Investing
Healthy Upside Potential Seen for These 5 Stocks Trading Under $10
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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.
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Every week, we screen our 24/7 Wall St. research database looking for stocks with Buy equivalent rating at major firms and priced under the $10 level (last week’s picks included La Jolla Pharmaceuticals and VEREIT), 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.
Antero Resources
Shares of this company with big potential for investors bounced recently and is still offering a nice entry point. Antero Resources Corp. (NYSE: AR) is engaged in the exploration, development and acquisition of natural gas, natural gas liquids and oil properties located in the Appalachian Basin. Other activities include water handling and treatment, and marketing of excess firm transportation capacity.
The company’s subsidiary, Antero Midstream Partners, is a master limited partnership that owns, operates and develops midstream energy infrastructure primarily to service its production and completion activity. Its natural gas gathering and compression assets support the exploration and development activities. The combination of the two makes this a solid pick for investors.
Guggenheim has a $10.00 price objective on the shares, while the Wall Street consensus price target is $6.83. The shares traded on Friday’s close at $3.53 apiece.
BlackBerry
This was the first “smartphone” type company that was buried when Apple released the iPhone. BlackBerry Ltd. (NYSE: BB) continues transitioning from a mobile hardware provider to a mobile-focused security software and services company. Its portfolio of products includes BlackBerry Secure Unified Endpoint Management, crisis communication, corporate asset tracking, cybersecurity services and other secure collaboration software and communication technologies.
The company also licenses its brand/IP for mobile devices, and its QNX business provides leading embedded software systems. Earlier this year BlackBerry named Bryan Palma as president and chief operating officer. Palma was most recently Cisco’s senior vice president and general manager of customer experience for the Americas. Before joining Cisco, he was the vice president of cyber and security solutions at Boeing.
Macquarie has an $11 price objective on the shares, and the Wall Street consensus target price is $10.34. The shares traded on Friday’s close at $7.19.
Jagged Peak Energy
This smaller energy company had an initial public offering in early 2017 and currently has sizable upside potential from current trading levels. Jagged Peak Energy Inc. (NYSE: JAG) is a Permian Basin oil and gas producer with 70,000 net acres in the Southern Delaware Basin in three operating areas.
Its largest position is held in Whiskey River (35,000 net acres), which is located in Reeves and Ward counties, followed by Big Tex (22,000 net acres), which is located in Pecos County, and Cochise (12,900 net acres), which straddles Ward and Winkler counties.
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An $11 price target is posted at Williams Capital. The consensus target is $10.42, and the stock ended the week at $7.30.
TiVo
This company’s name actually became a verb years ago when people referred to recording TV shows. TiVo Corp. (NASDAQ: TIVO) provides entertainment technology, software and services. It operates through two segments.
The Intellectual Property Licensing segment consists of International Patent Group patent licensing to third-party guide developers such as multichannel video service providers, consumer electronics and set-top box manufacturers and interactive television software and program guide providers in the online, over-the-top video and mobile phone businesses.
The Product segment covers licensing of company-developed IPG products and services provided for multichannel video service providers and consumer electronics manufacturers, in-guide advertising revenue, analytics revenue and revenue from licensing metadata.
TiVo investors receive a very solid 4.25% dividend. B. Riley FBR has a massive $19 price target, but the consensus target is even higher at $22.00. The shares closed on Friday at $8.16 apiece.
Vivint Solar
This is a green energy play aggressive accounts may want to study. Vivint Solar Inc. (NYSE: VSLR) finances, installs and services solar power systems on customer premises. The majority of the company’s installations are leased from Vivint by its customers.
The company posted solid second-quarter results, including installing 66 megawatts, which was above the high end of its guidance. That represents 19% growth over the second quarter last year, and management said it does not expect the momentum to slow down.
The company recently entered into a $325 million credit facility that replaces its existing aggregation facility and reduces the cost of debt by 87.5 basis points and significantly increases the amount of upfront proceeds on a per-system basis.
Keycorp has put a $12 price target on the shares, which compares with the posted consensus target of $11.57. The stock closed most recently at $7.90 a share.
These are five stocks for aggressive accounts looking to get share count leverage on companies with sizable upside potential. While not suited for all investors, they are not penny stocks with absolutely no track record or liquidity, and major Wall Street firms have research coverage on them. Note though that while markets have retreated somewhat from all-time highs, value stocks still come with some risks.
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