The bull market in equities hasn’t yet run its course, if the past two weeks are any guide. And now that more than 95% of all S&P 500 stocks have issued quarterly results with about half the September quarter still to run, it may be a good time to check for some potential winners among the thousands of equities available.
24/7 Wall St. reviews dozens of analyst research reports each morning. This ends up being hundreds of analyst reports each week. Our goal is to find new investing and trading ideas for our readers.
In the category of stocks to buy, it is the speculative and low-priced stocks that can come with far greater implied upside than Dow and S&P 500 stocks. Safe stocks to buy come with analyst upside targets in the range of 8% to 15% at this point in the bull market. The projected upside in speculative companies is often more than 30%, 50% or even over 100%.
Before blindly jumping in here looking for massive upside, investors need to take some caution. Not every upside target will be hit. Some serious issues can ruin the story, and sometimes analysts have assumptions that prove to be entirely wrong. And sometimes outside forces or unexpected events will wreck a company’s upside. Then are instances where management just falls short on its ability to deliver.
24/7 Wall St. frequently warns that there is no free lunch when it comes to investing. That is true for stocks, bonds, commodities and just about every other asset class. It often does not seem fair when it happens, but you can make projections that come true and then the market simply refuses to value it with the same upside. Sometimes companies even implode and disappear. Again, there’s no free lunch on Wall Street.
So, investors need to understand that low-priced stocks and small cap stocks generally come with larger risks. Even all that huge potential upside doesn’t change that. These are the analyst stock picks with huge upside targets in the under-$10 segment from the week of August 19.
Angie’s List: Emily’s List Is the Political One
Angie’s List Inc. (NASDAQ: ANGI) was raised to Outperform from Market Perform at Raymond James with a $12 price target, which compares with a $9.70 Friday close.
Aratana: It’s a Dog’s Life
Aratana Therapeutics Inc. (NASDAQ: PETX) was reiterated as Buy and the price target was raised to $13 from $12 (versus a $9.11 close on Friday) at Jefferies. The firm said:
PETX should drive significant upside to its valuation by executing on its upcoming US commercial launches of Entyce and Nocita, and continuing to advance its robust pipeline from a solid cash position. The underappreciated Q3’16 readout for AT-018 pilot study shows favourable risk/ reward, and the off-the-radar ViroVet stake represents upside potential. We are raising our Price Target to $13 and reiterating our Buy rating.
Broadwind: Thar She Blows
Broadwind Energy Inc. (NASDAQ: BWEN) was started with an Outperform rating and assigned a $6 price target (versus a $4.62 close) at Cowen.
Nokia: Betting on the Next Network Technology
Nokia Corp. (NYSE: NOK) recently merged with Alcatel-Lucent and the combination is set up to win as next generation (5G) network technology is rolled out. Argus rates the stock a Buy with a $10 price target (versus a Friday close of $5.67).
Tracon: Fighting Cancer
Tracon Pharmaceuticals Inc. (NASDAQ: TCON) was started as a Buy on Friday at BTIG with price target of $15. The stock closed at $6.40 a share on Friday.
Rockwell Medical: Made of Iron
Rockwell Medical Inc. (NASDAQ: RMTI) was initiated at BTIG with a Buy rating and a price target of $12 per share. Shares closed at $7.22 on Friday.
Karyopharm: No Nukes
Karyopharm Therapeutics Inc. (NASDAQ: KPTI) was started at H.C. Wainwright with a Buy rating and price target of $15, compared with Friday’s closing price of $8.08. Shares closed $6.99 on Wednesday, the day before the Wainwright report was released.
Arrowhead: On Target
Cantor Fitzgerald started Arrowhead Pharmaceuticals Inc. (NASDAQ: ARWR) stock with a Buy rating and price target of $15 (versus Friday’s closing price of $7.50). Prior to Cantor’s release. the stock closed at $6.34.
Teekay Offshore: Sail Away
Teekay Offshore Partners L.P. (NYSE: TOO) was upgraded on Thursday from Sector Perform to Outperform with a price target of $8. Common units closed at $5.24 on Wednesday and $5.74 on Friday, after touching $5.99 on Thursday.