The stock market has remained very choppy so far in 2015. Still, the bull market is now six years old and many analysts and market pundits expect the gains to resume in the months ahead. Investors keep looking for value or undiscovered stories, and they keep buying their favorite stocks on pullbacks.
24/7 Wall St. reviews dozens of analyst reports each morning to find new trading and investing ideas for its readers. While some analyst calls cover stocks to buy and some cover stocks to sell, a review for major upside calls at the end of each week almost always leaves many stocks trading under $10 in which analysts see enormous upside potential.
Analyst calls in Dow Jones Industrial Average stocks may be for upside of 10% or 20%, but small-cap and low-priced stocks often come with analysts calling for upside of 30%, 50% or even 100%. This also implies that there is more rick — much more risk. The higher the risk, the higher the expected returns.
Keep in mind that analyst calls frequently do not live up to expectations. They are just a riskier class of stocks. Some of the calls may even feel like they are all-or-none gambles. Some small-cap stocks actually implode or stay beaten down for many years.
Investors sometimes believe is that small-cap and low-priced stocks eventually grow into huge companies. If history has proven one point, it is that some companies make it big, but most companies do not.
This past week 24/7 Wall St. tracked eight key analyst calls in stocks that were trading under $10 at the time. They are Christopher & Banks Corp. (NYSE: CBK), CytRx Corp. (NASDAQ: CYTR), Diana Shipping Inc. (NYSE: DSX), FuelCell Energy Inc. (NASDAQ: FCEL), MannKind Corp. (NASDAQ: MNKD), Medgenics Inc. (NYSEMKT: MDGN), Plug Power Inc. (NASDAQ: PLUG) and PMC-Sierra Inc. (NASDAQ: PMCS).
A runner-up call has been included that would have made for nine key analyst calls in stocks under $10, but its shares rallied too much now to be counted in the sub-$10 category. These are this week’s eight analyst calls for huge upside in stocks trading at $10 or less.
Christopher & Banks
This women’s apparel and accessories retailer received an upgrade this last Monday from Piper Jaffray, from Neutral to Overweight, and with the price target rising to $10 from $5. The prior closing price was $5.63, but shares were back down to $5.74 on Friday after they initially went up to over $6.00 on the upgrade. The consensus analyst target for this stock is $8.00, and the shares have a 52-week trading range of $4.12 to $11.22.
CytRx was started as Outperform with a price target of $10 at Oppenheimer on Friday morning. Given the prior $4.50 close, this implies more than a double, if the firm is correct.
Oppenheimer said that its lead candidate, aldoxorubicin (aldox), leverages this albumin-based platform technology to enhance the therapeutic window for doxorubicin, but also noted that toxicity limits its therapeutic utility. Clinical data suggests that aldox appears to improve upon safety. Aldox is currently in Phase 3 trials in patients with advanced metastatic soft-tissue sarcoma and the company is also developing aldox in small-cell lung-cancer and glioblastoma. The firm sees aldoxorubicin as an initial proof-of-concept.
Oppenheimer’s “double your money call” caused an 11% rally to $5.01 on Friday, but that is still effectively a call for it to double. Be advised Oppenheimer appears to be the sole analyst with a price target here.