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.
Skeptics of low-priced shares should remember that at one point both Amazon, Apple and Netflix traded in the single digits. One stock we featured over the years, Zynga, was purchased by Take-Two Interactive. Cogent Biosciences, which we featured in March, has tripled since then.
Goldman Sachs is the premier investment bank in the world, so we screened its outstanding research database and found five stocks trading under the $10 level that could provide investors with some huge upside potential. While all five are rated Buy at Goldman Sachs, they are much better suited for very aggressive investors. 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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Angi
Shares of this popular home services company have been crushed and have huge upside potential. Angi Inc. (NASDAQ: ANGI) connects home service professionals with consumers in the United States and internationally.
The Angi Ads business connects consumers with service professionals for local services through the Angi nationwide online directory of service professionals in various service categories. It provides consumers with valuable tools, services and content, including verified reviews, to help them research, shop and hire for local services, and it sells term-based website and mobile and digital magazine advertising to service professionals, as well as provides quoting, invoicing and payment services.
The company also owns and operates Angi Leads digital marketplace service, which connects consumers with service professionals for home repair, maintenance and improvement projects; offers consumers with tools and resources to find local, pre-screened and customer-rated service professionals, as well as online appointment booking; and connects consumers with service professionals by telephone and home services-related resources.
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Angi also operates Handy, a platform for household services, primarily cleaning and repair services; Angi Roofing, which provides roof replacement and repair services; and home services marketplaces under the Travaux, MyHammer, Werkspot, MyBuilder and Instapro names.
Goldman Sachs has an $8.50 price target for Angi stock, while the consensus target is just higher at $8.55. The stock closed on Friday at $2.14. Hitting the Goldman Sachs target would be more than a 300% gain.
Farfetch
This stock traded in the $50s a year ago and now has huge potential upside. Farfetch Ltd. (NYSE: FTCH) provides an online marketplace for luxury fashion goods in the United States, the United Kingdom and elsewhere.
Besides operating Farfetch.com, an online marketplace, and the Farfetch app for retailers and brands, the company also offers web design, build, development and retail distribution solutions for retailers and brands. As of December 31, 2021, operated two Browns retail stores; two Stadium Goods retail stores; and 12 New Guards Off-White stores, three Ambush stores, two Palm Angels stores and three Off-White outlets. In addition, it operates approximately 60 New Guards franchised retail stores and four seasonal stores under various brands.
The Goldman Sachs target price of $20 compares with the $14.85 consensus target. Farfetch stock last traded on Friday at $8.38. Hitting the Goldman Sachs target would be more than a 140% gain.
IHS
Shares of this wireless tower giant have been crushed and offer huge upside potential. IHS Holding Ltd. (NYSE: IHS) owns, operates and develops shared telecommunications infrastructure in Africa, Latin America, Europe and the Middle East. It offers colocation and lease agreement, build-to-suit, fiber connectivity and rural telephony solutions. The company serves mobile network operators, internet service providers, broadcasters, security functions and private corporations.
Including the approximately 5,700 towers subject to the imminent completion of its pending deal in South Africa, IHS will own nearly 39,000 towers across 11 countries, making the company the third largest independent multinational tower company by tower count. This geographic scale helps diversify the revenue stream, and also positions IHS in some of the largest emerging markets in the world, including the three largest countries in Africa and the largest Latin American country by gross domestic product.
Goldman Sachs recently trimmed its $15 target price to $13. The consensus target for IHS stock is higher at $18. Shares closed on Friday at $5.94, up over 5% on the day. The Goldman Sachs target represents almost a 130% gain.
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Kronos Bio
This microcap biotech may be the biggest winner of all the Goldman Sachs Buy-rated stocks under $10. Kronos Bio Inc. (NASDAQ: KRON) is a clinical-stage biopharmaceutical company focused on the discovery and development of novel cancer therapeutics.
The company’s product engine focuses on dysregulated transcription factors and the transcriptional regulatory networks that drive oncogenic activity. Its lead product candidate is entospletinib, which is an orally administered, selective spleen tyrosine kinase inhibitor for acute myeloid leukemia patients.
The company’s planned registrational Phase 3 clinical trial of entospletinib in combination with induction chemotherapy in acute myeloid leukemia patients with NPM1 mutations. It is also developing KB-0742, an orally bioavailable inhibitor of cyclin-dependent kinase 9 for the treatment of MYC-amplified solid tumors, which is in Phase 1/2 clinical trial.
The company is in Barcelona this week to present preclinical data demonstrating that Kronos Bio’s internally discovered oral CDK9 inhibitor, KB-0742 induced regressions in a preclinical model of MYCN-amplified neuroblastoma tumors and inhibited growth in patient-derived xenograft models of transcriptionally addicted Ewing sarcoma and alveolar rhabdomyosarcoma.
The $25 Goldman Sachs target price compares with a $20.20 consensus and a closing share price of $2.92 on Friday, up close to 7% for the day. Hitting the Goldman Sachs target would be an 800% gain.
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Rent the Runway
This may be an off-the-radar idea, but the upside potential is massive. Rent the Runway Inc. (NASDAQ: RENT) rents designer dresses, clothing and accessories for women through its stores and online platform. The company offers ready-to-wear, workwear, denim, casual, maternity, outerwear, blouses, knitwear, loungewear, activewear, skiwear, evening wear and kidswear products. It also offers jewelry, handbags, home goods and other accessories.
The stock has been absolutely mauled since it went public last October, and insiders have continued to buy shares during the freefall. The good news for investors looking at shares now is the company has increased its subscriber numbers substantially and has over 2.5 million lifetime customers.
The $6 price target at Goldman Sachs is less than the $7.20 consensus target. The stock last traded at $1.84 on Friday. Trading to the Goldman Sachs target would be a gain of more than 240%.
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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 clearly not suited for all investors, they are not penny stocks with absolutely no track record or liquidity, and with Goldman Sachs very bullish on all of them, they could be poised to move much higher.
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