While Most of Wall Street focuses on large 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. Many of the biggest public 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 much better suited for aggressive accounts, they could prove exciting additions to portfolios looking for solid alpha potential.
This may be a solid play for energy investors looking for Permian Basin exposure. Abraxas Petroleum Corp. (NASDAQ: AXAS) is engaged in the acquisition, exploration, development and production of oil and gas. As of December 31, 2017, its estimated net proved reserves were 65.4 million barrels of oil equivalent.
The company’s oil and gas assets are located in three operating regions: the Rocky Mountain, Permian Basin and onshore Gulf Coast. The Abraxas properties in the Rocky Mountain region are located in the Williston Basin of North Dakota and Montana, as well as the Green River Powder River and Unita Basins of Wyoming and Utah.
The analysts at Stifel like the company and said this in a recent research report:
Abraxas has also previously indicated that it was looking to further streamline its assets with the sale of its Eagle Ford properties. Management could potentially announce an update on the divestiture process before the third quarter release. Most investors seemed to believe the stock, which is down 17% quarter to date (vs. +7% for the S&P 500), is undervalued in light of the company’s drilling inventory depth and solid financial position.
The Stifel price target for the stock is whopping $4.50, while the Wall Street consensus price target is $3.73. The shares were trading on Friday at $2.40 apiece.
This low-priced biotech stock has big upside potential. KemPharm Inc. (NASDAQ: KMPH) is engaged in the discovery and development of proprietary prodrugs. The company uses its Ligand Activated Therapy platform technology to create prodrugs, and its product candidate KP201/APAP consists of KP201, its prodrug of hydrocodone, which is combined with acetaminophen (APAP).
The company is developing KP201/APAP as an immediate release, a product candidate for the short-term, or no longer than 14 days for the management of acute pain. The company has designed KP201/APAP with abuse-deterrent properties to address the epidemic of opioid abuse in the United States.
Oppenheimer rates the shares Outperform with a giant $11 price target. The consensus target is $11.33, and the stock was trading on Friday at $4.55 per share.