Most firms on Wall Street focus on large and mega-cap stocks, as they provide a degree of safety and liquidity. Unfortunately, many investors are limited in the number of these shares they can buy. Many of the biggest public companies, especially the technology giants, trade in the low to mid hundreds of dollars — all the way up to over $1,000 per share. At those steep prices, it is 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 that SunTrust favors five stocks trading under the $10 level that could provide investors with some solid upside potential. While more suited for aggressive accounts, these plays could prove exciting additions to portfolios in search of solid alpha potential.
This company faces more and more competition, and it is often mentioned as a takeover target. Pandora Media Inc. (NYSE: P) provides internet music streaming services in North America. It allows its listeners to create personalized stations to access free music and comedy catalogs, as well as a personalized playlist generating system.
The company also offers Pandora One, a paid subscription service to listeners. And it sells audio, display and video advertising to advertisers for delivery on computer, mobile and other connected device platforms.
While Pandora is clearly not the only company with a big desire to be in the music streaming business, it is the current leader in installation and use in the automotive world, and it has a decent collaboration deal with Comcast.
SunTrust has an $8.50 price target on the shares, and the Wall Street consensus target price was last seen at $8.83. The stock closed Friday’s trading at $7.94 a share.
Northern Oil and Gas
The SunTrust analysts are very positive on this small-cap energy play. Northern Oil and Gas Inc. (NYSE: NOG) is engaged in the acquisition, exploration, development and production of oil and natural gas properties, primarily in the Bakken and Three Forks formations within the Williston Basin in North Dakota and Montana.
The company holds working interests in over 2,630 gross (204.3 net) producing wells, including over 2,630 wells targeting the Bakken and Three Forks formations and over two wells targeting other formations. Northern Oil and Gas leases approximately 165,910 net acres, all located in the Williston Basin. The company engages in oil exploration and production through non-operated working interests in wells drilled and completed in spacing units that include its acreage.
SunTrust has set its price target at $5, which is essentially the same as the consensus figure of $5.05. The shares closed at $3.23 on Friday.