Investing

8 Analyst Stocks Under $10 With Huge Upside Targets

Jon C. Ogg

Groupon

Groupon Inc. (NASDAQ: GRPN) was given a key upgrade from Wunderlich on Wednesday, to Buy from Hold. The firm further raised its price target to $10 from $6 after the stock had closed at $7.56 the prior day, and it ended the week at $7.61. The consensus price target was $8.73 prior to the call, and the consensus target was $8.93 as of Friday’s close.

Wunderlich surveyed over 300 consumers, and the result showed that 78% of recent buyers intend to buy again within three months. Most of the trends were in local deals, and only 6% of those surveyed indicated that they would buy less ahead. If Wunderlich is right, there is an implied 31% or so upside in Groupon, even from the most recent close.

Navios Maritime Partners

Navios Maritime Partners L.P. (NYSE: NMM) is being included here because the stock was at $9.75 when this call was made. The dry cargo vessel operator was raised to Buy from Hold at Deutsche Bank on Monday. It was also given a $15 price target, and it comes with a 16% yield equivalent, if that can be sustained. Even with shares at $11.08 as of Friday’s close, this is a call that implies upside remaining of about 36%, even before taking the massive dividend or distribution into consideration.

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Novavax

Novavax Inc. (NASDAQ: NVAX) was started as Buy at Citigroup, with a $10 price target. The biotech just released positive data on its Ebola vaccine. Shares rose by 8% to $8.22 on Friday after the Citi upgrade. Still, 24/7 Wall St. would point out that the company just raised $175 million or so in a stock offering this week — and guess which Wall Street firm was one of the two book-runners for the offering. If you want a hint, it rhymes with Citigroup.

The company’s drug data presentation was in an animal study, and the company said that the animals immunized with Novavax’s EBOV GP Vaccine remain healthy 18 days post-challenge. Novavax was a $9.50 stock just on Wednesday and it went as low as $7.50 before recovering.

Orexigen Therapeutics

Orexigen Therapeutics Inc. (NASDAQ: OREX) remains a small-cap stock, despite the obesity drug Mysimba receiving European approval this week. Orexigen is also the subject of class action lawsuits over investor losses. Still, RBC Capital Markets raised its target price to $14 from $10 on Friday, and the firm maintained its Outperform rating. With a $7.54 closing price for the week, this leaves an implied 85% upside, if RBC is correct. Orexigen has a 52-week trading range of $3.11 to $9.37 and a consensus price target closer to $13.50.

Pernix Therapeutics

Pernix Therapeutics Holdings Inc. (NASDAQ: PTX) was started as Outperform at Oppenheimer on Thursday. What stood out here was the $15 price target. That was versus the $9.68 prior closing price and compares to a $10.21 close on Friday. This implies close to 50% upside, if the firm is correct.

Oppenheimer called Pernix an emerging specialty pharma company that offers a “scarcity value of small-cap spec-pharma integrators.” It also sees a renewed focus on organic growth via Treximet and Silenor, upside potential from the pending Zohydro acquisition, and more value that may be unlocked from its Treximet lifecycle management. Also, the $15 price target is a sum-of-parts valuation for Treximet, Silenor and Zohydro, but it does not reflect upside potential from additional asset acquisitions.

Regions Financial

Regions Financial Corp. (NYSE: RF) is making another appearance on the analyst stock picks under $10 this week. A firm named Compass Point raised its rating to Buy from Neutral on Friday. It also raised the target price to $11 from $10 in the call. Regions shares did not respond to the call at all, because the stock closed down 0.8% at $9.23 on Friday. Its 52-week range is $8.59 to $11.28 and the consensus price target is $10.54.

Investors may recall that things are getting better for Regions, or so it would seem after the Federal Reserve approved the bank’s request to increase its dividend to $0.06 from $0.05 per quarter — and it approved the bank’s request to use up to $875 million to repurchase common stock. That doesn’t sound too shabby when you consider that its market cap is about $12.4 billion.

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In case you missed the prior week’s analyst picks under $10, there 11 stocks in that report: Yamana Gold, Petrobras Argentina, NMI Holdings, New Gold, Black Diamond, Care.com, Cerulean Pharma, Energous, Information Services Group, Inotek Pharmaceuticals and Neovasc.