While Most of Wall Street focuses on large cap and mega-cap stocks, as they provide a degree of safety and liquidity, many investors are limited in the number of shares they can buy as many of the biggest companies, especially the technology giants, trade in the low to mid hundreds all the way up to over $1,000 per share. At those steep prices, it’s pretty hard to get any decent share count leverage.
Many investors, especially more aggressive traders, look at lower priced stocks as a way to not only make some good money but to get a higher share count. That can really help the decision-making process, especially when you are on to a winner, as you can always sell half and keep half.
We screened our 24/7 Wall St. research database and found five stocks trading under the $10 level that could provide investors with some solid upside potential. While more suited for aggressive accounts, they could prove exciting additions to portfolios looking for solid alpha potential.
Kinross Gold
More aggressive investors may want to consider this smaller cap company. Kinross Gold Corp. (NYSE: KGC) engages in the acquisition, exploration, development and production of gold properties. The company’s gold production and exploration activities are carried out principally in Canada, the United States, the Russian Federation, Brazil, Chile, Ghana and Mauritania. It also produces and sells silver.
Kinross announced last year that it will proceed with the Tasiast Phase Two and Round Mountain Project W projects. At full production by 2020, CEO Paul Rollinson sees these two projects stabilizing the company’s gold equivalent output in the 2.5 million ounce range. Trading at a discount to the peer producers, some believe that this valuation gap could be closed due to these projects.
The RBC analysts rate the stock a Buy and have a $5.50 price objective on the shares. The Wall Street consensus target was last seen at $5.32. The shares closed Friday’s trading at $4.03.
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Nabors Industries
This company provides drilling and rig services, and some feel it could be a takeover target. Nabors Industries Ltd (NYSE: NBR) owns and operates the largest land-based drilling rig fleet in the world, and it is a leading provider of offshore platform workover and drilling rigs in the United States and select international markets. Revenues in 2016 were $2.23 billion.
Nabors markets approximately 400 rigs for land-based drilling operations in the United States, Canada and approximately 20 other countries worldwide, and 41 rigs for offshore drilling operations in the United States and internationally.
While the stock has rallied off the lows, Nabors is still down over 50% from highest levels posted a year ago. This concern has been exacerbated recently by a softer-than-expected third-quarter earnings report and focus on 2018 non–cash deferred revenues. While most don’t see a quick fix for the company, the worst surely looks to be over.
Investors in Nabors are paid a 3.07% dividend, though it could be lowered going forward. The Merrill Lynch analysts have a Buy rating and their price target is $10. That compares with a consensus price objective of $9.30 and the most recent close at $7.54 per share.
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Rigel Pharmaceuticals
The Jefferies team has a Buy rating here and has covered this stock for years. Rigel Pharmaceuticals Inc. (NASDAQ: RIGL) is engaged in the discovering, developing and providing novel small molecule drugs that improve the lives of patients with immune and hematological disorders, cancer and rare diseases.
The company’s pioneering research focuses on signaling pathways that are critical to disease mechanisms. Its clinical programs include clinical trials of fostamatinib, an oral spleen tyrosine kinase inhibitor, in a number of indications. The analysts also think this company is a potential takeover target, as it would be a reasonable pipeline addition for a bigger biotech.
The $10 Jefferies price target is well above the $6 consensus target. The stock closed trading most recently at $3.87 per share.
Viking Therapeutics
This small cap biotech could have monster upside potential. Viking Therapeutics Inc. (NASDAQ: VKTX) focuses on the development of therapies for metabolic and endocrine disorders. Its clinical program, VK5211, is an orally available drug candidate, which is in Phase 2 clinical trial for acute rehabilitation following non-elective hip fracture surgery. VK5211 is a non-steroidal selective androgen receptor modulator.
The company’s second program is focused on the development of orally available small molecule thyroid hormone receptor beta agonists. Its two molecules are VK2809 and VK0214. VK2809 is an orally available, tissue and receptor-subtype selective agonist of the thyroid beta receptor that is entering Phase 2 development for the treatment of patients with hypercholesterolemia and fatty liver disease.
The Buy rating at H.C. Wainwright comes with a price target of $11 per share. The posted consensus target is $9.13, and the stock ended last week at $4.22 a share.
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Weatherford
This stock has been absolutely demolished from its 2014 highs, but it may be offering aggressive investors big upside potential. Weatherford International Ltd. (NYSE: WFT) is one of the largest multinational oilfield service companies, providing innovative solutions, technology and services to the oil and gas industry. It operates in over 100 countries and has a network of approximately 1,200 locations, including manufacturing, service, research and development, and training facilities and employs approximately 37,000 people.
The company offers customers a wide range of global capabilities, including a proprietary system for pressure management in the mushrooming arena of subsea production. The changes in government oil policy in Mexico in 2014 may provide some favorable tailwinds for the company, despite the huge downturn in oil pricing.
RBC rates the stock a Buy and has a price target of $5. The posted consensus target is $4.40, and the shares closed trading on Friday at $2.97 apiece.
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These five stocks are for aggressive accounts looking to get share-count leverage on companies that have sizable upside potential. While not suited for all investors, they are not penny stocks with absolutely no track record or liquidity, and major Wall Street firms have research coverage on them.
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