Investing

5 Small Cap Analyst Stocks Under $10 With Massive Upside Potential

JAKKS Pacific

JAKKS Pacific Inc. (NASDAQ: JAKK) managed to beat earnings expectations recently, and on Thursday the small-cap toy and electronics maker was raised to Buy from Neutral at the boutique firm of B. Riley. It also threw in an $8 price target, which implies upside of 25% from the $6.62 prior close.

Shares closed at $6.66 on Friday, which still leaves an implied upside of about 20%. The market cap is a mere $300 million here, and the stock has a 52-week range of $5.70 to $9.48. Of the five analysts that cover JAKKS, the average price target for the stock is $10 and the median price target is $9.

Ohr Pharmaceutical

This one is a small cap emerging pharma player with a focus on of ocular diseases. Roth Capital issued a new Buy rating on this $195 million stock, and it issued a whopping $30 price target. If Roth is correct, Ohr Pharmaceutical Inc. (NASDAQ: OHRP) has an implied upside of well over 200% from its $7.69 close.

ALSO READ: 5 U.S. Companies Focused on Returning Capital to Shareholders

Only three analysts have targets on this stock listed, and the other two targets are $34 and $20. The company just named a new chief clinical officer, who previously served as Vice President of Ophthalmology at Regeneron and was in charge of the Eylea development program. Ohr recently raised almost $29 million via a securities offering. The underwriters in that offering were Cowen as the sole book runner, Brean Capital and LifeSci Capital as co-managers, and Roth Capital Partners as a financial advisor in the transaction.

Smith Micro Software

Smith Micro Software Inc. (NASDAQ: SMSI) was raised to Buy from Hold at Needham late in the week. The price target for the provider of wireless and mobility solutions provider was put at $2.10, versus a $1.49 closing price on Friday. This implies upside of just over 40%, if Needham is correct.

Smith Micro recently guided 2015 revenues to be between $45 million and $49 million in 2015, which implies growth of 22% to 33% from 2015. Its market cap is a mere $67 million, and its average volume is around 300,000 shares per day. In short, this is far from a household name.

Smith Micro has a 52-week range of $0.66 to $2.69, and it has been public since the 1990s. The firm H.C. Wainwright raised its rating to Buy from Neutral right at the start of 2015, and there are only a handful of analysts which follow this micro-cap stock.

ALSO READ: Despite Stock Market Highs, 13 Major Dividend Cuts

Again, these are all highly speculative stocks by nature. There is a reason you do not see analysts from Goldman Sachs, Morgan Stanley and other bulge bracket firms covering small cap and low-priced stocks very often. If you want proof of just how speculative this category of stocks can be, 24/7 Wall St. has never even covered two of these five stocks in any capacity in the past 10 years.