Investing

8 Stocks Under $10 Analysts Want Investors to Buy Into the Sell-Off Carnage

Apollo Investment Corp. (NASDAQ: AINV) is a closed-end management investment company that is under the larger Apollo Investment Management group. On February 8, Wells Fargo raised its rating to Outperform from Market Perform. On the same day, SunTrust Robinson Humphrey maintained its Buy rating but lowered its target to $6.50 from $6.75, and KBW maintained its Outperform rating but lowered its target to $6.25 from $6.50.

Apollo Investment has an 11% dividend yield. Its market cap is $1.16 billion, and the shares closed down 3% at $5.30 on Friday. It ended 2017 with a net asset value per share of $6.60, and it has a 52-week trading range of $5.30 to $6.82. Its shares are down about 6% so far in 2018. The consensus analyst price target is $6.27.

Cleveland-Cliffs Inc. (NYSE: CLF) has been down and out from its former glory days, but Credit Suisse thinks that is about to change. The stock was raised in a rare two-notch upgrade to Outperform from Underperform at Credit Suisse, which raised its price target to $9 from $5. The firm noted that higher core USIO free cash flows and a valuation uplift from tax reform to its HBI project will add value ahead. Shares of Cleveland-Cliffs were up 4.8% at $6.76 ahead of this call, and the stock was initially trading at $7.00 on Wednesday after the call — but the market selling put shares at $6.62 by Friday’s close.

Cleveland-Cliffs shares have a 52-week range of $5.56 to $12.37, and the stock is now down 8% so far in 2018. The market cap is $1.96 billion. Cleveland-Cliffs was a more than $20 stock in 2013, and it was above $90 briefly in 2010. The consensus price target is $8.13.

Just Energy Group Inc. (NYSE: JE) is small Canadian energy management solutions provider that operates in electricity, natural gas, solar and green energy in the United States, Canada, Europe and Japan. It has a $655 million market cap, and Friday’s closing price of $4.52 was down 1% on the day but was up about 10% from earlier in the week after posting a profit of $0.87 per share on $718 million in revenues and on news that it is acquiring EdgePower. It serves approximately 1.5 million residential and commercial customers. On February 8, during the market selling pressure, CIBC raised its rating to Outperform from Neutral and Canaccord Genuity raised its rating to Buy from Hold. RBC Capital Markets had raised its rating to Outperform back in December as well.

At $5.52, Just Energy’s American depositary shares (ADSs) have a 52-week range of $3.86 to $6.35, and they are up about 28% so far in 2018 after having seen a sharp drop in November. Just Energy’s consensus price target is $4.52.

Nokia Corp. (NYSE: NOK) was raised to Buy from Hold at Merrill Lynch on February 5, with the firm noting an attractive valuation and solid position heading into the coming 5G upgrade cycle. Much of that steam is expected to pick up in the second half of 2018. Merrill Lynch’s target rose to €5.25 from €4.50 (implying 19% upside from its €4.40 prior close). On the previous Friday, Nokia was raised to Buy from Neutral with a $7.50 price target (versus a $5.40 prior close) at MKM Partners.

Nokia’s ADSs were up almost 1% at $5.40 as of Friday, February 9, and the 52-week range is $4.51 to $6.65. They are still up 15% so far in 2018. This is by far the largest company in the sub-$10 stocks, with a $29 billion market cap, and Nokia has a consensus price target of $6.57.

OncoSec Medical Inc. (NASDAQ: ONCS) is a tiny $70 million biotech outfit that targets cancer, and its lead product candidate (ImmunoPulse IL-12) is in Phase 2 trials and is indicated for targets in metastatic melanoma and triple negative breast cancer. Piper Jaffray came out on February 9, basically at the peak of the market selling pressure, and started OnceSec with an Overweight rating with a $4 price target. This call is more than a double if it comes to pass, and it would have received better attention had the selling panic not been such a dominating force in the news cycle. Note that OncoSec raised $20 million in equity sale at $1.50 per share a week earlier, and that financing was led by Piper Jaffray as the book-running manager.

OncoSec’s $1.64 price is down from over $2.00 in mid-to-late January, but its stock is actually up a penny so far in 2018 despite the market sell-off. The 52-week range is $0.88 to $2.95.

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