Investing
5 Red-Hot Stocks Trading Under $10 With Massive Potential Upside
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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 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 and under the $10 level (last week’s picks included Accuray and Grab). This week was no exception as we found five new stocks that could provide investors with some solid upside potential. Skeptics of low-priced 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 and making good ideas to trade even harder to find), they 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.
This top security company is a well-known protector of homes and businesses. ADT Inc. (NYSE: ADT) is the largest residential and second-largest commercial security monitoring company in North America. The company serves over 7 million customers, installing over a million systems per year. Roughly 94% of revenue is generated in the United States, with the remainder from Canada.
Google announced last year that it was buying a 6.6% stake in the home security firm for $450 million in a deal that will allow it to provide service to customers of its Nest home security devices. ADT said that the companies will work to combine Nest products like cameras, thermostats, doorbells and alarm systems with ADT’s installation, service and professional monitoring network. The company also expects to offer certain Google devices to its customers and to expand the integration going forward.
Jefferies recently started coverage of ADT stock with a $10.50 price target, which is near the $10.75 consensus target. Shares closed trading on Friday at $7.89.
This microcap stock is an intriguing idea for aggressive growth investors. Brooklyn Immuno Therapeutics Inc. (NASDAQ: BTX) is a clinical-stage biopharmaceutical company engaged in developing therapies to treat patients with cancer. Its stock recently was added to the Nasdaq Biotechnology Index.
Brooklyn’s IRX-2 program, a human cell-derived cytokine therapy, is studying its safety and efficacy in patients with head and neck cancer in Phase 2b. In a Phase 2a clinical trial in head and neck cancer, IRX-2 demonstrated an overall survival benefit. Additional studies are either underway or planned in other solid tumor cancer indications.
Brooklyn has multiple next-generation cell and gene-editing therapies in preclinical development for various indications, including acute respiratory distress syndrome and solid tumor indications, as well as in vivo gene-editing therapies for rare genetic diseases.
Cantor Fitzgerald’s price target is $9, but the consensus target is up at $14.50. The stock closed at $3.85 a share on Friday.
Investors looking south of the border for ideas will like the prospects for this top company in Mexico. Cemex SAB de C.V. (NYSE: CX) produces, markets, distributes and sells cement, ready-mix concrete, aggregates, clinker and other construction materials worldwide.
The company also offers various complementary construction products, including asphalt products, concrete blocks, roof tiles, architectural products, concrete pipes for storm and sanitary sewers applications, and other precast products, including rail products, concrete floors, box culverts, bridges, drainage basins, barriers and parking curbs. In addition, it provides building solutions for housing projects, pavement projects and green building consultancy services, as well as for cement trade maritime services and for information technology solutions.
Cemex operates approximately 2,000 retail stores in approximately 600 cities, but the company announced last week that it has signed an agreement for the sale of its operations in Costa Rica and El Salvador.
Goldman Sachs kept its Buy rating and $9.20 price target after the announcement. The consensus target for Cemex stock is $10.64, and the shares were last seen at $6.55 on Friday.
This is another solid play for investors looking for microcap biotech ideas. Pear Therapeutics Inc. (NASDAQ: PEAR) engages in developing and commercializing software-based medicines.
The company has a pipeline of products and product candidates across therapeutic areas, including severe psychiatric and neurologic conditions. Its products include PearConnect, a patient service center for prescription digital therapeutics; reSET for the treatment of substance use disorder; reSET-O for the treatment of opioid use disorder; and Somryst for the treatment of chronic insomnia.
Crossroads, a national leader in the treatment of opioid use disorder, began implementing Pear’s reSET-O PDT technology in its centers across western Pennsylvania in January 2020. Now, Pear’s reSET and reSET-O PDTs have the potential to reach thousands of additional patients per month as a standard of care for eligible patients in Crossroads locations across the rest of Pennsylvania and into Kentucky, New Jersey and Virginia.
BTIG started coverage this week and has a $12 price target. The consensus target is even higher at $14.50. The stock last traded on Friday at $5.83 a share.
Those willing to take a shot on stocks in China have a solid avenue with this company. Zhihu Inc. (NYSE: ZH) operates an online content community platform in the People’s Republic of China. The company’s community allows people to seek inspiration, find solutions, make decisions and have fun. Zhihu also offers technology, business support and consulting services; information and marketing services; and internet services.
The company posted very solid results last year. While investors need to be careful with Chinese companies, major hedge funds in the United States have been piling into the shares. A Jefferies analyst noted recently that Zhihu has developed into a “high-quality and trustworthy” online content community, with users sharing knowledge, experience and insights and finding answers
Jefferies initiated coverage recently. Its $10.40 price target is less than the $12.87 consensus target but well above a share price of $4.97 last seen on Friday.
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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