Investing

Red-Hot Biotech Highlights Stocks to Buy Under $10 With Huge Upside

Lee Jackson

Published: December 8, 2018 7:10 am

Last Updated: January 11, 2020 1:59 pm

While most of Wall Street focuses on large-cap and mega-cap stocks, which 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 more suited for aggressive accounts, they could prove exciting additions to portfolios looking for solid alpha potential. Plus, after the huge fall sell-off, these five look even better now.

Altus Midstream

This energy play could be just the ticket for investors looking for a way to capitalize on the massive sell-off in the industry. Altus Midstream Co. (NASDAQ: ALTM) is a pure-play Permian Basin midstream C-corporation. The company owns gas gathering, processing and transportation assets in Alpine High, an unconventional resource play in the Delaware Basin.

The company also owns options for equity participation in five gas, natural gas liquids (NGL) and crude oil pipeline projects from the Permian Basin. Its assets include 150 miles of transmission and gathering pipelines, compressor stations, mechanical refrigeration units, cryogenic units and associated gas treatment facilities.

Barclays has a $10 price target on the shares, and the Wall Street consensus target was last seen at $12. Shares closed trading on Friday at $7.84 apiece.

Archrock

This stock has been battered and holds solid upside potential for those with somewhat lower risk tolerance. Archrock Inc. (NYSE: AROC) is a natural gas contract operations services company. It also provides natural gas compression services to customers in the oil and natural gas industry throughout the United States, and it supplies aftermarket services to customers that own compression equipment in the United States.

Archrock operates through two segments. The Contract Operations segment primarily provides natural gas compression services to meet specific customer requirements. The company provides contract operations services, including the personnel, equipment, tools, materials and supplies to meet its customers’ natural gas compression needs.

The Aftermarket Services segment provides a range of services to support the compression needs of customers, from parts sales and normal maintenance services to full operation of a customer’s owned assets.

B. Riley FBR has a massive $16 price target, while the posted consensus target is $14.91. The stock traded at $9.30 a share on Friday’s close.

Bioscrip

This company has a growing market share and could be a takeover candidate. BioScrip Inc. (NASDAQ: BIOS) is engaged in providing infusion solutions. It partners with physicians, hospital systems, skilled nursing facilities, health care payers and pharmaceutical manufacturers to provide patients access to post-acute care services.

The company offers home infusion services to provide clinical management services and the delivery of prescription medications. BioScrip provides services in coordination with, and under the direction of, the patient’s physician.

The $5 SunTrust target price compares with the $4.17 consensus price target. Shares were last seen trading at $3.88.

Evoqua Water Technologies

This stock has been crushed, but it remains in a sector that has monster upside. Evoqua Water Technologies Corp. (NASDAQ: AQUA) is focused on providing water treatment solutions. The company offers services, systems and technologies to support customers’ full water lifecycle needs.

Evoqua offers a comprehensive portfolio of differentiated, proprietary technology solutions, and the company operates through three segments. The Industrial segment provides application-specific solutions and full lifecycle services for critical water applications that selectively utilize its comprehensive portfolio of water treatment technologies to satisfy its customers’ unique water needs.

The Municipal segment provides engineered solutions and equipment for the treatment of wastewater, purification of drinking water and odor and corrosion control for municipalities.

Lastly, the Products segment sells differentiated technologies to a diverse set of water treatment system specifiers, integrators and end users globally.

RBC has a $13 price objective. The consensus target price is $12, and the shares closed Friday at $9.96 apiece.

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Intec Pharma

This is a biotech play for aggressive accounts looking for big-time alpha potential. Intec Pharma Ltd. (NASDAQ: NTEC) is a clinical-stage biopharmaceutical company focused on developing drugs based on its proprietary Accordion Pill platform technology. The company’s Accordion Pill is an oral drug delivery system that is designed to improve the efficacy and safety of existing drugs and drugs in development by utilizing an efficient gastric retention and specific release mechanism.

The company’s product pipeline includes two product candidates in clinical trial stages: Accordion Pill Carbidopa/Levodopa is in late-stage Phase 3 development for the treatment of Parkinson’s disease symptoms in advanced Parkinson’s disease patients. AP-cannabinoids, an Accordion Pill to deliver either or both of the primary cannabinoids contained in cannabis sativa, cannabidiol (CBD) and tetrahydrocannabinol (THC) for various pain indications.

The Oppenheimer price target on the shares is a massive $15. The consensus target is lower at $12.70, and the stock ended the week at $7.35 per share.

These five stocks trading under the $10 level have big upside to the analysts’ price targets. Again, while they are not suitable for conservative accounts, aggressive investors can get some solid share leverage buying 5000, 10,000 or more shares and can make money on a much smaller share price move. Plus they are all covered with Buy ratings at top firms across Wall Street.

And for a last consideration, the end of 2018 has been trading like many of the bear markets of the past. Analyst target prices seem to not matter on most days, and many stocks sell off for the same reasons over and over. Please read the 24/7 Wall St. piece about dire warnings surrounding analyst calls during bear markets to help avoid some serious pitfalls.