Investing

5 Buy-Rated Stocks Trading Below $10 With Outstanding Upside Potential

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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 difficult 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.

We screened our 24/7 Wall St. research database looking for smaller cap companies that could very well offer patient investors some huge returns the rest of 2021 and beyond. Patient investors that did that in 2008 and 2009 absolutely killed it over the next few years.

While all five of the following stocks are rated Buy, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Colony Capital

This stock has had a good run and looks to be headed for new all-time highs. Colony Capital Inc. (NASDAQ: CLNY) is a leading global investment firm with a heritage of identifying and capitalizing on key secular trends in real estate.

This real estate investment trust manages an approximately $47 billion portfolio of real assets on behalf of its shareholders and limited partners, including over $23 billion in digital real estate investments through Digital Colony, its digital infrastructure platform. The company is headquartered in Los Angeles, with key offices in Boca Raton, New York and London.

B. Riley Securities has an $11 price target on the shares, while the Wall Street consensus target is $8.44. The stock has pulled back a bit from last week’s 52-week high above $8 a share.

iPower

The recent initial public offering came at half the expected price but the stock has almost doubled. iPower Inc. (NYSE: IPW) supplies hydroponics equipment online in the United States. It offers various products, including advanced indoor and greenhouse grow-light systems, ventilation systems, activated carbon filters, nutrients, growing media, hydroponic water-resistant grow tents, trimming machines, pumps and accessories for hydroponic gardening, as well as other indoor and outdoor growing products, under the iPower and Simple Deluxe brands through its Zenhydro.com website and various third-party e-commerce channels.

D.A. Davidson was the lead underwriter and is very positive on the shares. The analyst contends that the company has “significant” share gain potential and an above-average financial growth outlook given its “differentiated” private label program and a strong first-party relationship with Amazon. iPower aimed to use the additional capital from its IPO to fund multiple strategic initiatives that will drive improved profitability on top of its access to 10 years of rich data history that supports product innovation to match consumer’s needs

The D.A. Davidson price target is $10. There is no consensus target yet due to the recent initial public offering. The shares traded above $8 late in the week.


Mustang Bio

Aggressive investors looking for some big-time alpha may like this microcap biotech. Mustang Bio Inc. (NASDAQ: MBIO) is a clinical-stage biopharmaceutical company focused on translating medical breakthroughs in cell and gene therapies into potential cures for hematologic cancers, solid tumors and rare genetic diseases. Its pipeline focuses on gene therapy programs for rare genetic disorders, chimeric antigen receptor engineered T cell therapies for hematologic malignancies and for solid tumors.

The company develops MB-107 and MB-207, a gene therapy program for X-linked severe combined immunodeficiency, a rare genetic immune system condition in which affected patients do not live beyond infancy without treatment.

The towering $11 BTIG Research price target compares with a $10.40 consensus target and the almost $4 at which shares traded hands late in the week.

VistaGen Therapeutics

This is another microcap biotech for aggressive investors looking to the space for alpha potential. VistaGen Therapeutics Inc. (NASDAQ: VTGN) is a clinical-stage biopharmaceutical company engaged in developing and commercializing various medicines with the potential to care for anxiety, depression and other disorders of the central nervous system (CNS).

The company’s pipeline includes the following:

  • PH94B is a rapid-onset neuroactive nasal spray that is in preparation for Phase 3 development for the acute treatment of anxiety in adults with social anxiety disorder. It also has potential to treat a range of anxiety disorders, including adjustment disorder with anxiety, postpartum anxiety, post-traumatic stress disorder, preprocedural anxiety, panic and others.
  • TPH10 is a rapid-onset neuroactive nasal spray that is in preparation for Phase 2B clinical development as a stand-alone treatment for major depressive disorder (MDD).
  • AV-101 is an oral N-methyl-D-aspartate receptor antagonist that is in development in combination with probenecid as a potential treatment of levodopa-induced dyskinesia, MDD, neuropathic pain and suicidal ideation.

The company has contract research and development agreement with Cato Research, license and option agreements with Pherin Pharmaceuticals, a license and collaboration agreement with EverInsight Therapeutics and a license and sublicense agreement with BlueRock Therapeutics.

Baird has set a $9 price target. The lower consensus target is $6.50. Shares have traded mostly between $2 and $3 apiece since early in the year.

Waterdrop

After a recent IPO, this stock has solid upside potential. Waterdrop Inc. (NYSE: WDH) is the second-largest online insurance distribution platform in China. It distributes both short-term and long-term insurance products for insurers via its insurance marketplace. Waterdrop also owns Waterdrop Medical Crowdfunding, the largest online medical crowdfunding platform in China.

The company will focus until 2025 on growing its online insurance business in China, and it would like to expand further into health care businesses there in a decade. The company said in its IPO filing that its revenue hit ¥3 billion ($464.43 million), an increase of over 100% year on year.

Morgan Stanley analysts have an $11.80 price target. There is no consensus target yet. The stock has traded hands above $8 a share since the beginning of the month.


These are five stocks for aggressive investors looking to get share count leverage on companies that have 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.

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