Investing
5 New Stocks Trading Under $10 With Monumental Implied Upside
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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 $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.
Every week we screen our 24/7 Wall St. research database looking for 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. Last week’s stock picks under $10 with gigantic upside potential included Hexo, Range Resources and more.
This micro-cap clinical-stage biopharmaceutical company could very well be a solid takeover candidate. Axovant Sciences Ltd. (NASDAQ: AXGT) is engaged in the acquisition, development and commercialization of novel therapeutics in the fields of neurology and psychiatry. Its therapeutic focuses are Parkinson’s disease and Lewy body dementia. It operates through the following geographical segments: United States, Switzerland, Bermuda, and Other.
The company’s current pipeline of gene therapy candidates targets GM1 gangliosidosis, GM2 gangliosidosis (including Tay-Sachs disease and Sandhoff disease), Parkinson’s disease, oculopharyngeal muscular dystrophy, amyotrophic lateral sclerosis (ALS) and frontotemporal dementia.
Axovant is focused on accelerating product candidates into and through clinical trials with a team of experts in gene therapy development and through external partnerships with leading gene therapy organizations.
Evercore ISI has a Buy rating and a $3 price target on the shares, but the Wall Street consensus target is much higher at $5.17. The shares were trading on Friday’s close at $1.13.
This may be the consummate play for aggressive accounts looking to buy size in energy. Lonestar Resources US Inc. (NASDAQ: LONE) engages in the acquisition, development and production of unconventional oil and natural gas properties. Its portfolio includes the Eagle Ford Shale.
The company announced recently that its board approved a capital-flexible budget that ranges from 17 gross per 15.6 net wells, which it estimates will cost $107 million, to a high of 20 gross per 18.6 net wells, which are budgeted to cost $130 million. As commodity prices fell precipitously in the fourth quarter of 2018, Lonestar suspended drilling operations pending the negotiation of contracts for drilling and completion operations, which gave the company sufficient flexibility to “dial-in” activity levels to react to commodity prices and expected cash flow generation capacity.
SunTrust has a massive $7 price target, and the consensus target was last seen at $6.50. Shares closed trading at $3.53 on Friday.
This is another small-cap biotech that could explode higher. Seres Therapeutics Inc. (NASDAQ: MCRB) is a microbiome therapeutics platform company engaged in the development of biological drugs. It focuses on implementing that microbiome therapeutics platform to develop ecobiotic microbiome therapeutics that treat dysbiosis in the colonic microbiome.
When it released earnings earlier this year, the company announced the initiation of a SER-401 Phase 1b study in patients with metastatic melanoma. SER-401 is an oral microbiome therapeutic candidate sourced from healthy individuals identified to have a microbiome bacterial signature similar to that observed in immunotherapy responders.
The Phase 1b study, conducted in collaboration with The University of Texas MD Anderson Cancer Center and the Parker Institute for Cancer Immunotherapy, will evaluate the potential for SER-401 to augment response to anti-PD-1 checkpoint inhibitor therapy.
The Jefferies Buy rating comes with a $7 price target. The posted consensus target is $12.14, and shares were last seen at $5.04.
This company could be poised for big gains as liquefied natural gas (LNG) exporting continues to ramp higher. Tellurian Inc. (NASDAQ: TELL) is an LNG development company headquartered in Houston, Texas. The company plans to develop a 27.6 metric tonnes per annum, LNG terminal with five plants near Lake Charles, Louisiana, as well as upstream assets and pipeline infrastructure.
The initial phase likely will include three plants (16.6 metric tonnes per annum, capacity). The Driftwood project will be financed by equity customers and partners, as well as project debt financing. Tellurian will own 28% to 42% of Driftwood Holdings and 100% of Tellurian Marketing.
The company announced earlier this year that the U.S. Federal Energy Regulatory Commission issued the final Environmental Impact Statement for Driftwood LNG, an export facility and associated 96-mile pipeline (Driftwood project), proposed near Lake Charles on the U.S. Gulf Coast. When the agency grants authorization, Tellurian will then stand ready to make a final investment decision and begin construction in the first half of 2019, with the first LNG expected in 2023.
The Merrill Lynch energy team has Buy rating and a $12 price objective. The consensus target price is $11.38, and the share price ended the week at $9.31.
This very aggressive tech play could have upside above the current targets on Wall Street. 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 on Facebook and several top-grossing mobile apps. Key franchises include FarmVille, Zynga Poker, Hit It Rich Slots and Words With Friends.
The company posted very solid first-quarter results that beat Wall Street estimates, and it also raised forward guidance. Early acquisitions traction and a strong marketing push drove bookings upside. Organic growth, however, remains soft, and with Wall Street looking for upside, new title traction will be a key driver for the remainder of 2019.
Baird’s $8 price target on the Buy-rated stock compares with the $6.83 consensus target. Zynga traded most recently at $6.03 a share.
These are five stocks for aggressive accounts looking 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.
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