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5 Stocks Trading Under $10 That Have Massive Upside Potential
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While Most of Wall Street focuses on large 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, as many of the biggest companies, especially the technology giants, trade in the low to mid-hundreds per share — all the way up to over $1,000. At those steep prices, it’s pretty hard 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.
We screened our 24/7 Wall St. research database and found five stocks trading under the $10 level that could provide investors with some solid upside potential. While more suited for aggressive accounts, they could prove exciting additions to portfolios looking for solid alpha potential.
Weatherford
This stock has been absolutely demolished from its 2014 highs, but it may be offering aggressive investors big upside potential. Weatherford International Ltd. (NYSE: WFT) is one of the largest multinational oilfield service companies, providing innovative solutions, technology and services to the oil and gas industry. It operates in over 100 countries and has a network of approximately 1,200 locations, including manufacturing, service, research and development, and training facilities and employs approximately 37,000 people.
The company offers customers a wide range of global capabilities, including a proprietary system for pressure management in the mushrooming arena of subsea production. The changes in government oil policy in Mexico in 2014 may provide some favorable tailwinds for the company, despite the huge downturn in oil pricing.
SunTrust rates the shares at Buy and has a massive $6 price target on the stock. That compares with the Wall Street consensus target of $4.90, as well as the most recent closing price of $2.64.
Nabors Industries
This company provides drilling and rig services, and some feel it could be a takeover target. Nabors Industries Ltd (NYSE: NBR) owns and operates the largest land-based drilling rig fleet in the world, and it is a leading provider of offshore platform workover and drilling rigs in the United States and select international markets. Revenues in 2016 were $2.23 billion.
Nabors markets approximately 400 rigs for land-based drilling operations in the United States, Canada and approximately 20 other countries worldwide, and 41 rigs for offshore drilling operations in the United States and internationally.
While the stock has rallied off the lows, Nabors is still down over 50% from highest levels posted a year ago. This concern has been exacerbated recently by a softer-than-expected third-quarter earnings report and focus on 2018 non–cash deferred revenues. While most don’t see a quick fix for the company, the worst surely looks to be over.
Nabors investors are paid a 3.5% dividend, though that may be lowered going forward. Merrill Lynch has a $10 price target and rate the stock at Buy. The posted consensus price objective was last seen at $9.10. Shares closed well below those levels Friday at $7.18 apiece.
24/7 Wall St.Pandora Media
This company faces more and more competition, and it is often mentioned as a takeover target. Pandora Media Inc. (NYSE: P) provides internet music streaming services in North America. It allows its listeners to create personalized stations to access free music and comedy catalogs, as well as a personalized playlist generating system.
The company also offers Pandora One, a paid subscription service to listeners. And it sells audio, display and video advertising to advertisers for delivery on computer, mobile and other connected device platforms.
While Pandora is clearly not the only company with a big desire to be in the music streaming business, it is the current leader in installation and use in the automotive world, and it has a decent collaboration deal with Comcast.
Piper Jaffray rates the stock a Buy and has a $9 price target. The posted consensus price target is $7.50. The shares ended the week at $4.98 apiece.
Kinross Gold
More aggressive investors may want to consider this smaller cap company. Kinross Gold Corp. (NYSE: KGC) engages in the acquisition, exploration, development and production of gold properties. The company’s gold production and exploration activities are carried out principally in Canada, the United States, the Russian Federation, Brazil, Chile, Ghana and Mauritania. It also produces and sells silver.
Kinross announced last year that it will proceed with the Tasiast Phase Two and Round Mountain Project W projects. At full production by 2020, CEO Paul Rollinson sees these two projects stabilizing the company’s gold equivalent output in the 2.5 million ounce range. Trading at a discount to the peer producers, some believe that this valuation gap could be closed due to these projects.
Merrill Lynch analysts have a Buy rating and a $5.80 price objective. That compares to the consensus estimate of $3.77. The stock closed most recently at $3.57 per share.
Zynga
This very aggressive tech play could have upside beyond its Wedbush target. Zynga Inc. (NASDAQ: ZNGA) is a leading developer of mobile and social games. In the company’s relatively short history, it has developed a broad portfolio of games that includes several games on Facebook and several top-grossing mobile apps. Key franchises include FarmVille, Zynga Poker, Hit It Rich Slots and Words With Friends.
With live events growing the company’s revenues, cost-cutting should drive margin expansion, which is very positive. The company also pops up in takeover chatter, and the low price makes it even more attractive.
The $5 Wedbush price target accompanies a Buy rating. The consensus target is $4.20, and the stock closed trading at $3.72 on Friday.
Five stocks trading under the $10 level — most of them under $5. Again, while not suitable for conservative accounts, aggressive investors can get some solid share leverage buying 5,000, 10,000 or more and can make money on a much smaller market move.
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