With stocks at or close to all-time highs, many investors are looking for new ideas and other stocks that may be lesser known than other big names. 24/7 Wall St. reviews dozens of Wall Street analyst reports and boutique research reports each day, which means we generally see hundreds of research calls each week. The idea is to find new trading ideas and investment ideas for our readers. Some calls cover stocks to buy, and other calls feature stocks to sell.
The search for value often ends up in a different category of undiscovered stocks. These are also frequently in the $10 and under share price category. Many investors believe these stocks under $10 have much more upside than traditional DJIA and S&P 500 stocks.
24/7 Wall St. wants to make more than just the standard caveats that investors need to consider. Some of the analyst calls in stocks under $10 have upside projections of 50%, 100% or even exponential upside to the stated price targets. That doesn’t exactly sound like a normal expectation or risk-reward scenario for most stocks.
We also want our readers to know that low-priced stocks and small-cap stocks generally come with much more implied risks than the traditional large cap or DJIA stocks. Almost none of these low-priced stocks would pass the old “widows and orphans” suitability tests by almost all counts. Another warning should be made here as well, and that is that many speculative analyst stocks do not live up to expectations — and some of them can crash and burn.
We have included a summary of each research call of these top stocks under $10. Also included was a relation to each company’s trading range or the consensus price target to the current prices, and color has been added on each. These were the top analyst stocks to buy under $10 seen in research calls issued this last week.
Callon Petroleum Co. (NYSE: CPE) was technically above $10.00 by the end of the week, but only by six cents and the stock hit $9.99 at one point on Friday. Earlier this past week, Callon was reiterated as Buy and the price target was raised to $17 from $15 at Canaccord Genuity after the company made an accretive acquisition analysis. A move to the target price would generate gains of close to 70%.
Groupon Inc. (NASDAQ: GRPN) was raised to Sector Perform from Sector Underperform at RBC Capital Markets on Wednesday. This may not seem like much on the surface, but getting the equivalent of a Sell rating at other firms caused a move upward. The stock was at $7.06 before the news and rose to as high as $7.28 the day of the upgrade. Unfortunately, Groupon fell at the end of the week and was at $6.82 when the dust settled on Friday. RBC’s price target was raised to $6 from $5 in the call, so now there is less downside perceived — although Groupon’s consensus analyst price target is $7.28.
Glu Mobile Inc. (NASDAQ: GLUU) was named as a potential double after looking at a Cowen report on mobile gaming. This stock remains one of the firm’s top investment ideas going forward. The company is now reaping the success of the moves that it made in its past product cycle to monetize its games in a better and more efficient manner. Its strategy of focusing on leveraging platform strength and creating long-term gaming franchises has proved profitable. Other moves are helping move it along with the fantastic success of the Kim Kardashian: Hollywood game. The Cowen price target is $10, and the consensus target is $7.92. The stock closed at $5.02 ahead of the report, and shares closed at $5.17 on Friday. A trade up to the Cowen target would still be close to a double.