Investing

5 Analyst Stock Picks Under $10 With Massive Upside Projections

MEI Pharma

This one far from a household name, and we must warn that it has a market cap of only $86 million. Late this week, Wells Fargo initiated coverage on this oncology-focused therapeutics player. What stands out is that Wells Fargo assigned a monster valuation range of $10 to $11, based on a sum of the parts. This represents 150% upside to the $10 part of the call, versus the $4.00 recent closing bell price. The stock has a 52-week range of $3.57 to $13.98, and we found it interesting that this is said to be the lowest price target of the other handful of analysts that cover it.

The Wells Fargo call on MEI Pharma said that Pracinostat and Vidaza are ushering in a new era of MDS and AML. The report said:

MEI’s lead drug HDAC inhibitor pracinostat has generated compelling, albeit early, clinical responses, astounding molecular remissions, and a good tolerability profile (as compared to other HDACi’s) in combination with Vidaza in MDS in a study conducted at MD Anderson and more recently in 1st Line elderly AML (at ASH 2014), and HMA-refractory MDS.

One warning: some approvals are not expected until 2019 or 2020.

Westell Technologies

On Friday, Northland Securities maintained this stock as Outperform. The price target was lowered slightly, to $2.25 from $2.50. Usually we would avoid calls of this sort, but the $1.26 closing price on Friday implies an upside of almost 80%. As far as we can tell, this may be the only active analyst call on Westell.

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Be advised that Westell’s most recent report, from February 4, said that revenue was being affected by carrier spending slowdowns and capital spending delays. Despite saying that it thinks 2015 is off to a good start, Westell is laying off workers and consolidating its facilities of operation.

The market cap of $75.6 million for the telephone products company compared to its last quarter sales of only $14 million, and the stock’s 52-week range is $0.96 to $4.73. This stock reached above $30 a long time ago — during the tech bubble of 2000.

Yamana Gold

Merrill Lynch resumed coverage of Yamana this week with a Buy rating, after a recent equity issuance. After shares dropped over 7% to $4.15 on Friday, along with gold, this implies exactly 50% upside expected to the firm’s $6.25 price objective.

Merrill Lynch reported that Yamana is entering a period of strong free cash flow generation of $272 million in 2015 and $295 million in 2016, versus negative $208 million or so in 2014. The report also indicated that Yamana is trading at a 28% discount to its peers on a price to net asset value basis. The fresh share issuance also let Merrill Lynch take down its forecast for the end 2015 and 2016 on net debt to $1.3 billion in 2015 and $1.1 billion in 2016 from prior respective targets of $1.1 billion and $1.6 billion.

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Last weekend, 24/7 Wall St. featured 8 analyst stock picks under $10 with huge upside. These included Genworth Financial, Groupon, JA Solar, Ruckus Wireless and more.

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