12 Analyst Stocks to Buy Under $10 With Massive Upside Potential

Stocks are looking for their footing after having hit new all-time highs in the prior week. Volatility has returned, but investors are looking at individual stock picks rather than just trying to ride a tired bull market. 24/7 Wall St. reviews dozens of analyst research reports each day of the week for new ideas for our readers.

We generally see many upside and downside stocks in these reports, but it seems that the low-priced stock trading under $10 often comes with massive upside potential in some of these analyst calls.

24/7 Wall St. would remind readers that low-priced and small cap stocks generally have more implied risk than most established stocks. Still, many investors are attracted to lower-priced high-volume stocks because they often think there can be more room for upside ahead. In fact, you often see upside price targets signaling implied upside of 50%, 100% or even more — something you almost never see in Dow Jones Industrial Average stocks.

In the consideration of risk and suitability, very few of these sub-$10 stocks would generally pass a “widows and orphans” suitability test. This is what brokers and financial advisors have to consider when it comes to ethics and suitability for clients.

These are the 12 analyst stocks we tracked this past week that were trading under $10 and have huge implied upside in their research reports.

Apollo Investment Corp. (NASDAQ: AINV) was raised to Buy from Neutral with a $10 price target (versus an $8.56 close, and versus an $8.83 consensus target at the time) at SunTrust Robinson Humphrey on Wednesday. Keep in mind that this is one of the controversial business development companies that yields more than 9%. Now the consensus price target is up at $9.05, and the $8.72 close implies upside of almost 15% — plus the 9.2% yield.

DHT Holdings Inc. (NYSE: DHT) was started as Buy with a $10 price target (versus a $6.64 prior close) at Canaccord Genuity on Wednesday. The firm noted that the company has double the hull and double the ton, and fortunately the stock was up only a penny higher to $6.65 by the time Friday’s close rolled around. This implies upside of 50%.

Groupon Inc. (NASDAQ: GRPN) has had a hard time finding many fans, but B. Riley has jumped on board of the daily deals site. Groupon was raised to Buy from Neutral on Tuesday with a $9.50 price target. This was compared to a prior $6.45 close, and shares were up another 1% to $6.58 on Friday, which still implies potential upside of 44% if the firm is right. That $9.50 price target is almost $1 higher than the Groupon consensus price target.

Halcon Resources Corp. (NYSE: HK) was our first stock pick to double in 2014 that managed to actually double. SunTrust Robinson Humphrey said on Thursday that the recent pact with Apollo and its East Texas fields sale earlier in the year should boost the oil and gas producer’s output. SunTrust raised its price target from $9 to $10. The Thursday close was $7.08, but the stock closed down 4% at $6.78 on Friday, now leaving an implied upside of almost 50% if the firm is right. Keep in mind that analysts have chased this up all year, and the current consensus price target on Halcon is still just shy of $7.

Halozyme Therapeutics Inc. (NASDAQ: HALO) was started as Overweight by J.P. Morgan on Friday. The $13 price target compared to a prior close of $9.29, and shares were up 5% to $9.77 on Friday. This target of $13 is almost $1 under the consensus price target, but it implies 33% upside.

Joe’s Jeans Inc. (NASDAQ: JOEZ) reported a 56% increase in sales, and at least one firm liked the news. B. Riley raised its rating to Buy from Neutral, and the price target was raised to $1.70 from $1.30 in the call. Even with a 20% gain on Friday to $1.24, that implies upside of 37%. Note that the price target is not even at the $1.90 high seen over the past year.

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Model N Inc. (NYSE: MODN) made the under $10 analyst calls by the hair on its chinny chin-chin because the stock closed at $9.98 on Friday after a 2.5% gain. On Thursday came word that Northland Securities started coverage with an Outperform rating and $13 price target. The prior close was $9.71, but this still leaves implied upside of 30% for investors.

Tsakos Energy Navigation Ltd. (NYSE: TNP) was mentioned positively by Canaccord Genuity in a shipping call this last week. The firm said there is a little bit of everything for investors here and started coverage as Buy with a $9.50 price target on Wednesday. This was versus a $6.63 prior close, and the close on Friday of $6.86 still leaves almost 40% of implied upside.

Turtle Beach Corp. (NASDAQ: HEAR), or Parametric Sound, was able to get the insiders to extend their lock up of approximately 72% of the shares (30 million) from July 16, 2014, to April 1, 2015. Lake Street Capital Markets already has a Buy and a $23 price target from May, but the firm noted that clients should be buyers on the news without issuing a new detailed report that we saw. The stock was up 7% to $8.80 on Friday after the lock-up news was issued.

Verastem Inc. (NASDAQ: VSTM) presented results and showed its updated development plans at annual research and development day this week showing that its lead cancer stem cell inhibitor VS-6063 continues to show promise. After a nearly 2% gain on Friday to $8.64, Deutsche Bank reiterated its Buy rating with a $14 price target. This implies 62% upside. Now consider this: that appears to be the lowest price target of the eight analysts that cover the stock.

Warren Resources Inc. (NASDAQ: WRES), an independent energy player, was maintained as Buy at Brean Capital on Tuesday. What stood out here was that the price target was raised to $8 from $6, implying upside of more than 30% for the small cap exploration and development interest holder.

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Yingli Green Energy Holding Co. (NYSE: YGE) was part of a broader solar call from Deutsche Bank this week based on continued solar recovery in the United States and China, and it appeared to be the only sub-$10 solar stock we covered in the call. This is the world’s largest photovoltaic module manufacturer in terms of production capacity and shipments, and the firm had a $6 price target on the stock, versus a consensus price target that was much lower at $4.89 at the time. When you consider the prior closing price of $3.17, Yingli had close to 90% upside at the time. Shares closed at $3.22 on Friday, but the 52-week high is $8.77.

Here are last week’s 13 analyst stock picks under $10 with huge upside, including Amicus, Alcatel-Lucent, Enphase, Glu Mobile, MannKind, Merrimack, Sequenom and more. Friday’s top analyst upgrades and downgrades included Apple, Altria, Gap, Marathon, Qualcomm, Shell, P&G and more.