This last week was not exactly a great week for the bull market. After the bull market has now officially turned five years old from its March 2009 bottom, the Dow Jones Industrial Average has now fallen five straight days. Still, there is always a bull market somewhere — and Deutsche Bank recently warned that investors should brace for a 5% correction.
24/7 Wall St. tracks dozens of analyst upgrades and downgrades each morning, hunting for stocks to buy and sell that readers should consider. It turns out that not all analysts shy away from the low priced stocks of $10 and under. In fact, there were at least six standout calls this week from Wall Street analysts covering stocks under $10.
We have shown brief explanations of each analyst upgrade covering stocks under $10 from this last week. Color has been added on each, and we have shown what the implied upside is on each call based upon Friday’s closing price. After all, new readers might not get the price as when the analysts started coverage. Lastly, a link has been provided for more detail on each call if we covered it this last week.
Advanced Micro Devices Inc. (NYSE: AMD) rose on Tuesday after a firm called Ascendiant Capital started coverage of the graphics and processor company with a Buy rating. AMD got another boost after the sovereign wealth fund of Abu Dhabi exercised warrants to buy 34.9 million more shares the prior week to take its stake up to 18.6%. Ascendiant’s price target was $5.00, implying upside of 30% from the $3.85 close on Friday. Shares tried again to challenge that $4 level on the news, and we would point out that AMD was also named earlier by 24/7 Wall St. as one of Nine Stocks That Could Double in 2014.
Atmel Inc. (NASDAQ: ATML) closed higher by almost 4% on Friday — on a weak market day — after the chip and circuit maker was started with a Buy rating and an $11 price target (implying about 38% upside from the $7.99 close) at Bank of America Merrill Lynch. The close of $8.30 still leaves an implied 32% or so upside in the call. Atmel’s consensus price target was only $8.77 at the time ($8.92 now), and the prior highest target was $10 before this upside target was left.
J.C. Penney Co. Inc. (NYSE: JCP) was the beneficiary of a very controversial upgrade this week. It was an upgrade which some investors even felt was off the mark, but that is Wall Street for you. Citigroup raised the rating to Buy from Neutral, and raised the price target to $11 from $7.50 on Tuesday. Citi thinks its positive same-store sales can continue, and it does not believe that the troubled retailer will have to raise much in new additional funds. And on that call being controversial, Sterne Agee basically said not to chase the upgrade.
National Bank of Greece S.A. (NYSE: NBG) seems to be forgotten about, but not by Deutsche Bank. The firm raised its rating on Greek banks after recent stress tests and the revelation that the banks in Greece would need to raise far less capital than some investors were concerned about. The coverage was in euros, but when converted to dollars for the ADR it left an implied upside of close to 20% from the $5.16 closing price in New York trading on Friday. NBG’s ADR reached as high as $5.57 this last week, the highest price in about two months.
Rite Aid Corp. (NYSE: RAD) received a banner recommendation from Goldman Sachs this last week. The firm raised its rating to Buy from Neutral, and raised its price target up to $8 from $5 in the call. This call is one which feels very late to the party considering that we have been covering this turnaround since $1 and $2, but the stock rallied on the news. We also noticed that this was a full $1 higher than any other official analyst price target when the call was made. Rite Aid shares closed at $6.81 on Friday, which implies upside remaining of 17% or so.
Sirius XM Holdings Inc. (NASDAQ: SIRI) is now officially out of the bad merger agreement proposed by John Malone and Liberty Media Corp. (NASDAQ: LMCA). We had originally said that Sirius XM holders were getting hosed in the deal, and now BofA Merrill Lynch came out with a significant call on Friday. The firm reinstated a Buy rating on Sirius XM, with a $5 price target. This implied upside of close to 50%. As we expected, it looks like Sirius XM is just worth far more than what John Malone was willing to pay at that $3.68 per share buyout price.