Investing

Top Wall Street Analysts Have 5 Stocks Under $10 With Gigantic Upside Potential

Wikimedia Commons

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 covered by top Wall Street analysts that are trading under the $10 level and could provide investors with some solid upside potential. While much more suited for aggressive accounts, they could prove exciting additions to portfolios looking for solid alpha potential.

Harmonic

This stock has been on a roll and is close to breaking out. Harmonic Inc. (NASDAQ: HLIT) engages in the development and sale of video delivery software, products, system solutions and services. The Video segment, one of the two through which it operates, sells video processing and production and playout services to cable operators, satellite and telecommunications pay-TV service providers, and broadcast and media companies, including streaming new media companies.

The other is the Cable Edge segment, which markets cable access solutions and related services, such as CableOS software-based Converged Cable Access Platform (CCAP) solutions.

Stifel has a $7 price target on the shares, but the Wall Street consensus target is just $5.88. The stock was trading at Friday’s close at $5.42 per share.

Rosehill Resources

This small-cap oil and gas exploration company came in with some strong quarterly results. Rosehill Resources Inc. (NASDAQ: ROSE) engages in the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin.

Last week the company announced it grew average net production to 22,779 barrels of oil equivalent per day (73% oil and 87% total liquids), an increase of 15% compared to the third quarter of 2018. In addition, the company reported net income attributable to Rosehill of $50.2 million, or $2.35 per fully diluted share, for the fourth quarter of 2018, which included a $199.4 million noncash, pretax gain on commodity derivative instruments.

The SunTrust analyst has a $6 price target for the shares. The posted consensus figure was last seen at $6.73, and the stock closed at $3.40 on Friday.

Stonebridge Biopharma

This stock has massive implied upside to the Stifel analysts target. Stonebridge Biopharma PLC (NASDAQ: SBBP) operates as a commercial-stage biopharmaceutical company that focuses on the development and commercialization of therapies for rare diseases. Its pipeline is comprised of Keveyis, Macrilen, Recorlev and Veldoreotide.

Last week the company presented new data analyses from the Phase 3 SONICS study of Recorlev for the potential treatment of endogenous Cushing’s syndrome. Improvements in hemoglobin A1c and fasting blood glucose in the maintenance phase were more pronounced among patients with comorbid diabetes mellitus, while antidiabetic medications were more often decreased than increased.

In addition, the clinicals showed significant improvements in cardiovascular risk markers of low-density lipoprotein (LDL)-cholesterol, weight, body mass index and waist circumference were seen in patients with and without diabetes mellitus. Additionally, improvement in LDL-cholesterol occurred without any new use of statins or increases in statin dose.

The massive $15 Stifel price target compares to a $14.29 consensus across Wall Street. The stock ended the week at $4.98 per share.

Sientra

This stock has been blitzed over the last year and offers aggressive accounts a very timely entry point. Sientra Inc. (NASDAQ: SIEN) as a medical aesthetics company that engages in developing and commercializing plastic surgery implantable devices. It operates through two reportable segments.

The Breast Products segment focuses on sales of its breast implants, tissue expanders and scar management products under the brands Sientra, AlloX2, Dermaspan, Softspan and Biocorneum. The miraDry segment focuses on sales of the miraDry System, consisting of a console and a handheld device that uses consumable single-use bioTips.

With breast implants under scrutiny lately, the company told the FDA that the primary focus is upholding the highest levels of patient safety. Importantly, the totality of the firm’s clinical and real-world data, including its 10-year Post-Approval Cohort Study, which included almost 1,800 participants fully met FDA’s compliance requirements, and has confirmed the long-term safety and effectiveness of the company’s products.

Stifel has set its price target at $16. The higher consensus figure is $19.50, and shares were trading at $8.58 as the week came to a close.

W&T Offshore

This small-cap driller may provide some serious upside for energy accounts. W&T Offshore Inc. (NYSE: WTI) engages in the production, exploration, development and acquisition of oil and natural gas properties. Its operations are focused in the Gulf of Mexico.

Last week the company was the apparent high bidder on eight deepwater and seven shallow-water blocks, which includes Garden Banks 173; Green Canyon blocks 3, 46, 47, 49, 91 and 92; and Mississippi Canyon 244 in the deepwater, as well as Eugene Island blocks 357, 378, 393, 395, 396; Main Pass 286; and South Marsh 205 in the shallow water.

These 15 blocks cover approximately 73,500 acres and, if awarded, the company will pay approximately $3.5 million for all the awarded leases combined, which reflects a 100% working interest in the acreage. All the blocks have a five-year lease term, with the exception of one of the deepwater blocks, which has a seven-year lease term. The royalty rate for eight of the blocks is 12.5%, and the remaining seven leases are at a rate of 18.75%.

The Stifel team has a $10 price target. The consensus target is $7.25, and the shares were last seen at $6.90 apiece.

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 all.

Take This Retirement Quiz To Get Matched With An Advisor Now (Sponsored)

Are you ready for retirement? Planning for retirement can be overwhelming, that’s why it could be a good idea to speak to a fiduciary financial advisor about your goals today.

Start by taking this retirement quiz right here from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes. Smart Asset is now matching over 50,000 people a month.

Click here now to get started.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.