Investing

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

PennantPark Investment Corp. (NASDAQ: PNNT) was up 1.8% at $6.77 on Thursday after strong earnings despite the big market drop, and its stock closed at $6.90 on Friday, after having been indicated up at $7.00 on Friday morning. Ladenburg Thalmann raised it to Buy from Neutral with an $8 price target.

PennantPark is a business lending and investment company, and it comes with close to a 10% dividend yield. Its market cap is only $490 million, and it has a 52-week trading range of $6.29 to $8.69. Its shares are basically flat so far in 2018. The consensus price target is $8.00.

Pulmatrix Inc. (NASDAQ: PULM) is a tiny $32 million biotech outfit with a proprietary product pipeline focused on pulmonary rare diseases. The firm H.C. Wainwright started coverage with a Buy rating on February 9, and its $5 price target is actually more than 200% higher than the $1.48 prior close. The stock closed up 2% at $1.51 on Friday, and that seriously high price target is actually barely higher than the 52-week high of $4.75. Pulmatrix was briefly a $17 stock back in 2014. The company just disclosed its 2018 business outlook with long-term targets on Friday.

Back in January, Zacks Small-Cap Research said Pulmatrix has a formidable intellectual property portfolio covering its platform technology and product pipeline into the 2030s and said its fair value is $7.50 per share. The stock is too small and too thinly covered to have a consensus price target.

Sirius XM Holdings Inc. (NASDAQ: SIRI) may not be viewed universally as a Buy after its shares have risen, but at $5.82 as of the most recent close, its stock is still up almost 9% so far in 2018. Buckingham Research had initiated Sirius XM with a Buy rating and a $6.50 price target back in mid-January (and Deutsche Bank also raised its rating to Buy at that time), but Buckingham Research came out on February 2 and raised its target to $7. Sirius XM has a more conservative consensus analyst target of $6.23.

A runner-up call has been included because the shares have come so far off that any additional market selling would take it back to being a $10 stock.

Extreme Networks Inc. (NASDAQ: EXTR) was reiterated as Buy at D.A. Davidson and the price target was raised to $17 from $16 on February 7. This stock slid down to about $10.50 from $15 at the end of January, so it’s a runner-up for the $10 or less category. Extreme Networks has a 52-week trading range of $5.71 to $15.55, and its market cap is $1.2 billion. And it has a consensus price target of $16.70.

As a final reminder, investors should use Wall Street research reports only as a starting point in making any investing decisions. When big upside comes with big risks, it has to be assumed that there is no free lunch for investors and that big losses can follow if the underlying thesis is changed or if the market selling were to accelerate further. Caveat emptor!

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