Thirteen Analyst Stocks Under $10 With Huge Upside Potential

Stocks hit a new all-time this last week on the heels of a strong unemployment and jobs number. Now investors have to decide whether the next year or more will simply be a sustained bull market or if it will be a stock picker’s market. 24/7 Wall St. reviews dozens of analyst research reports each day of the week for new ideas and hidden gems for our readers. We generally see many upside and downside stocks in these reports, but stocks trading under $10 often have massive upside potential in these analyst calls.

24/7 Wall St. of course wants to remind readers not to ignore the risks here. Stocks under $10 are often among the riskiest in the stock market. Only four of the stocks in the S&P 500 Index have share prices under $10, and only one is under $9.

Many investors are attracted to lower-priced high-volume stocks. Whether this is true remains a constant debate, but many of the investors believe that there is larger room for upside.

You almost never see an analyst say that a Dow Jones Industrial Average (DJIA) stock has 50% upside or more. You frequently hear the analysts covering speculative stocks showing upside of 50%, 100% or even more.

Very few of these sub-$10 stocks would pass a “widows and orphans” suitability test. This is what brokers and financial advisors have to consider when it comes to ethics and suitability for clients.

All caveat emptor (buyer beware) warnings aside, you can see the major analyst calls in stocks under $10 from this past week. Just to come up with a list of this sort, it requires filtering through hundreds of analyst report summaries.

These are the ten analyst stocks (plus three runners up) we tracked this past week that were trading under $10 and have huge implied upside, if the analysts are correct in their calls.

Amicus Therapeutics Inc. (NASDAQ: FOLD) provided a final analysis plan for its Phase 3 Fabry monotherapy study with top-line data coming in the third quarter. Deutsche Bank liked the news earlier in the week and raised the rating to Overweight, sending the stock up more than 20% to $3.68 on Monday. Then came more upgrades: to Buy from Neutral at Janney with a $5.00 price target (from $2.50) and to Outperform from Market Perform at Leerink Swann. Amicus shares were up more than 5% to $4.20 late in the week. Maybe that eats up the upside potential, but the consensus price target is still up at $6.00, implying close to 50% upside.

Alcatel-Lucent S.A. (NYSE: ALU) was raised to Overweight from Neutral at J.P. Morgan on Wednesday. The French communications equipment turnaround saw shares pop about 4% to $3.67 on Wednesday, and the stock closed the week at $3.70. This turnaround remains ongoing, but there is still almost $1.00 more before its 52-week high even comes into play. Imagine if the turnaround really starts to eventually work.

Enphase Energy Inc. (NASDAQ: ENPH) was started with a Buy rating and given an $11 price target at Canaccord Genuity on Wednesday. The stock had a great week, and the share price was up another 3% to $9.36 at the end of the week. Keep in mind that Enphase was also named as one of our alternative energy stocks with massive upside potential, and $11 might be very conservative if the company lives up to our solar expectations.

Glu Mobile Inc. (NASDAQ: GLUU) had a solid week, and we saw one analyst keep a bullish stance. Needham & Co. maintained its Strong Buy rating and raised its target price to $7 from $6 in the call. The consensus price target is just under $6, and the stock ended the week at $5.28, up more than 2%.

MannKind Corp. (NASDAQ: MNKD) saw its stock trade lower after the FDA approval of Afrezza inhalable insulin. Several analysts remained cautious, and this took the stock as low as $9.71 before recovering to $10.00 by the end of the week. While no major upgrade was seen, we allowed our reader base to “play analyst” and about 65% of the 1,947 responders see the stock going back above $15 as we get into 2015.

Merrimack Pharmaceuticals Inc. (NASDAQ: MACK) was featured positively this past week by Cowen. It was highlighted as one of seven stocks with Phase 3 data that had solid opportunity heading into the FDA approval process. Its pancreatic cancer drug study is in phase 3 trials, with one-quarter of patients having survived. The consensus price is at $13.40, and shares of the stock closed the week at $7.46.

Miller Energy Resources Inc. (NYSE: MILL) saw a big boost on Monday, rising some 13% to $6.20 after the news that SunTrust Robinson Humphrey raised its rating to Buy from Neutral and raised the price target to $10 from $8. Even after that $6.20 jump, this represents some 61% upside. Shares were at $6.40 at the end of the week, and the consensus price target is $8.07.

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PetroQuest Energy Inc. (NYSE: PQ) saw two boosts via price target hikes on Monday. One was up to $8 from $7 at Global Hunter Securities, and the second price hike was to $8.50 from $7.50 at Stifel Nicolaus. Shares were at $7.50 before the move and were down at $7.47 shortly after the Monday research notes. Shares were down fractionally at $7.43 to end the week, against a consensus price target of only $7.87.

Sequenom Inc. (NASDAQ: SQNM) was started as Buy with a $5 price target (versus a $3.97 close) at Jefferies on Thursday. Sequenom burned so many analysts and investors in years past over botched medical testing efficacy that any upgrade gets noticed. Shares were up less than 3% at $4.08 at the end of the week, and the consensus price target is $4.70.

SFX Entertainment Inc. (NASDAQ: SFXE) was started as Overweight at a firm called Albert Fried & Co. this past week. The live entertainment operator’s price target was $11, and the shares were up as much as 6% at $8.10 after the call, with no other news out at the time. Still, shares were back down to $7.60 in late-week trading. If this small firm is correct, the stock could rally 44%. Only three analysts cover the stock, and the range of target prices is as low as $11 and as high as $17.

There are several other runner-up calls of note from this last week, but we would caution that these are even less known than the above stocks under $10. Some have almost no real trading volume and some we have hardly heard of, so you are on your own exponentially more than with the prior names.

BioLineRx Ltd. (NASDAQ: BLRX) is a tiny $71 million biotech outfit, and the firm Roth Capital Partners started coverage with a Buy rating. While we did not see details in the call, the price target was said to be $8, almost 300% higher than the $2.06 prior close and $2.11 end-of-week price. Be advised that this may have been the first time we have ever seen an analyst cover this stock.

Energy Fuels Inc. (NYSEMKT: UUUU) is a thin volume and very volatile uranium miner, so you know it has risk. The firm HC Wainwright started coverage on Wednesday with a Buy rating and an $11 price target. Shares were at $7.52 at the time, but the stock was up to almost $8 shortly before the close of this week’s trading. Keep in mind that the 52-week trading range is $0.11 to $11.85, and trading volume is only about 35,000 shares per day.

ALSO READ: Four Stocks With Solid 9.5% Dividend Yields (or Higher)

Lombard Medical Inc. (NASDAQ: EVAR) also has tiny volume, and we have previously not seen analyst coverage on the $113 million small cap endovascular stent-grafts player. After its Aorfix was highlighted at the 2014 Critical Issues Symposium as the only stent graft specifically approved by the FDA to treat highly angulated AAAs, Credit Suisse started overage at Outperform and with a $10.50 price target. The stock was trading at $7.00 at the week’s close.

Last weekend’s analyst stock picks under $10 included shares of Ampio, Atlantic Power, Coeur Mining, Dot Hill, DragonWave, Office Depot, Sirius XM and more.

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