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 hundreds, all the way up to over $1,000 per share or more. 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 with research coverage at major firms priced under the $10 level, and this week was no exception. We found five new stocks that 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. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Cinemark
If you have missed going to the movies and look forward to theatres reopening, this is a great contrarian idea. Cinemark Holdings Inc. (NYSE: CNK) engages in the motion picture exhibition business. As of February 10, 2020, it operated 548 theatres with 6,082 screens in 41 states of the United States, Brazil and Argentina, as well as 13 other Latin American countries.
This is one of the world’s largest and most influential movie theatre companies, and it has reopened approximately 75% of its U.S. circuit to overwhelmingly positive customer feedback. Some 97% of Cinemark moviegoers surveyed expressed satisfaction with Cinemark protecting their health and safety. Moreover, a resounding number of those moviegoers polled stated that they would return and also would recommend visiting Cinemark to a friend.
Loop Capital has a towering $16 price target, while the consensus target is $12. Cinemark stock plummeted recently below $8 a share.
Coty
Smart investors know that regardless of the economy, women will continue to buy makeup and fragrances, and this is a very solid play on that theme. Coty Inc. (NYSE: COTY) is number two globally in the fragrance category and number six in color cosmetics.
The company manufactures, markets, distributes and sells beauty products worldwide. It provides prestige fragrances, skincare and color cosmetics products through prestige retailers, including perfumeries, department stores, online retailers, direct-to-consumer websites and duty-free shops under the Alexander McQueen, Burberry, Bottega Veneta, Calvin Klein, Cavalli, Chloe, Davidoff, Escada, Gucci, Hugo Boss, Jil Sander, Joop!, Kylie Jenner, Lacoste, Lancaster, Marc Jacobs, Miu Miu, Nikos, philosophy and Tiffany brands.
Coty also offers mass color cosmetics, fragrance, skincare and body care products primarily through hypermarkets, supermarkets, drug stores, pharmacies, mid-tier department stores, traditional food and drug retailers, and e-commerce retailers under the Adidas, Beckham, Biocolor, Bozzano, Bourjois, Bruno Banani, CoverGirl, Enrique, Max Factor, Mexx, Monange, Nautica, Paixao, Rimmel, Risque, Sally Hansen, Stetson and 007 James Bond brands.
The $4 Jefferies price target is less than the $4.27 consensus target. Coty stock has rallied recently to around $3.30.
Macerich
This top real estate play has been crushed during the pandemic. Macerich Co. (NYSE: MAC) is a fully integrated, self-managed and self-administered real estate investment trust focused on the acquisition, leasing, management, development and redevelopment of regional malls throughout the United States. Macerich currently owns 51 million square feet of real estate consisting primarily of interests in 47 regional shopping centers.
Macerich specializes in successful retail properties in many of the country’s most attractive, densely populated markets, with significant presences on the west coast, Arizona, Chicago and the New York Metro area to the Washington, D.C., corridor.
Macerich recently announced that all 47 of its major retail properties nationwide will soon be fully open for business, now that Los Angeles County has approved indoor mall reopenings. This could be a huge boost for the shares.
Investors receive an 8.31% dividend. JPMorgan has a Neutral rating but an $11 price target. The posted consensus target is $8, and Macerich stock has traded between $7 and $8 over the past month.
National Oilwell Varco
This is a top company in its industry and its share price offers an incredible entry point. National Oilwell Varco Inc. (NYSE: NOV) designs, constructs, manufactures and sells systems, components and products for oil and gas drilling and production worldwide.
The company offers various equipment and technologies used to perform drilling operations. It also provides solids control and waste management equipment and services; drilling fluids; portable power generation products; drill and wired pipes; drilling optimization and automation services; tubular inspection, repair and coating services; instrumentation and measuring and monitoring services; downhole and fishing tools; steerable technologies; and drill bits.
The Goldman Sachs price objective is $17.50. The consensus target is $12.91, and National Oilwell Varco stock traded on Friday below $9.
3D Systems
In 2014, this stock traded above $90. 3D Systems Corp. (NYSE: DDD) offers 3D printers, such as stereo lithography, selective laser sintering, direct metal printing, multi-jet printing and color jet printers that transform data input generated by 3D design software, CAD software or other 3D design tools into printed parts under the Accura, DuraForm, LaserForm, CastForm and VisiJet brand names.
It also develops, blends and markets various print materials, such as plastic, nylon, metal, composite, elastomeric, wax, polymeric dental and Class IV biocompatible materials. In addition, the company provides digital design tools, including software, scanners and haptic devices, as well as products for product design, mold and die design, 3D scan-to-print, reverse engineering, production machining, metrology and inspection.
3D Systems offers 3D Sprint and 3DXpert, a proprietary software to prepare and optimize CAD data and manage the additive manufacturing processes, which provides automated support building and placement, build platform management, and print queue management, as well as 3D virtual reality simulators and simulator modules for medical applications and digitizing scanners for medical and mechanical applications.
Berenberg recently initiated coverage with an $8 price target. The Wall Street consensus target is $4, and 3D Systems stock recently spiked above $6.50 a share.
These are five well-known stocks for aggressive investors 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 top Wall Street firms have research coverage on all five.
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