Most firms on Wall Street focus on large and mega-cap stocks, as they provide a degree of safety and liquidity. Unfortunately, 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 on to a winner, as you can always sell half and keep half.
We screened our 24/7 Wall St. research database and found three biotech stocks trading under $10 that could provide investors with some solid upside potential. While these are more suited for aggressive accounts, they could prove exciting additions to portfolios looking for solid alpha potential.
While not very well known, this company has huge upside potential. Avadel Pharmaceuticals PLC (NASDAQ: AVDL) offers various drug delivery platforms, including Micropump, LiquiTime, Trigger Lock and Medusa. The company offers its products in various categories, including hospital (including Bloxiverz, Vazculep and Akovaz) and pediatrics (including Karbinal ER, Cefaclor for Oral Suspension, AcipHex Sprinkle and Flexichamber).
Bloxiverz is a drug used intravenously in the operating room for the reversal of the effects of non-depolarizing neuromuscular blocking agents after surgery. Vazculep is used to treat clinically hypotension resulting primarily from vasodilation in the setting of anesthesia. Akovaz is indicated to treat clinically hypotension in the setting of anesthesia. Cefaclor is indicated for the treatment of otitis media, lower respiratory infections, pharyngitis and tonsillitis, urinary tract infections, and skin and skin structure infections, caused by susceptible organisms.
The consensus analyst target price at Thomson Reuters was last seen at $16.95, but the shares closed trading on Thursday at $4.82 apiece.
This small-cap biotech company also has big-time potential. Cidara Therapeutics Inc. (NASDAQ: CDTX) is a clinical-stage biotechnology company is engaged in the discovery, development and commercialization of anti-infectives. It is developing a pipeline of product and development candidates with a focus on serious fungal infections.
The company’s product portfolio consists of over two formulations of its echinocandin. CD101 IV is a long-acting therapy for the treatment and prevention of serious, invasive fungal infections. CD101 topical, its second product candidate, is being developed for the treatment of vulvovaginal candidiasis (VVC) and recurrent VVC, a prevalent mucosal infection.
Cantor Fitzgerald has a Buy rating and a $15 price target on the stock, while the consensus target is $13.19. The shares closed most recently at $4.15.
Here too, the low price makes this stock an attractive target. Rigel Pharmaceuticals Inc. (NASDAQ: RIGL) is engaged in the discovering, developing and providing novel small molecule drugs that improve the lives of patients with immune and hematological disorders, cancer and rare diseases.
The company’s pioneering research focuses on signaling pathways that are critical to disease mechanisms. Its clinical programs include clinical trials of fostamatinib, an oral spleen tyrosine kinase inhibitor, in a number of indications.
Citigroup recently initiated coverage of Rigel with a Buy rating and an $8.50 price target. That compares with the $7.92 consensus target as well as the most recent close at $3.20 a share.
These are three stocks for aggressive accounts that look to get share-count leverage on companies that have sizable upside potential. While they are not suited for all investors, these are not penny stocks with absolutely no track record or liquidity, and major Wall Street firms have research coverage on all of them.