Investing

5 Very Well-Known Stocks Trading Under $10 With Huge Potential Upside

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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 ratings at major firms and priced under the $10 level (last week’s picks included Callon Petroleum and Tellurian), 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.

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.

Scotia Bank has a $10 price objective. The Wall Street consensus target is $10.34, and the shares traded on Friday’s close at $7.54.

Ford

This venerable automotive giant remains a solid value play now, and demand could jump with a trade deal with China paving the way. Ford Motor Co. (NYSE: F) is one of the world’s largest vehicle producers, with over 6 million units manufactured and sold globally. The company has made significant progress executing on its One Ford plan and delivering best-in-class vehicles.

Ford also remains committed to positioning itself well within the evolving auto industry through balanced investments across electrification, autonomy and mobility services. Ford is among the car brands with the most loyal customers.

While Ford continues to struggle amid a volatile global market, exacerbated by some perceived critical missteps, some of that may partially abate this year. Recently Moody’s downgraded Ford’s credit rating from investment-grade (Baa3) to junk (Ba1) status, assigning an outlook of Stable. The rating downgrade impact is somewhat de minimis, but it may be a harbinger of future downgrades and challenges. Merrill Lynch did not disagree with the concerns raised by Moody’s but believe much of these are priced into Ford stock.

Shareholders receive an outstanding 6.47% dividend, though it may be lowered ahead. Merrill has a $13 price target and the consensus target is lower at $10.73. The shares closed on Friday at $9.17.

General Electric

If any stock has taken a beating over the past two years, it has been this former industrial powerhouse. General Electric Co. (NYSE: GE) businesses are organized broadly under seven segments: Power, Renewable Energy, Energy Connections, Oil & Gas, Aviation, Healthcare, Transportation and GE Capital. The company’s products and services include power generation equipment, aircraft engines, locomotives, medical equipment, compressors and others. Over half of the business is tied to service and aftermarket support.

Last year the venerable American industrial giant got the ultimate humiliation of being removed from the Dow Jones industrial average after a stay of over 100 years.

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The massive restructuring and debt reduction plans that have been announced come after years of acquisitions and changes in the core business at GE, and in some cases what many on Wall Street thought were ill-advised moves by the former CEO Jeff Immelt. The company’s once dependable dividend has been chopped to $0.04 a share and may be eliminated altogether at some point.

GE investors receive just a 0.42% dividend. Wolfe Research’s $14 price target compares to the consensus target of $10.76. The shares closed at $9.37 on Friday.

Nokia

This telecommunications company once ruled the cell phone arena, until the advent of the smartphone in 2007. Nokia Corp. (NYSE: NOK) owns two main businesses: 1) Nokia Networks, a network infrastructure equipment supplier to global wireless and wireline operators, and 2) Technologies, its patent/IPR licensing activities.

Recently, Nokia, NTT Docomo and Omron agreed to conduct joint field trials using 5G at their plants and other production sites. As part of the trial, Nokia will provide the enabling 5G technology and Omron the factory automation equipment, while NTT Docomo will run the 5G trial.

The trial follows the increasing demand for wireless communications at manufacturing sites driven by the need for stable connectivity between Internet of Things devices. As background noise from machines and the movement of people have the potential to interfere with wireless communications, the trial will aim to verify the reliability and stability of 5G technology deployed by conducting radio wave measurements and transmission experiments.

The stock is on the Merrill Lynch US 1 list, and the firm’s $7.10 price objective compares with a $6.62 consensus estimate. The stock was last trading at $5.29.

Sirius XM

Sirius XM Holdings Inc. (NASDAQ: SIRI) is a satellite radio operator serving the U.S. market that has more than 140 channels of music and talk programming. The company provides services for a monthly subscription fee and currently has over 33 subscribers. It also has recently acquired Pandora, an audio streaming business with roughly 70 million active users.

Sirius creates and offers commercial-free music; premier sports talk and live events; comedy; news; exclusive talk and entertainment; and a wide range of Latin music, sports and talk programming. Sirius is available in vehicles from every major car company and on smartphones and other connected devices as well as online.

Sirius is also a leading provider of connected vehicles services, giving customers access to a suite of safety, security and convenience services, including automatic crash notification, stolen vehicle recovery assistance, enhanced roadside assistance and turn-by-turn navigation.

The company reported solid second-quarter results characterized by strong EBITDA growth, which included a positive Pandora contribution and an $898 million stock buyback. Merrill Lynch reset the company’s self-pay subscriber net additions estimate for 2019 to 1 million, versus slightly higher numbers. For 2019, the firm estimates total revenue of $7.8 billion, with an adjusted EBITDA estimate that is now $2.37 billion.

The $8 Merrill price target may be going higher soon. The posted consensus target is $6.92, and shares ended the week at $6.26 apiece.

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 are again near all-time highs, value stocks come with some risks.

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