7 Analyst Stock Picks Under $10 With Huge Upside Calls
With the bull market now almost six and a half years old and with the Federal Reserve expected to raise interest rates soon, investors are often looking beyond traditional Dow and S&P 500 stocks for value and upside. Investors also keep buying stocks on every pullback. 24/7 Wall St. reviews dozens of analyst upgrades and downgrades each day of the week to find hidden values and to find new trading and investing ideas for its readers. Some calls cover stocks to buy, and some of these stocks to buy are in small-cap names or in companies with a share price under $10.
Most price targets from analysts in Dow and S&P 500 stocks call for upside of 8% to 15%, but in small-cap and low-priced stocks you often see calls for upside of 25% or much higher. The first thing that investors need to consider here is that small-cap stocks, and most stocks with share prices under $10, come with much more risk than traditional stocks.
24/7 Wall St. has reviewed six positive analyst calls from this last week where the share price was less than $10.00 at the time of the call. Again, these generally carry a much wider degree of risk than Dow and S&P stocks. We have outlined a very detailed explanation of risks and warnings for investors on the second page of this article.
AK Steel Holding Corporation (NYSE: AKS) had earnings, and investors still are just having hard time evaluating the core business and its turnaround. Not every analyst was positive on the stock, but shares were up 20% for the week at one point. JPMorgan raised AK Steel’s rating to Overweight from Neutral on Thursday morning, and they assigned a $5.00 price target.
Still, AK Steel closed down almost 6% on Friday and the consensus price target is $4.87. AK Steel has a 52-week range of $2.38 to $11.37.
Precision Drilling Corporation (NYSE: PDS) was in a very positive group call by Merrill Lynch this week. While this was no formal upgrade, the reality is that the firm sees huge upside if things correct in the sector. The Canadian oil services stock has a $7.00 price objective at the firm, implying upside north of 40% if its dividend north of 4% is sustainable.
PDS closed at $5.09 on Friday against a 52-week range of $4.53 to $12.83, and the consensus price target is even much higher at almost $9.50 as of now.
Sirius XM Radio Inc. (NASDAQ: SIRI) got through earnings by closing higher at the end of the week than it came into the week. Wunderlich Securities raised its rating to Buy from Hold with a $4.60 price target. Sirius XM shares closed on Friday at $3.96 and its consensus analyst target rose to $4.55 from $4.46 as result of this call.
Sirius XM has a 52-week range of $3.14 to $4.04, and shares even briefly hit $4.00 three days this week for the first time since April 29.
Scorpio Bulkers Inc. (NYSE: SALT) was raised to Buy from Hold at Deutsche Bank on Wednesday, and the price target was raised to $3.00 after an 8.5% gain to $1.79 the prior day. Shares closed on Friday at $1.81, but there was also news that Scorpio Services Holding Ltd. purchased an aggregate of 1,050,000 common shares of Scorpio Bulkers in the open market at an average price of $1.88 per share.
This $607 million market cap of Scorpio Bulkers comes with a consensus price target of $3.42 and a 52-week range of $1.30 to $8.26.
Sonus Networks, Inc. (NASDAQ: SONS) saw its shares surge this week after earnings and on positive carrier news. Sonus was raised to Outperform from Market Perform with a $10 price target at Barrington Research on Wednesday.