The bull market may now be almost nine years old. And January of 2018 might have been the strongest start of a year in some time. Unfortunately, the less than traditional and somewhat disorderly sell-off in stocks in February of 2018 acted as a harsh reminder to investors that the markets can correct and can correct violently.

The big concern now is to weigh all the factors contributing to the sell-off to determine which are temporary and which are longer-term issues. And then there is the consideration of how investors should be positioning themselves for the rest of 2018 and beyond.

24/7 Wall St. reviews dozens of top Wall Street research reports each day of the week. This ends up being hundreds of research ideas each week, and it can be over 1,000 different reports over the course of a month. Some analyst reports cover stocks to buy and some cover stocks to sell.

Despite the big sell-off in February, many Wall Street analysts are sticking by their bullish calls. To many investors, particularly those with investing horizons longer than the next news cycle, this pullback represents a buying opportunity. There is an interesting group of stocks to consider among all those “Buy” and “Outperform” ratings. In the past 10 days or so, there have been a host of analyst reports calling for investors to buy some of the stocks trading under $10. This is a class of stocks that can be scary to some investors, and it can be an attractive area for speculative investors because some of the implied upside to the analyst price target is so high in percentage terms.

Investors have to understand that most stocks under $10 tend to be riskier than Dow Jones industrial average and S&P 500 stocks. Some of the companies are very small, with market values of a few hundred million or less. Others are formerly larger companies that may have become stuck over time. Either way, these come with more risk than conservative stocks.

To outline how much more risk there is, investors have to consider the notion that a higher implied upside should translate to a higher risk profile for a company. The traditional analyst upside target had been roughly 8% to 10%, but that might be a range as high as 10% to 15% for new Buy/Outperform calls now that stocks have sold off. Some of the analyst calls in the stocks under $10 that have been made in the past 10 days during the selling panic have seen upside predictions of 25%, 50% and even over 100% in some of the much more speculative calls. Again, more upside projections inherently come with a higher risk.

In an effort to highlight lower-priced shares that still might have some upside, we have included additional metrics in each call. The date of each call has been highlighted, as has what the target means in implied upside. We also included recent trading performance metrics to show how this compared to the sell-off in which the Dow and S&P went from being up 8% at the peak in 2018 to being down 2% each in year-to-date performance. Consensus estimates on earnings data or on analyst price targets are from Thomson Reuters.

These are eight analyst stock picks with share prices under $10. One additional stock has been featured as a runner-up, with less detail, since its shares are now back so close to the $10 mark again.

Apollo Investment Corp. (NASDAQ: AINV) is a closed-end management investment company that is under the larger Apollo Investment Management group. On February 8, Wells Fargo raised its rating to Outperform from Market Perform. On the same day, SunTrust Robinson Humphrey maintained its Buy rating but lowered its target to $6.50 from $6.75, and KBW maintained its Outperform rating but lowered its target to $6.25 from $6.50.

Apollo Investment has an 11% dividend yield. Its market cap is $1.16 billion, and the shares closed down 3% at $5.30 on Friday. It ended 2017 with a net asset value per share of $6.60, and it has a 52-week trading range of $5.30 to $6.82. Its shares are down about 6% so far in 2018. The consensus analyst price target is $6.27.

Cleveland-Cliffs Inc. (NYSE: CLF) has been down and out from its former glory days, but Credit Suisse thinks that is about to change. The stock was raised in a rare two-notch upgrade to Outperform from Underperform at Credit Suisse, which raised its price target to $9 from $5. The firm noted that higher core USIO free cash flows and a valuation uplift from tax reform to its HBI project will add value ahead. Shares of Cleveland-Cliffs were up 4.8% at $6.76 ahead of this call, and the stock was initially trading at $7.00 on Wednesday after the call — but the market selling put shares at $6.62 by Friday’s close.

Cleveland-Cliffs shares have a 52-week range of $5.56 to $12.37, and the stock is now down 8% so far in 2018. The market cap is $1.96 billion. Cleveland-Cliffs was a more than $20 stock in 2013, and it was above $90 briefly in 2010. The consensus price target is $8.13.

Just Energy Group Inc. (NYSE: JE) is small Canadian energy management solutions provider that operates in electricity, natural gas, solar and green energy in the United States, Canada, Europe and Japan. It has a $655 million market cap, and Friday’s closing price of $4.52 was down 1% on the day but was up about 10% from earlier in the week after posting a profit of $0.87 per share on $718 million in revenues and on news that it is acquiring EdgePower. It serves approximately 1.5 million residential and commercial customers. On February 8, during the market selling pressure, CIBC raised its rating to Outperform from Neutral and Canaccord Genuity raised its rating to Buy from Hold. RBC Capital Markets had raised its rating to Outperform back in December as well.

