The markets have bounced handily from their lows, and investors are showing over and over that they will buy value or overlooked stocks when they can. 24/7 Wall St. reviews dozens of analyst calls each morning of the week, which comes to hundreds of analyst reports each week. Many investors like to find value in small-cap or low-priced shares trading under $10. This week the floodgates for earnings season opened, but there were still six low-priced stocks under $10 with key analyst calls we tracked.
Be warned that small-cap and low-priced stocks are often much less covered than Dow and S&P 500 stocks. They often have far more risk as well — some could even fail. They rarely pass the classic “widows and orphans” suitability test.
Still, investors often love to flock to these because they think there is more potential upside in low-priced and small-cap stocks than in established companies worth billions and with high share prices. This belief is often mistaken or seriously misguided, but that is how some investors treat stocks.
These are this past week’s top analyst calls with share prices under $10.
Groupon Inc. (NASDAQ: GRPN) is a company in daily deals and promotions that seems so yesteryear. Still, it was started as Buy at Brean Capital on Wednesday. The firm assigned it an $8 price target, compared with the prior closing price of $6.22. Interestingly enough, Groupon closed at $6.05 on Friday, still leaving implied upside of more than 30%. Groupon’s consensus analyst price target is $7.30 and its 52-week range is $5.18 to $12.42.
MFA Financial Inc. (NYSE: MFA) was given a new Outperform rating from JMP Securities. The $8.50 price target may not seem that ambitious, considering that the stock closed at $8.32 on Thursday before the rating was issued. Note that this is a near 10% yield in the MBS-REIT sector.
Nokia Corp. (NYSE: NOK) was given mixed comments at Bernstein, but Canaccord Genuity raised its price target to $13 from $12 as its long-term growth drivers remain intact. The call was late in the week, after Nokia’s earnings report sent shares higher. Nokia was at $7.93 in New York ADS trading ahead of earnings and closed out the week at $8.34.
Regions Financial Corp. (NYSE: RF) is one of those strange instances when the stock was downgraded, but with positive comments. The bank’s rating was dropped to Outperform from Strong Buy and the price target was cut to $11 from $12 at Raymond James. The prior close was at $9.26, and shares closed at $9.44 on the week. This is still big upside for a bank if you consider that the rating is still positive.
RealNetworks Inc. (NASDAQ: RNWK) was started as Buy at B. Riley on Tuesday. What stood out was the firm’s $12.50 price target versus a $6.23 close, a call that is effectively an expectation to double. Shares closed at $6.96 on Friday.
Support.com Inc. (NASDAQ: SPRT) is often forgotten about these days, with its $114 million market cap. Sidoti started coverage at Buy on Wednesday. While no price target was seen in the call, the stock was at $2.05 on the day and closed at $2.11 on the week. It seems that someone at least believes in its ability to help companies to resolve connected technology issues.
Last weekend we featured 9 analyst calls in stocks under $10 with huge implied upside, including AMD, AK Steel, Dot Hill, Orbits, Quantum Fuel and others.
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