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 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 last March, has tripled since then.
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We screened our 24/7 Wall St. research database looking for smaller cap companies that could offer patient investors some huge returns for the new year and beyond. While these five stocks are rated Buy and have a ton of Wall Street coverage, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
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.
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Last fall, the stock was added to the small-cap Russell 2000, which is a huge advantage as index funds that replicate the index in its entirety have to buy the shares.
Truist Financial’s target price of $6 is higher than the $5.75 consensus target. Shares closed on Friday at $3.13.
Palantir
Started by Silicon Valley legend Peter Thiel, this company may offer the largest upside potential of all the stocks in this group, and it is also a takeover candidate. Palantir Technologies Inc. (NYSE: PLTR | PLTR Price Prediction) builds and deploys software platforms for the intelligence community in the United States to assist in counterterrorism investigations and operations.
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Palantir Gotham is the company’s software platform for government operatives in the defense and intelligence sectors that enables users to identify patterns hidden deep within datasets, ranging from signals intelligence sources to reports from confidential informants, as well as facilitates the handoff between analysts and operational users, helping operators plan and execute real-world responses to threats that have been identified within the platform.
The company also provides Palantir Foundry, a platform that transforms the ways organizations operate by creating a central operating system for their data, and it allows individual users to integrate and analyze the data they need in one place.
Raymond James has a Strong Buy rating on Palantir Technologies stock, and its $15 target price is a Wall Street high. The consensus target is $9.43, and shares closed on Friday at $7.55 apiece, up over 4% on the day.
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Riot Platforms
This well-known crypto miner (formerly known as Riot Blockchain) has seen its shares destroyed, and for those still positive on digital currencies, it may be a goldmine. Riot Platforms Inc. (NASDAQ: RIOT) focuses on bitcoin mining operations in North America. It operates through Bitcoin Mining, Data Center Hosting and Electrical Products and Engineering segments.
After the massive blow-up of FTX, many of the top bitcoin miners have been absolutely destroyed, and Riot Blockchain is one of the few companies that many experts in the crypto arena feel can survive this sector destruction. Some have gone as far as to say that, given the company’s micro-cap status (the market cap is only $766 million), it may be a strong takeover candidate for a larger entity looking to enter the crypto world or increase its current holdings.
BTIG Research’s target price is $12. Riot Platforms stock has a consensus target of $10.30. On Friday, the stock closed at $6.33 a share.
SoFi Technologies
This company took the SPAC route for its IPO and remains a millennial trader favorite. SoFi Technologies, Inc. (NASDAQ: SOFI) provides digital financial services that allow its members to borrow, save, spend, invest and protect their money. The company offers student loans; personal loans for debt consolidation and home improvement projects; and home loans.
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SoFi also provides cash management, investment and other related services. In addition, it operates Galileo, a technology platform that offers services to financial and non-financial institutions, and Apex, a technology-enabled platform that provides investment custody and clearing brokerage services.
SoFi Technologies has a $7.50 price target at Piper Sandler, while the consensus target is $8.13. The shares closed at $5.94 on Friday, a one-day gain of over 4%.
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Southwestern Energy
This stock has backed up and could be ready to run higher. Southwestern Energy Co. (NYSE: SWN) an independent energy company engaged in the exploration, development and production of natural gas, oil and natural gas liquids (NGLs) in the United States. The company focuses on the development of unconventional natural gas and oil reservoirs located in Pennsylvania, West Virginia, Ohio and Louisiana.
As of December 31, 2021, it had approximately 768,050 net acres in Appalachia; a total of 1,527 wells on production; and approximately proved natural gas, oil and NGLs reserves comprising 21,148 billion cubic feet of natural gas equivalent.
Southwestern Energy also engages in the marketing and transportation of natural gas, oil and NGLs. The company serves liquefied natural gas exporters, energy companies, utilities and industrial purchasers of natural gas.
The $7.50 Raymond James price objective is less than the $11.01 consensus target, but Southwestern Energy stock closed on Friday at $5.56.
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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.
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