Investing

5 Sizzling New Stocks Under $10 With Massive Implied Upside

Lee Jackson

Published: June 29, 2019 8:55 am

Last Updated: January 30, 2020 7:05 pm

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. Often 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.

Each and every week, we screen our 24/7 Wall St. research database looking for stocks rated Buy at major firms and priced under the $10 level (last week’s picks included Antero Resources and Kosmos Energy), and this week was no exception. We found five more stocks 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.

Aurora Cannabis

This company has made a string of acquisitions to grow the scale of its overall business and saw industry-leading sales in the first quarter. Aurora Cannabis Inc. (NYSE: ACB) produces and distributes medical cannabis products. It is vertically integrated and horizontally diversified across various segments of the cannabis value chain, from facility engineering and design to cannabis breeding, genetics research, production, derivatives, high value-add product development, home cultivation, wholesale and retail distribution.

The company’s products consist of dried cannabis and cannabis oil, CanniMed vegan capsules and hemp products, as well as sells vaporizers, consumable vaporizer accessories and herb mills for using herbal cannabis products. It also operates CanvasRX, a network of cannabis counseling and outreach centers, and it provides cannabis analytical product testing services.

Also note that notorious activist investor Nelson Peltz recently became a strategic advisor for Aurora Cannabis.

The Merrill Lynch price target for the shares is $10, but a Wall Street consensus target was not available. The shares closed trading on Friday at $7.82.

B2Gold

This is a small-cap gold stock for aggressive investors looking for sector exposure. B2Gold Corp. (NYSE: BTG) is a global, growth-oriented mid-tier gold producer whose primary assets include gold mines located in Nicaragua (La Libertad and El Limon), the Philippines (Masbate) and Namibia (Otjikoto) and Mali (Fekola).

In May, the company reported strong first-quarter earnings results, with EBITDA and adjusted earnings per share both better than those forecast by Merrill and the Wall Street consensus, due to 3% lower cash operating costs. B2Gold also reported better-than-expected first-quarter free cash flow.

Merrill has a $3.85 price target, while the consensus target is $3.50. Shares traded at $3.03 on Friday’s close.

Oasis Petroleum

This smaller cap energy play could be an outstanding pick for more aggressive accounts. Oasis Petroleum Inc. (NYSE: OAS) is an independent exploration and production company that focuses on the acquisition and development of unconventional oil and natural gas resources in the North Dakota and Montana regions of the Williston Basin. Its principal projects are located in West Williston and East Nesson.

The company reported solid first-quarter results, with the full-year production and capital expenditures outlook unchanged. In addition, Oasis came in with positive well results, and it has a second gas plant ramping up. It is also transitioning to full-field development in the Delaware region.

The massive $14 Stifel price target compares with the $8.19 consensus target. Shares traded most recently at $5.68 apiece.

Teva Pharmaceutical

This leading generic drug maker is trading at 19-year lows and could be a steal at current prices. Teva Pharmaceutical Industries Ltd. (NYSE: TEVA), an Israeli/U.S. generics company, is one of the largest companies in the global generic pharma industry following its acquisition of Allergan’s generics unit.

The company’s business model includes global generic capabilities, vertical integration into the active pharmaceutical ingredients business and a branded specialty pharma business (Copaxone, Treanda, Austedo and other products).

Note that several shareholder lawsuits have been filed against the company, and until these are resolved, that could keep a lid on the stock.

Raymond James has set a whopping $22 price target. The consensus target is $14.73, and the stock closed at $9.23.

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Waitr Holdings

The trend in home delivery from your favorite local restaurants is growing, and this is one way for investors to play it. Waitr Holdings Inc. (NASDAQ: WTRH) engages in an on-demand food ordering and delivery business. Its platform connects local restaurants to diners in underserved markets.

The company’s mobile and desktop ordering platforms allow users to browse for local restaurants, customize menu items and pay securely from mobile phones or computers.

RBC recently started coverage of the stock with a $10 price target. The consensus target is much higher at $16.25, and shares were last seen at $6.29.

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.