With stocks at or close to all-time highs, many investors are looking for new ideas and other stocks that may be lesser known than other big names. 24/7 Wall St. reviews dozens of Wall Street analyst reports and boutique research reports each day, which means we generally see hundreds of research calls each week. The idea is to find new trading ideas and investment ideas for our readers. Some calls cover stocks to buy, and other calls feature stocks to sell.
The search for value often ends up in a different category of undiscovered stocks. These are also frequently in the $10 and under share price category. Many investors believe these stocks under $10 have much more upside than traditional DJIA and S&P 500 stocks.
24/7 Wall St. wants to make more than just the standard caveats that investors need to consider. Some of the analyst calls in stocks under $10 have upside projections of 50%, 100% or even exponential upside to the stated price targets. That doesn’t exactly sound like a normal expectation or risk-reward scenario for most stocks.
We also want our readers to know that low-priced stocks and small-cap stocks generally come with much more implied risks than the traditional large cap or DJIA stocks. Almost none of these low-priced stocks would pass the old “widows and orphans” suitability tests by almost all counts. Another warning should be made here as well, and that is that many speculative analyst stocks do not live up to expectations — and some of them can crash and burn.
We have included a summary of each research call of these top stocks under $10. Also included was a relation to each company’s trading range or the consensus price target to the current prices, and color has been added on each. These were the top analyst stocks to buy under $10 seen in research calls issued this last week.
Callon Petroleum Co. (NYSE: CPE) was technically above $10.00 by the end of the week, but only by six cents and the stock hit $9.99 at one point on Friday. Earlier this past week, Callon was reiterated as Buy and the price target was raised to $17 from $15 at Canaccord Genuity after the company made an accretive acquisition analysis. A move to the target price would generate gains of close to 70%.
Groupon Inc. (NASDAQ: GRPN) was raised to Sector Perform from Sector Underperform at RBC Capital Markets on Wednesday. This may not seem like much on the surface, but getting the equivalent of a Sell rating at other firms caused a move upward. The stock was at $7.06 before the news and rose to as high as $7.28 the day of the upgrade. Unfortunately, Groupon fell at the end of the week and was at $6.82 when the dust settled on Friday. RBC’s price target was raised to $6 from $5 in the call, so now there is less downside perceived — although Groupon’s consensus analyst price target is $7.28.
READ ALSO: Why Two Analysts Became Nervous About Apple and iPhone 6
Glu Mobile Inc. (NASDAQ: GLUU) was named as a potential double after looking at a Cowen report on mobile gaming. This stock remains one of the firm’s top investment ideas going forward. The company is now reaping the success of the moves that it made in its past product cycle to monetize its games in a better and more efficient manner. Its strategy of focusing on leveraging platform strength and creating long-term gaming franchises has proved profitable. Other moves are helping move it along with the fantastic success of the Kim Kardashian: Hollywood game. The Cowen price target is $10, and the consensus target is $7.92. The stock closed at $5.02 ahead of the report, and shares closed at $5.17 on Friday. A trade up to the Cowen target would still be close to a double.
IntelliPharmaCeutics International Inc. (NASDAQ: IPCI) was given a monster call, and its shares reacted accordingly. Maxim Group raised its rating to Buy from Hold and raised its price target to $7 from $3 in the call. That was against a $2.71 prior call, and the Friday gain was almost 16% to $3.13. If Maxim is correct, this represents more than a double, even after the big pop.
Orexigen Therapeutics Inc. (NASDAQ: OREX) was named as one of the top new biotech picks by Credit Suisse this past week. It was started with an Outperform rating and target price of $10. After closing at $6.00 on Friday, this implies a whopping 66% upside if the team is right. That $10 target price compares to a consensus price target of $9.75 and was based on a discounted cash flow of Contrave royalties on U.S. and EU sales, annual cash flows until 2025 with no terminal value and a 10% discount rate.
RadiSys Corp. (NASDAQ: RSYS) was started with a Buy rating and a $4.50 price target at D.A. Davidson on Wednesday. The stock ended the week out at $2.97, implying right at 50% upside. Just be advised that this is thinly followed, even for a sub-$10 stock, and the average daily volume is less than 200,000 shares.
SandRidge Energy Inc. (NYSE: SD) was raised to Buy from Hold with a $6.75 price target on Wednesday (versus a $5.24 close on Tuesday) at Stifel. The stock closed out the week at $5.08, and news of a $200 million stock buyback did nothing to really help the stock out.
Scorpio Bulkers Inc. (NYSE: SALT) was started with a Buy rating and was given a $13 price target by Jefferies on Thursday. The stock was at $7.96 prior to this close, and the shares closed at $8.14 on Friday. This would imply a gain of about 60% if Jefferies is correct in its assessment. The consensus price target is even up above $12 here.
Threshold Pharmaceuticals Inc. (NASDAQ: THLD) is going to seem like a Hail Mary call — it has 200% implied upside. The firm HC Wainwright & Co. issued a Buy rating and a $12 price target on Friday. The stock’s closing price was up only three cents on Friday to $3.96, so we will leave it up to readers to decide whether this call is perceived as realistic. That being said, this cancer drug developer has a $235 million market cap, and the range of the analysts that cover the stock have target prices of $12 to $15 for the shares.
READ ALSO: How Alibaba Could Be the Biggest and Most Valuable IPO Ever
24/7 Wall St. would again like to mention that these stocks under $10 are generally far riskier companies than most of the companies we see each morning of the week in our regular analyst upgrades and downgrades review. These generally have more risks than traditional DJIA and large cap S&P 500 stocks. Some of these stocks may live up to expectations, while others could flop. There you have it.
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.