Investing
5 Stocks Rated Buy Under $10 With Huge 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. Many of the biggest public companies, especially the technology giants, trade in the low to mid hundreds, all the way up to over $1,000 per share. 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 much better suited for aggressive accounts, they could prove exciting additions to portfolios looking for solid alpha potential.
This may be a solid play for energy investors looking for Permian Basin exposure. Abraxas Petroleum Corp. (NASDAQ: AXAS) is engaged in the acquisition, exploration, development and production of oil and gas. As of December 31, 2017, its estimated net proved reserves were 65.4 million barrels of oil equivalent.
The company’s oil and gas assets are located in three operating regions: the Rocky Mountain, Permian Basin and onshore Gulf Coast. The Abraxas properties in the Rocky Mountain region are located in the Williston Basin of North Dakota and Montana, as well as the Green River Powder River and Unita Basins of Wyoming and Utah.
The analysts at Stifel like the company and said this in a recent research report:
Abraxas has also previously indicated that it was looking to further streamline its assets with the sale of its Eagle Ford properties. Management could potentially announce an update on the divestiture process before the third quarter release. Most investors seemed to believe the stock, which is down 17% quarter to date (vs. +7% for the S&P 500), is undervalued in light of the company’s drilling inventory depth and solid financial position.
The Stifel price target for the stock is whopping $4.50, while the Wall Street consensus price target is $3.73. The shares were trading on Friday at $2.40 apiece.
This low-priced biotech stock has big upside potential. KemPharm Inc. (NASDAQ: KMPH) is engaged in the discovery and development of proprietary prodrugs. The company uses its Ligand Activated Therapy platform technology to create prodrugs, and its product candidate KP201/APAP consists of KP201, its prodrug of hydrocodone, which is combined with acetaminophen (APAP).
The company is developing KP201/APAP as an immediate release, a product candidate for the short-term, or no longer than 14 days for the management of acute pain. The company has designed KP201/APAP with abuse-deterrent properties to address the epidemic of opioid abuse in the United States.
Oppenheimer rates the shares Outperform with a giant $11 price target. The consensus target is $11.33, and the stock was trading on Friday at $4.55 per share.
This small biotech has taken investors on a roller-coaster ride over the past three years but could be ready for a big move higher. Novavax Inc. (NASDAQ: NVAX) is a clinical-stage vaccine company focused on the discovery, development and commercialization of recombinant nanoparticle vaccines and adjuvants. It operates through developing recombinant vaccines segment. The company, through its recombinant nanoparticle vaccine technology, produces vaccine candidates to respond to both known and newly emerging diseases.
The Novavax product pipeline focuses on a range of infectious diseases with vaccine candidates in clinical development for respiratory syncytial virus, seasonal influenza, pandemic influenza and the Ebola virus. The company’s lead adjuvant for human applications, Matrix-M, is in a Phase 1/2 clinical trial for pandemic influenza H7N9 vaccine candidate.
JPMorgan analyst Eric Joseph swung to bullish from bearish this week, citing a favorable risk-reward investment profile ahead of pivotal trial data on its RSV treatment for infants, due out in the first quarter of 2019. Joseph raised his rating two notches to Overweight from Underweight.
Note that the $2.25 JPMorgan price target is less than the $3.86 consensus target. The stock traded at $1.60.
This is a top player in the Gulf of Mexico. Noble Corp. (NYSE: NE) operates as an offshore drilling contractor for the oil and gas industry worldwide. It owns and operates a fleet of mobile offshore drilling units. As of December 31, 2017, the company operated a fleet of eight drillships, six semi-submersibles and 14 jack-ups.
Top Wall Street analysts feel that the company will be able to put idle or stacked rigs back to work over the next two years, and many are very bullish on the company’s prospects after some sustained underperformance.
RBC has a $15 price target, while the posted consensus target was last seen at $5.90. Shares were trading at $6.98.
Canada’s leading oilfield services firm provides contract drilling, well servicing and strategic support services to its customers. Precision Drilling Corp. (NYSE: PDS) provides customers with access to an extensive fleet of contract drilling rigs, directional drilling services, well service and snubbing rigs, coil tubing services, camps, rental equipment and water treatment units backed by a comprehensive mix of technical support services and skilled, experienced personnel.
Despite the company’s large Canadian exposure, 54% of its U.S. drilling fleet is located in the Permian Basin, which remains the hottest shale area in the United States. This stock may be a top pick for aggressive accounts looking for low-priced stocks to gain more shares.
RBC has its price objective set at $7. The consensus target price is $4.44, and the stock traded at $3.75 on Friday.
These are five stocks for aggressive accounts that look to get share count leverage on companies that have sizable upside potential. While not suited for all investors, these are not penny stocks with absolutely no track record or liquidity, and major Wall Street firms have research coverage on them.
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