While most of Wall Street focuses on large and mega-cap stocks, which 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 low to mid hundreds, all the way up to over $1,000 per share. At those steep prices, it’s pretty hard to get any decent share count leverage.
Many investors, especially more aggressive traders, look at lower-priced stocks as a way to not only make some good money but to get a higher share count. That can really help the decision-making process, especially when you are onto a winner, as you can always sell half and keep half.
We screened our 24/7 Wall St. research database and found five energy stocks trading under the $10 level that could provide investors with some solid upside potential. While more suited for aggressive accounts, they could prove exciting additions to portfolios looking for solid alpha potential, and with the OPEC production increase issue out of the way, they all could be poised to trade higher.
This stock was just raised to a Buy at Jefferies, and it is a solid energy exploration and production play. Kosmos Energy Ltd. (NYSE: KOS) is a conventional oil and gas exploration and production company focused on the Atlantic margin. The company focus is on unlocking new hydrocarbon systems and growing and maturing discovered basins through follow-on exploration success, development and production.
Although many companies in the industry have scaled back exploration, Kosmos believes this is the best route to generating value, seeking to replicate its discovery and development of the Jubilee field in Ghana.
Jefferies has a $9.50 price objective for the stock, while the Wall Street consensus target price was last seen at $8.78. The shares closed trading on Friday at $8.45.
This company provides drilling and rig services, and some feel it could be a takeover target. Nabors Industries Ltd (NYSE: NBR) owns and operates the largest land-based drilling rig fleet in the world, and it is a leading provider of offshore platform workover and drilling rigs in the United States and select international markets. Revenues in 2016 were $2.23 billion.
Nabors markets approximately 400 rigs for land-based drilling operations in the United States, Canada and approximately 20 other countries worldwide, as well as 41 rigs for offshore drilling operations in the United States and internationally.
The share price is down over 50% in the past year, which reflects investor focus on its balance sheet and ability to generate free cash flow and pay down debt. This concern has been exacerbated recently by a softer-than-expected earnings report and focus on 2018 non-cash deferred revenues. While most don’t see a quick fix for the company, the worst surely looks to be over.
Nabors investors are paid a 3.87% dividend, though that could be lowered going forward. The Jefferies price target for the shares is $10, and the posted consensus price objective is $9.76. Shares closed well below those levels Friday at $6.53.