While most of Wall Street focuses on large-cap 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.
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Charah Solutions
This stock had a parabolic move higher and looks poised for a continued run. Charah Solutions Inc. (NASDAQ: CHRA) is the largest coal ash management company in the United States, with nearly 11% of the market. The company provides a complete line of services to the coal-fired electric utility industry, including landfill construction, fly ash processing and marketing, and ash pond management. Charah mainly assists the coal-fired power gen industry, although it is starting to provide routine maintenance and modification services for nuclear-powered utilities.
The shares recently had a big move after it secured a Dominion Energy contract from 2021 through 2032 to transport up to 8.1 million tons of coal ash at its Chesterfield Power Station to cement kiln feed markets.
The environmental services company said it will install processing and transportation infrastructure in 2021 to facilitate rail transportation of the ash to cement kiln feed markets in the eastern United States for more than 10 years and also to help supply the growing demand for concrete in the construction industry.
Stifel has a $7 price target on the shares. That compares with a $6.00 Wall Street consensus target. The stock has leveled off just above $4.
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Costamare
This off-the-radar idea has been on a solid roll and could hop into double digits soon. Costamare Inc. (NYSE: CMRE) is one of the world’s leading owners and providers of containerships for charter.
The company has 46 years of history in the international shipping industry and a fleet of 72 containerships, with a total capacity of approximately 529,000 twenty-foot equivalent units, including two newbuild container ships currently under construction. Ten of the company’s containerships have been acquired pursuant to the Framework Deed with York Capital Management by vessel-owning joint venture entities in which Costamere holds a minority equity interest.
Investors receive a 4.71% dividend. Stifel recently lifted the price target to $11 from $9.50. The consensus target is $10, and the stock has been trading near $8.50.
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Magnolia Oil and Gas
This smaller cap company has been on a wild ride this past year and looks poised to move higher. Magnolia Oil and Gas Corp. (NYSE: MGY) engages in the business of acquisition, development, exploration and production of oil, natural gas and natural gas liquids (NGLs) reserves in the United States.
The company has oil and natural gas properties located primarily in Karnes County and the Giddings Field in South Texas, primarily comprising the Eagle Ford Shale and the Austin Chalk formation. As of December 31, 2019, its assets consisted of a total leasehold position of 455,964 net acres, including 16,841 net acres with 200 net producing wells in the Karnes County portion of the Eagle Ford Shale, and 439,123 net acres with 846 net producing wells in the Giddings Field of the Austin Chalk.
The Goldman Sachs price target recently was raised to $11 from $9, while the consensus target is $7.86. The shares have seen a nice move higher recently and were trading just under $9.
Redwood Trust
This stock was hit hard last year but has been slowly coming back and offers a great entry point for investors. Redwood Trust Inc. (NYSE: RWT) engages in the business of investing in mortgages and other real estate-related assets. It operates through the following segments.
The Residential Lending segment consists of a mortgage loan conduit that acquires residential loans from third-party originators for subsequent sale, securitization or transfer into the investment portfolio. The Business Purpose Lending segment includes the platform that originates and acquires business purpose residential loans. The Multifamily Investments segment refers to the investments in securities collateralized by multifamily mortgage loans, as well as other investments in multifamily mortgages and related assets.
The Third-Party Residential Investments segment contains the investment in residential mortgage-backed securities issued by third parties and investments in Freddie Mac securitizations.
Investors receive a 6.16% dividend. This one is on the Raymond James Analyst Select Picks list and has a $12 target price. The consensus target is $10. Shares have been hovering close to $9.
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Southwestern Energy
This company has traded sideways all year long and could be ready to run. Southwestern Energy Co. (NYSE: SWN | SWN Price Prediction) is one of the largest U.S. natural gas producers. Its primary producing locations are the Fayetteville and the Marcellus Shale. The company has acquired acreage in SW Appalachia that is exceeding expectations and provides a runway to growth.
The company’s estimated proved natural gas, oil and NGLs reserves comprise 12,721 billion cubic feet of natural gas equivalent (Bcfe); and 929 Bcfe of proved undeveloped reserves. It also engages in marketing of natural gas, oil and NGLs. It serves energy companies, utilities and industrial purchasers of natural gas.
The $4 Goldman Sachs price target was just lifted to $4.75. The consensus target is $4. The stock has settled in just below the $3.50 level.
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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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