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 not only to 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 priced under the $10 level and this week was no exception (last week’s picks included semiconductor and biopharma stocks). This week, we found five new stocks that could provide investors with some solid upside potential. Skeptics of low price shares should remember that at one point both Amazon and Apple traded in the single digits.
While more suited for aggressive investors, and with the number of new traders skyrocketing over the past year, making good ideas to trade even harder to find, these five stocks could prove exciting additions for traders looking for solid alpha potential. It is important to remember, though, that no single analyst report should be used as a sole basis for any buying or selling decision.
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Energy Transfer
The top master limited partnership is a very safe way for investors looking for energy exposure and income. Energy Transfer LP (NYSE: ET | ET Price Prediction) owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with a strategic footprint in all of the major domestic production basins.
The company is a publicly traded limited partnership with core operations that include complementary natural gas midstream, intrastate and interstate transportation and storage assets; crude oil, natural gas liquids (NGL) and refined product transportation and terminalling assets; NGL fractionation; and various acquisition and marketing assets.
Through its ownership of Energy Transfer Operating, formerly known as Energy Transfer Partners, the company also owns Lake Charles LNG, as well as the general partner interests, the incentive distribution rights and 28.5 million common units of Sunoco, and the general partner interests and 39.7 million common units of USA Compression Partners.
Investors are paid a solid 6.89% distribution. Citigroup has a Buy rating and earlier this fall raised the price target $15 from $14, which compares to the consensus which is posted just lower at $13,78. The shares were last seen Friday at $9.15.
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Kosmos Energy
This stock is solid energy exploration and production play, and with oil and gas prices rising, could be an outstanding idea now. Kosmos Energy Ltd. (NYSE: KOS) is a deepwater independent oil and gas exploration and production company, focused along the Atlantic Margins.
The company’s primary assets include production offshore Ghana, Equatorial Guinea, and the U.S. Gulf of Mexico, as well as a gas development offshore Mauritania and Senegal. It also maintains a proven basin exploration program.
Kosmos Energy’s focus is on unlocking new hydrocarbon systems and growing and maturing discovered basins through follow-on exploration success, development and production.
BofA Securities has a Buy rating and a $5.85 target. The consensus target is posted at $3.39. The stock closed Friday’s trading at $3.24.
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Lantronix
This company sold off some after earnings and is a great idea for aggressive traders. Lantronix Inc. (NASDAQ: LTRX) provides software as a service (SaaS), engineering services, and hardware for edge computing, the Internet of Things (IoT), and remote environment management (REM) in the Americas, Europe, the Middle East, Africa, and the Asia Pacific Japan.
The company’s IoT products include IoT Connectivity, which provides wired and wireless connections that enhance the value and utility of modern electronic systems and equipment through secure network connectivity, application hosting, protocol conversion, secure access for distributed IoT deployments, and various other functions.
Further, its SaaS platform enables customers to deploy, monitor, manage and automate across their global deployments through a single platform login. The company offers its products through value-added resellers, systems integrators, distributors, online retailers, and original equipment manufacturers; and an e-commerce site for direct sales. Lantronix, Inc. was founded in 1989 and is headquartered in Irvine, California.
Needham has a Buy rating and has set the price objective for the company at $13. That compares with the lower $11.25 Wall Street consensus price. The shares closed Friday at $8.48.
Nokia
This telecommunications company once ruled the cell phone arena until the advent of the smartphone in 2007 but has re-emerged as a top meme stock. Nokia Corporation (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.
The company posted some good news earlier this year when it indicated it expects to revise its fiscal year 2021 guidance upward, citing continued strength in its business supported by “good cost control” and strength in several of the company’s end markets.
Top analysts across Wall Street feel that the market is currently overstating the extent of sales losses from currency, China exposure, and Nokia’s lost contracts with Verizon. Most believe investors should position for the upgrade cycle that is likely to continue to play out over the next 12 months.
Cowen has an Outperform rating and an $8 target for the company which is versus the much lower $7.34 consensus and Friday’s closing trade of $6.06.
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Zynga
This is a very aggressive tech play that could have upside even above the huge Wedbush target. Zynga Inc. (NASDAQ: ZNGA) provides social game services in the United States and internationally. The company develops, markets, and operates social games as live services played on mobile platforms, such as Apple iOS and Google’s Android operating systems; social networking platforms, such as Facebook and Snapchat; and personal computers consoles, such as Nintendo’s Switch game console, and other platforms and consoles.
Zynga also provides advertising services comprising mobile advertisements, engagement advertisements and offers, and branded virtual items and sponsorships for marketers and advertisers; and licenses its own brands.
With live events growing the company’s revenues, cost-cutting should drive margin expansion, which is very positive. The company also pops up in takeover chatter, and the low price makes it even more attractive.
Barclays has a Buy rating and a $10 price target, while the consensus is set higher at $10.96. The stock closed trading Friday at $7.55.
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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, these are not penny stocks with absolutely no track record or liquidity, and major Wall Street firms have research coverage.
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