Stocks remain close to all-time highs, but investors are getting used to being told that the bull market has become a stock picker’s market, but sometimes the stocks trading under $10 have incredible upside price targets from analysts.
As a note of caution, stocks trading under $10 are often among the riskiest stocks in the market. To prove a point, only four of the members in the S&P 500 Index have share prices under $10 - and only one of them trades under $9. Still, many investors are attracted to lower-priced stocks as they feel like there is larger room for upside.
Another consideration on risk in most of the stocks under $10 is that almost all of these selected from this past week would fail the “widows and orphans” suitability test. This is what brokers and financial advisors have to consider when it comes to ethics and suitability for clients.
These are the nine analyst stocks we tracked this past week that were trading under $10 and have huge implied upside, if the analysts are correct in their calls.
saw a gain of more than 4% on Friday to $8.31, after Jefferies started coverage with a Buy rating and assigned a $14 price target. The driver is enrollment in its eye study trial has ended. While this biotech player has an implied upside of 68% to the Jefferies target price, the 52-week range is $5.06 to $10.86, and a call from Citigroup in May gave Ampio a whopping $21 price target.
is back again in the Imperial Capital starting coverage as Buy and with a $7 price target last Thursday. The $473 mln small cap power generator has a 52-week range of $2.11 to $5.36. This $7 target is the highest among analysts by far, and shares rose 4% on the upgrade and another gain of almost 6% on Friday to close out at $3.92.
saw keen analyst action last week, with one daring to call this $8.97 stock a double. Sterne Agee reiterated its Buy rating and assigned an $18 target price. The consensus price target is closer to $11. Another call was seen from BMO Capital Markets, raising its rating to Market Perform from Underperform (sell), and its price target was raised to $9.50 from $7.00.
is perhaps an overlooked and forgotten software and hardware player in storage. Shares closed at $4.41 on Friday after falling almost 4%, but Roth Capital Partners started coverage on Friday with a Buy rating and gave it a price target of $7.00. This implies nearly 60% upside, and the consensus price target is $6.00 on the stock.
saw a very unusual gain of almost 14% on Friday. The driving force was an analyst report from CIBC World Markets with a $3 price target. That would imply upside of more than 50%, even from the $1.93 post-upgrade gain on Friday. Just keep in mind that this was a $1.50 stock at the close of trading last Wednesday, so it has already ramped up 29% in just the past two trading sessions and on strong trading volume.
was covered much more favourably than rival Staples by Morgan Stanley, with an Equal Weight rating versus an Underweight rating. The Equal Weight might not be excessively bullish, but the $6.35 price target implied upside of 12% from the $5.66 prior close and slightly more than the $5.62 closing price on Friday.
was reiterated as Buy at Merrill Lynch earlier last week in more detailed coverage. While the consensus price target is $4.25, Merrill Lynch maintained its $5.00 price target. Sirius XM closed at $3.43 on Friday, implying upside potential of 45%.
was started with an Outperform rating on Thursday by Northland Securities. The $340 mln audio technology player was at $9.43 prior to the call, but by Friday’s close the stock was down to $9.01. Northland’s $15 price target now implies 66% potential upside. Its 52-week range is $7.58 to $17.90, and at least one other analyst sees the stock valued even above $20.
was picked up in new coverage by H.C. Wainwright & Co. on Friday with a Buy rating and a $2.65 price target. This microcap wireless and payment player closed at $2.02 on Friday, implying more than 30% upside remains. Its 52-week range is $1.40 to $2.48, and its market cap of $72 mln values it at well under two-times current revenue trends.
Last week’s high upside analyst picks under $10 included shares of Apollo Investment, Atlantic Power, BlackBerry, Ballard Power, Compugen, Orbitz, MeetMe and more for a total of 11 stocks. Also, our coverage of Friday’s key analyst upgrades and downgrades included Alcoa, Cigna, Intel, Molina Healthcare, Teva Pharmaceutical, UnitedHealth and more than a dozen additional stocks.