Investing

5 Red-Hot Buy-Rated Stocks Trading Under $10 With Giant 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 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.

We screened our 24/7 Wall St. research database looking for smaller cap companies that could very well offer patient investors some huge returns for the rest of 2022 and beyond. Skeptics of low-priced shares should remember that at one point both Amazon and Apple traded in the single digits.

While all five 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.

Ginkgo Bioworks

This microcap biotech has strong upside potential for investors looking for ideas in the space. Ginkgo Bioworks Holdings Inc. (NYSE: DNA) develops a platform used to program cells to enable biological production of products, such as novel therapeutics, food ingredients and chemicals derived from petroleum.

The company serves various end markets, including specialty chemicals, agriculture, food, consumer products and pharmaceuticals. Ginkgo Bioworks has a partnership with Selecta Biosciences to advance treatments for orphan and rare diseases.

BofA Securities started coverage of Ginkgo Bioworks stock this week with an $8 price target. The consensus target is much higher at $13.25. The stock closed trading on Friday at $4.97 up almost 7%.

Grab

This stock has been cut in half since early November, and it appears to have stabilized enough to jump in. Grab Holdings Ltd. (NASDAQ: GRAB) operates a transportation and fintech platform in Southeast Asia. It offers a range of services, including mobility, food, package and grocery delivery services, as well as mobile payments and financial services.

Anthony Tan, Group CEO and co-founder, said this after the company’s successful conversion from SPAC status:

Our evolution into a superapp was guided by the everyday problems we wanted to solve for the people we care about, and accelerated by the growing appetite for digital services in a rapidly transforming landscape. From on-demand mobility and deliveries to digital financial services, enterprise services and more, we believe we are only scratching the surface of the opportunity ahead of us. While there’s no doubt this is an exciting moment, we’re grounded in the knowledge that this is just day one. Our calling remains the same – to unlock greater opportunity for all Southeast Asians to participate in the digital economy.

Goldman Sachs recently started coverage with a $7.90 price target. The consensus target for Grab stock is $8.76, and the shares last traded on Friday at $5.51.


Infinera

Some feel that this top company would be an outstanding addition to a networking giant as a takeover candidate. Infinera Corp. (NASDAQ: INFN) provides Intelligent Transport Networks, enabling carriers, cloud operators, governments and enterprises to scale network bandwidth, accelerate service innovation and simplify optical network operations.

Infinera’s portfolio of solutions includes optical transport platforms, converged packet-optical transport platforms, optical line systems, router platforms and a suite of networking and automation software offerings.

In 2020, Infinera and Windstream completed a live network trial that successfully achieved 800G single-wavelength transmission over 730 km across Windstream’s long-haul network between San Diego and Phoenix. The results of the trial mark a major milestone in optical networking by demonstrating that ultra-high-speed optical transmissions, such as 700G and 800G, powered by Infinera’s ICE6 optical engine and Windstream’s high-performance fiber network, can be deployed in real-world network applications over significant distances.

The $11.50 B. Riley Securities price objective compares to the $10.83 consensus target price. Infinera stock last traded at $7.94 on Friday.

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. It also is involved in the extraction and processing of gold-containing ores, reclamation of gold-mining properties and the production and sale of silver.

The company will release its 2021 fourth-quarter and full-year financial statements and operating results on Wednesday, February 16, 2022, after the market close, so aggressive investors can buy a position in front of the numbers. Management also will provide its full-year 2022 guidance; a mineral reserve and mineral resource statement as of December 31, 2021; and an exploration and project update.

Kinross Gold stock investors receive a 1.77% dividend. The BofA Securities price target is $8.10. The consensus target is higher at $9.75 and the share price on Friday was last seen at $5.25.

Vroom

The shares of this once red-hot stock have been pounded over the past year and could be ready for a big-time bounce. Vroom Inc. (NASDAQ: VRM) operates an e-commerce platform for buying and selling of new and used cars in the United States. It also offers financing solutions.

The company’s scalable, data-driven technology brings all phases of the car buying and selling process to consumers wherever they are and offers an extensive selection of used cars, transparent pricing, competitive financing and at-home pick-up and delivery. Vroom is based in New York and Houston, and it also operates the Texas Direct Auto and CarStory brands.

KeyBanc Capital Markets recently upgraded the stock and has a $13 price target. Note that the consensus target on Vroom stock is much higher at $26.75. Shares closed trading at $7.06 on Friday up close to 4%.


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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