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.
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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.

Raymond James is one the premier investment banks in the world, so we screened the firm’s outstanding research database and found five stocks trading for less than $10 a share with the firm’s highest Strong Buy rating that could provide investors with some massive upside potential, ranging from 160% to almost 1,000%.

While all five are rated Outperform at Raymond James, they are much better suited for aggressive investors, and it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Arlo Technologies

This company provides the kind of technology that is in big demand and forward growth could be remarkable. Arlo Technologies Inc. (NYSE: ARLO) provides a cloud-based platform in the Americas, Europe, the Middle East and elsewhere. It combines an intelligent cloud infrastructure and mobile app with various smart connected devices.

The company offers Arlo essential indoor camera; Arlo Go 2 LTE/Wi-Fi security camera; Arlo Q and Arlo Q Plus, an indoor wired solution that allows users to monitor their surroundings; and Arlo Go, an LTE-enabled wire-free camera that provides untethered mobile security.

It also provides Arlo Baby, a baby monitor with air quality and temperature sensors, motion and audio detection, and advanced night vision; Arlo Chime that pairs with the Arlo Video Doorbell to play a variety of ringtones or act as a siren; Arlo Ultra, an integrated spotlight and crystal-clear two-way audio with advanced noise cancellations camera; Arlo Pro 3, an integrated spotlight with color night vision camera; Arlo Video Doorbell delivers direct-to-mobile video calls and personalized alerts; Arlo Floodlight Camera, a wire-free variant LED camera, as well as Arlo Essential Spotlight; Arlo Ultra 2; Arlo Essential XL Spotlight; Arlo Essential Wire-Free Video Doorbell; and Arlo Pro 4 Wire-Free Spotlight.

In addition, it provides Arlo accessories, such as charging accessories, device mounts and device skins. Further, it offers Arlo app for iOS and Android devices that allow users to connect various devices, and Arlo Secure, with coverage for unlimited cameras and enhanced emergency response solutions. The company offers its products through retailers, wholesale distributors, broadcast channels, wireless carriers and security solution providers, as well as through its website.

The Raymond James target price is $11, while the consensus target is $9.50. The stock traded on Friday at $3.40, so hitting the Raymond James target would be around a 230% winner.

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.
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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.

This week, the company announced the launch of Ginkgo Enzyme Services, which is powered by ultra-high throughput screening and machine learning-guided protein design, as well as optimized proprietary bacterial and fungal host strains. Ginkgo Enzyme Services solves challenges for R&D teams developing enzymes, from discovery of novel enzyme activity through optimization of enzyme function and large-scale manufacturing.

Raymond James has a $14.50 target price on Ginkgo Bioworks stock. The consensus target is just $5.82. The stock traded on Friday at $1.85. Hitting the Raymond James target would be a 690% or so gain.

Holley

Do-it-yourself car enthusiasts know this old-school company well. Holley Inc. (NYSE: HLLY) designs, manufactures and markets automotive aftermarket products for car and truck enthusiasts in the United States, Canada, Europe and China.

The company’s products include carburetors, fuel pumps, fuel injection systems, nitrous oxide injection systems, superchargers, exhaust headers, mufflers, distributors, ignition components, engine tuners, automotive performance plumbing products and exhaust products, as well as shifters, converters, transmission kits, transmissions, tuners and automotive software. It also offers wheels, chassis and suspension products, helmets, head and neck restraints, seat belts, firesuits, and electronic control and monitoring systems.

The company sells its products under the Holley, Holley EFI, APR, MSD, Flowmaster, Powerteq, Accel and Simpson brands to retailers directly, as well as through distributors and online channels.

Earlier this year the stock was added to the Russell 2000, which is a huge advantage as index funds that replicate the index in its entirety have to buy the shares.

The $9 Raymond James target price compares with the $6 consensus target. Shares traded on Friday at $2.75, so hitting the Raymond James target would be a gain of about 235%.

This is the stock with the biggest upside potential and is another micro-cap biotech idea for aggressive traders. LianBio (NASDAQ: LIAN), a biopharmaceutical company, engages in developing and commercializing medicines for cardiovascular, oncology, respiratory, ophthalmology and inflammatory diseases in China and other Asian countries.
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The company develops mavacamten for the treatment of obstructive and non-obstructive hypertrophic cardiomyopathy, and heart failure with preserved ejection fraction; TP-03 for the treatment of Demodex blepharitis; NBTXR3 for the treatment of head and neck squamous cell carcinoma and solid tumor; Infigratinib for the treatment of second-line and first-line cholangiocarcinoma and gastric cancers; BBP-398 for solid tumors; Omilancor for ulcerative colitis and Crohn’s disease; NX-13 for ulcerative colitis; LYR-210 for chronic rhinosinusitis; and Sisunatovir for respiratory syncytical virus.

LianBio has a partnership with Tarsus Pharmaceuticals to develop and commercialize TP-03, an eye solution for the treatment of Demodex blepharitis. It has a partnership with Nanobiotix to develop and commercialize NBTXR3, a radioenhancer designed to be injected directly into a malignant tumor prior to standard radiotherapy.

The $15 target price at Raymond James is well above the $9.73 consensus and a share price of $1.40 seen on Friday. The Raymond James target represents about a 971% gain.

Viking Therapeutics

Shares of this small-cap clinical-stage biopharmaceutical company could have monster upside potential. Viking Therapeutics Inc. (NASDAQ: VKTX) is focused on the development of novel therapies for metabolic and endocrine disorders.

Its lead drug candidate is VK2809, an orally available tissue and receptor-subtype selective agonist of the thyroid hormone receptor beta, which is in Phase 2b clinical trials to treat patients with biopsy-confirmed non-alcoholic steatohepatitis, as well as non-alcoholic fatty liver disease.

The company also develops VK5211, an orally available non-steroidal selective androgen receptor modulator that is in Phase 2 clinical trials for the treatment of patients recovering from non-elective hip fracture surgery. Its VK0612 is an orally available Phase 2b-ready drug candidate for type 2 diabetes, and VK0214 is an orally available tissue and receptor-subtype selective agonist of the thyroid hormone receptor beta for X-linked adrenoleukodystrophy.

Over the past year, insiders have been loading up on the shares, with a director at the firm buying 50,000 shares.

Raymond James has set its price objective at $11. The consensus target is higher at $17.44, and the stock traded at $3.70 on Friday. Hitting the target would be about a 200% gain.

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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, they are not penny stocks with absolutely no track record or liquidity, and Raymond James has research coverage.

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