At $5.52, Just Energy’s American depositary shares (ADSs) have a 52-week range of $3.86 to $6.35, and they are up about 28% so far in 2018 after having seen a sharp drop in November. Just Energy’s consensus price target is $4.52.

Nokia Corp. (NYSE: NOK) was raised to Buy from Hold at Merrill Lynch on February 5, with the firm noting an attractive valuation and solid position heading into the coming 5G upgrade cycle. Much of that steam is expected to pick up in the second half of 2018. Merrill Lynch’s target rose to €5.25 from €4.50 (implying 19% upside from its €4.40 prior close). On the previous Friday, Nokia was raised to Buy from Neutral with a $7.50 price target (versus a $5.40 prior close) at MKM Partners.

Nokia’s ADSs were up almost 1% at $5.40 as of Friday, February 9, and the 52-week range is $4.51 to $6.65. They are still up 15% so far in 2018. This is by far the largest company in the sub-$10 stocks, with a $29 billion market cap, and Nokia has a consensus price target of $6.57.

OncoSec Medical Inc. (NASDAQ: ONCS) is a tiny $70 million biotech outfit that targets cancer, and its lead product candidate (ImmunoPulse IL-12) is in Phase 2 trials and is indicated for targets in metastatic melanoma and triple negative breast cancer. Piper Jaffray came out on February 9, basically at the peak of the market selling pressure, and started OnceSec with an Overweight rating with a $4 price target. This call is more than a double if it comes to pass, and it would have received better attention had the selling panic not been such a dominating force in the news cycle. Note that OncoSec raised $20 million in equity sale at $1.50 per share a week earlier, and that financing was led by Piper Jaffray as the book-running manager.

OncoSec’s $1.64 price is down from over $2.00 in mid-to-late January, but its stock is actually up a penny so far in 2018 despite the market sell-off. The 52-week range is $0.88 to $2.95.

PennantPark Investment Corp. (NASDAQ: PNNT) was up 1.8% at $6.77 on Thursday after strong earnings despite the big market drop, and its stock closed at $6.90 on Friday, after having been indicated up at $7.00 on Friday morning. Ladenburg Thalmann raised it to Buy from Neutral with an $8 price target.

PennantPark is a business lending and investment company, and it comes with close to a 10% dividend yield. Its market cap is only $490 million, and it has a 52-week trading range of $6.29 to $8.69. Its shares are basically flat so far in 2018. The consensus price target is $8.00.

Pulmatrix Inc. (NASDAQ: PULM) is a tiny $32 million biotech outfit with a proprietary product pipeline focused on pulmonary rare diseases. The firm H.C. Wainwright started coverage with a Buy rating on February 9, and its $5 price target is actually more than 200% higher than the $1.48 prior close. The stock closed up 2% at $1.51 on Friday, and that seriously high price target is actually barely higher than the 52-week high of $4.75. Pulmatrix was briefly a $17 stock back in 2014. The company just disclosed its 2018 business outlook with long-term targets on Friday.

Back in January, Zacks Small-Cap Research said Pulmatrix has a formidable intellectual property portfolio covering its platform technology and product pipeline into the 2030s and said its fair value is $7.50 per share. The stock is too small and too thinly covered to have a consensus price target.

Sirius XM Holdings Inc. (NASDAQ: SIRI) may not be viewed universally as a Buy after its shares have risen, but at $5.82 as of the most recent close, its stock is still up almost 9% so far in 2018. Buckingham Research had initiated Sirius XM with a Buy rating and a $6.50 price target back in mid-January (and Deutsche Bank also raised its rating to Buy at that time), but Buckingham Research came out on February 2 and raised its target to $7. Sirius XM has a more conservative consensus analyst target of $6.23.

A runner-up call has been included because the shares have come so far off that any additional market selling would take it back to being a $10 stock.

Extreme Networks Inc. (NASDAQ: EXTR) was reiterated as Buy at D.A. Davidson and the price target was raised to $17 from $16 on February 7. This stock slid down to about $10.50 from $15 at the end of January, so it’s a runner-up for the $10 or less category. Extreme Networks has a 52-week trading range of $5.71 to $15.55, and its market cap is $1.2 billion. And it has a consensus price target of $16.70.

As a final reminder, investors should use Wall Street research reports only as a starting point in making any investing decisions. When big upside comes with big risks, it has to be assumed that there is no free lunch for investors and that big losses can follow if the underlying thesis is changed or if the market selling were to accelerate further. Caveat emptor!

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