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 is 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 week we screen our 24/7 Wall St. research database looking for stocks rated Buy at major firms and priced under the $10 level. This week we found five new stocks that could provide investors with some solid upside potential.
While more suited for aggressive investors, and with the number of new traders skyrocketing over the past year and making good ideas to trade even harder to find, these could prove exciting additions for traders 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.
Kinross Gold
Investors who are more aggressive may want to consider this smaller cap mining company. Kinross Gold Corp. (NYSE: KGC) engages in the acquisition, exploration and development of gold properties, principally in Canada, the United States, the Russian Federation, Brazil, Chile, Ghana and Mauritania.
The company is scheduled to release its 2020 fourth-quarter and full-year financial statements and operating results on Wednesday, February 10, 2021, after market close. It also will provide its full-year 2021 guidance, a mineral reserve and mineral resource statement and an exploration and project update. The company posted very strong results back in early November.
BofA Securities recently lowered its price target to $11.50 from $11.75. The consensus target across Wall Street is higher at $12.68. The shares have traded just below the $7.50 level recently.
24/7 Wall St.Noodles
This stock has been a rollercoaster ride but also has giant upside potential. Noodles and Co. (NASDAQ: NDLS) operates in the restaurant industry, offering lunch and dinner meals. It serves a variety of cooked-to-order dishes, including noodles and pasta, soups, salads, sandwiches and appetizers.
The company claims to serve noodles your way, from noodles and flavors that you know and love to new ones you’re about to discover for the first time. From indulgent Wisconsin Mac & Cheese to good-for-you Zoodles, Noodles serves a world of flavor in every bowl. It has more than 450 restaurants and 10,000 employees.
Jefferies has a $10 price objective, and the consensus target is $9.40. The stock has traded just shy of $9 recently but looks like a triple top breakout candidate.
Osmotica Pharmaceuticals
This small-cap biotech play has massive upside to the Truist Securities price target. Osmotica Pharmaceuticals PLC (NASDAQ: OSMT) is a fully integrated biopharmaceutical company focused on the development and commercialization of specialty products that target markets with underserved patient populations.
The company’s diversified product portfolio in the specialty neurology and women’s health therapeutic areas, together with its non-promoted complex formulations of generic drugs, form the foundation of our unwavering commitment to improve patients’ lives.
The company recently received a Complete Response Letter (CRL) from the U.S. Food and Drug Administration (FDA) regarding its new drug application seeking approval for arbaclofen extended release tablets as treatment for spasticity resulting from multiple sclerosis. The letter stated that Osmotica did not provide adequate justification for the statistical analysis of one of the co-primary endpoints, change from baseline to Day 84 in TNmAS-MAL scores comparing arbaclofen 40 mg versus placebo. The FDA’s recommendations include conducting a new study in order to provide substantial evidence of efficacy. Osmotica will review the CRL and intends to discuss the recommendations with the FDA.
While the Truist team recently lowered the price target to $8 from $11, they (like many) feel that new studies could be positive. The consensus price target is $8.50, and the shares have rallied some off recent lows to the $4.70 level.
Del Taco Restaurants
This stock has rallied big off last March’s lows and could benefit from continued reopening of the economy. Del Taco Restaurants Inc. (NASDAQ: TACO) is the second-largest Mexican-American quick-service restaurant chain by units in the United States. It engages in developing, franchising, owning and operating restaurants featuring made-to-order cuisine. It offers Mexican-inspired food, such as tacos and burritos, and American classics, such as Double Del cheeseburgers, crinkle-cut fries and milkshakes.
Del Taco’s menu items are a big favorite with customers because they are made with quality ingredients like fresh grilled chicken and carne asada steak, sliced avocado, freshly grated cheddar cheese, slow-cooked beans made from scratch, and creamy queso blanco.
Del Taco serves more than 3 million guests each week at its approximately 600 restaurants across 16 states. Del Taco’s commitment to providing guests with the best quality and value for their money originates from cooking, chopping, shredding and grilling menu items from scratch.
Jefferies has a $12 price target, slightly higher than the $11.75 consensus. Shares have traded near $9.40 for the past month.
24/7 Wall St.WiMi Hologram
This is an intriguing idea that spiked up huge in July but came back in and has put in a long base. WiMi Hologram Cloud Inc. (NASDAQ: WIMI) provides augmented reality (AR) based holographic services and products in China.
The company primarily offers holographic AR advertising services and holographic AR entertainment products. Its holographic AR advertising software enables users to insert into video footage real or animated three-dimensional objects, and its online holographic AR advertising solution embeds holographic AR ads into films.
The company’s holographic AR entertainment products consist primarily of payment middleware software, game distribution platform and holographic mixed reality software.
Benchmark recently started coverage with a Buy rating and an $8 price target, the same as the consensus target. The shares have traded north of $6 for the past six weeks.
These are five stocks for aggressive investors 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.
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