company also had a bear raid from a short seller that was quickly refuted by the CEO. The lowered price may offer new money a solid entry point. The Maxim price target is $11, and the consensus target is at $7.33. Shares closed Thursday at $4.27.

Novavax Inc. (NASDAQ: NVAX) makes the Piper Jaffray list of top stocks to buy for 2014 and is also a buy at Lazard and FBR Capital. The company also made our five big analysts stock picks for 2014 list. This clinical-stage biopharmaceutical company uses recombinant nanoparticle technology to develop vaccines for a variety of infectious diseases. The company presently has six vaccine candidates undergoing clinical trials, with a seventh (rabies) being readied for a Phase I study later this year. The big market sell-off has knocked the stock price down and offers an intriguing entry point for new money. The Piper Jaffray price target is $7. The consensus estimate is closer to $10.00, and the stock closed Thursday at $5.23.

Protalix BioTherapeutics Inc. (NYSE: PLX) is another name that could be a huge home run. The company currently has an FDA-approved drug and is in the process of developing its ProCellEx platform. ProCellEx is a modular cell culture platform capable of producing various biological drugs from plant cell lines; the current status quo in the industry utilizes Chinese hamster ovary, or CHO, cells. Protalix owns a proprietary platform — and numerous patents surrounding the processes involved — that could provide a way around the patent protection of numerous blockbusters, and it offers several compelling advantages over the industry standard. The J.P. Morgan price target is $7, and the consensus is $6.20. The stock closed Thursday at $4.24. A move to the target would be a 65% gain for investors.

Rigel Pharmaceuticals Inc. (NASDAQ: RIGL) got hit hard last fall when it cancelled a Phase II clinical trial for R333, which was being evaluated as a potential therapeutic for active skin lesions in patients with discoid lupus erythematosus. The company is a clinical-stage drug development company that discovers and develops novel, small-molecule drugs for the treatment of inflammatory and autoimmune diseases, as well as muscle disorders. Rigel’s pioneering research focuses on intracellular signaling pathways and related targets that are critical to disease mechanisms. The company currently has five product candidates in development. Jefferies likes the stock and has a $6 price target. The consensus is at $4.67. The stock closed Thursday at $2.88.

Synta Pharmaceuticals Corp. (NASDAQ: SNTA) is a leading oncology name to buy at Jefferies. The company is primarily focusing on developing its lead cancer drug ganetespib as a treatment for non-small-cell lung cancer, breast cancer and colorectal cancer. If approved, the drug is expected to hit annual peak sales of $425 million to $600 million. The Jefferies price target for the stock is a huge $19, and the consensus is at $15.85. Shares ended Thursday at $5.15.

Zogenix Inc. (NASDAQ: ZGNX) is a top name to buy at Oppenheimer and Leerink Swann for 2014. The FDA approved its top new drug Zohydro. The drug is a timed-release form of hydrocodone, which is one of the most highly prescribed pain medications in the world. The Zogenix drug contains no acetaminophen, which has been proven to cause liver damage. This is a boon to patients suffering from oncology related pain, as often radiation therapy weakens or damages the liver. The company also has a migraine headache treatment called Sumavel that is very popular and is gaining in acceptance among physicians. The Oppenheimer price target is $5. The consensus price target is $5.23. Zogenix closed Thursday at $4.22.

We always caution that these kinds of small-cap biotech are only suitable for very aggressive accounts. If clinical trials fail or operating cash runs out, small-cap biotech stocks can go out of business or end up as true penny stocks. With that in mind, all these companies have promising clinical trials and in some cases FDA-approved products already on or soon to come to the market. It is a worthwhile allocation of risk capital to place some on these emerging stocks.

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