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5 Stocks Trading Under $10 to Jump on After October Massacre
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Most firms on Wall Street focus on large and mega-cap stocks, as they provide a degree of safety and liquidity. Unfortunately, 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 $1000 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 this week 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. Plus, after the huge October sell-off, these five look even better now.
Caesars Entertainment
This is a well known old-school gaming company that is offering solid upside. Caesars Entertainment Corp. (NASDAQ: CZR) provides casino-entertainment and hospitality services. The company’s segments include Caesars Entertainment Resort Properties, LLC (CERP), Caesars Growth Partners, LLC (CGP) and Other. The company’s resorts operate primarily under the Harrah’s, Caesars and Horseshoe brand names.
The company’s facilities include gaming offerings, food and beverage outlets, hotel and convention space, and non-gaming entertainment options. Caesars Entertainment is one of the largest gaming companies in the world and currently owns or operates 49 casino properties in 13 U.S. states and 4 countries outside the U.S.
Recent reports have surfaced that the company was contacted by Tillman Fertitta, the owner of Golden Nugget, who approached Caesars about a merger valuing the company at $13/share. The transaction would exchange stock in privately held Golden Nugget for shares in Caesars via a reverse merger with Caesars as the acquirer.
The Merrill Lynch price target for the shares is set at $12. The Wall Street consensus target is set at $13.10. The stock closed Thursday trading at $8.85 in a 52-week range of $7.95 to $14.50.
Denbury Resources
This company may be the best value of all of the five stocks in our current line-up. Denbury Resources Inc. (NYSE: DNR) is an independent oil and natural gas company. The company’s operations are focused in two operating areas: the Gulf Coast and Rocky Mountain regions. Its properties with proved and producing reserves in the Gulf Coast region are situated in Mississippi, Texas, Louisiana and Alabama, and in the Rocky Mountain region are located in Montana, North Dakota and Wyoming.
In a recent huge move, Denbury acquired Penn Virginia for approximately $79.80 per share in a mix of cash and stock. Penn Virginia shareholders will own approximately 29% of the combined company. The deal is valued at about $1.7 billion, and will be financed with a combination of equity, debt, and cash on hand, and is expected to be accretive to key per-share metrics.
Oppenheimer rates the stock Outperform, and they have a massive $9 price target. The Wall Street consensus price objective is set at $5.89. The stock closed Thursday at $3.37 in a 52-week range of $1.18 to $6.75.
Entercom Communications
This is an under-the-radar media company that may hold solid upside. Entercom Communications Corp. (NYSE: ETM) is a radio broadcasting company. The company sells advertising time to local, regional and national advertisers and national network advertisers, purchasing spot commercials in varying lengths. It focuses on station-related digital platforms, which allow for audience interaction and participation, and integrated local digital marketing solutions and station events. Its stations are classified by their format, such as news, sports, talk, classic rock, urban, adult contemporary, alternative and country, among others.
Entercom has a portfolio of radio stations in 28 markets across the United States. It operates in various markets, which include Boston, Buffalo, Denver, Kansas City, Miami, Sacramento, San Francisco, and Seattle.
Guggenheim recently started coverage with a Buy rating and an $8.50 price target. That compares with the consensus target across Wall Street of $8. The shares ended trading on Thursday at $7.37 in a 52-week range of $6.02 to $12.42.
Fitbit
This company was a red-hot IPO three years ago and has been hammered from its highs. Fitbit Inc. (NYSE: FIT) is leading a worldwide movement toward healthier, more active lives by empowering people with data, inspiration, and guidance to reach their goals.
The Fitbit platform combines connected health and fitness devices with software and services, including an online dashboard and mobile apps, data analytics, motivational and social tools, personalized insights, and virtual coaching through customized fitness plans and interactive workouts.
The company reported outstanding results last week that beat Wall Street expectations. Third-quarter earnings $0.04 vs ($0.01) and revenues of $393.6 million vs $381.25 million estimates. They also provided forward guidance above Wall Street estimates.
Wedbush rates the stock at Outperform and they have a $6.50 target which could be going higher soon. The consensus target across Wall Street is posted at $6.47. The shares ended trading on Thursday at $5.95 in a 52-week range of $4.23 to $7.79.
Ford
This is a solid value play now and demand could spike because of increased demand for trucks. Ford Motor Co. (NYSE: F) is one of the world’s largest vehicle producers, with over 6 million units manufactured/sold globally. The company has made significant progress executing on its One Ford plan and delivering best in class vehicles. The company also remains committed to positioning itself well within the evolving auto industry through balanced investments across electrification, autonomy, and mobility services.
The company posted light third-quarter numbers but reiterated the overall 2018 outlook. Some analysts on Wall Street are concerned around lack of direction, but despite some setbacks, the F-100 series trucks remain the best-selling light vehicle in the U.S.
Shareholders are paid an outstanding 6.43% dividend, but it should be noted, this could be at risk of a cut. Goldman Sachs recently raised the stock to a Buy rating and they have a $12 price target. The Wall Street consensus price target is set at $9.89. The shares closed Thursday at $9.29 in a 52-week range of $8.17 to $13.48.
Five stocks trading under the $10 level with big upside to the analysts’ price targets. Again, while not suitable for conservative accounts, aggressive investors can get some solid share leverage buying 5000, 10,000, or more and can make money on a much smaller share price move. Plus they are all covered with a Buy rating at top firms across Wall Street.
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