Investing

Top Analysts Have 5 New Red-Hot Stocks Trading Under $10 to Buy Now

Lee Jackson

Published: October 6, 2018 7:05 am

Last Updated: January 11, 2020 4:49 pm

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 the following five new stocks trading under the $10 level that could provide investors with some solid upside potential. While much they are better suited for aggressive accounts, these stocks could prove exciting additions to portfolios in search of solid alpha potential.

BioLineRx

This micro-cap biotech may be a big winner for ultra-aggressive accounts. BioLineRx Ltd. (NASDAQ: BLRX) is an Israel-based company engaged in the development of therapeutics, from preclinical-stage development to advanced clinical trials, for a range of medical needs. Its clinical therapeutic candidates under development consist of BL-1020 that is in Phase 2/3 clinical trials to improve cognitive function in schizophrenia patients. BL-1040 is under pivotal CE-Mark registration trial for the prevention of cardiac remodeling following an acute myocardial infarction.

The analysts at Oppenheimer are positive on the shares and noted this in a recent research report:

BioLineRx increased its economic stake in BL-8040, reducing future royalty obligations to Biokine from 40% to 20% on any sales arising through sub-licensing agreements. Obligations for independently marketed products remain at 10%. The amendment comes with an upfront cost of $15 million in cash and equity. Our thesis centers on the company independently selling BL-8040 in stem cell mobilization and, therefore, our valuation is not significantly impacted by the amendment. However, if BL-8040 is successfully commercialized in indications through sub-licensing agreements, we believe the improved economics would likely rapidly repay the upfront costs. We believe the revised agreement underscores management’s confidence that BL-8040 could succeed in multiple indications.

The Oppenheimer price target for the shares is $3, which is the same as the Wall Street consensus target price. Shares plunged 7% early Friday but ended the day at $1.41 per share.

Eagle Bulk Shipping

This is a stock to buy for those positive on world economic growth. Eagle Bulk Shipping Inc. (NASDAQ: EGLE) is engaged in the ocean transportation of dry bulk cargoes around the world through the ownership, chartering and operation of dry-bulk vessels. The company owns and operates a fleet of approximately 48 oceangoing vessels, which include Supramax/Ultramax and a Handymax.

The company transports a range of bulk cargoes, including coal, grain, ore, petcoke, cement and fertilizer, along worldwide shipping routes. It offers services, including commercial operations and technical supervision, safety monitoring, vessel acquisition and financial, accounting and information technology services.

B. Riley FBR has a Buy rating and an $8.50 price target on the shares. That compares with a consensus target of $5.71 and the most recent close at $5.66 per share.

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Independence Contract Drilling

This smaller cap company has big upside potential and has been rumored as a buyout candidate. Independence Contract Drilling Inc. (NYSE: ICD) provides land-based contract drilling services for oil and natural gas producers in the United States. The company constructs, owns and operates a fleet of shale drilling rigs to optimize the development of various oil and gas properties in the Permian Basin and the Haynesville shale.

The company’s standardized fleet consisted of 14 shale driller rigs, of which 13 were 200 series rigs equipped with its integrated omni-directional walking system that is specifically designed to optimize pad drilling for its customers. Every shale driller rig in its fleet is a 1500-horsepower, alternating current programmable rig designed to be fast-moving between drilling sites and is equipped with top drives, automated tubular handling systems and blowout preventer handling systems.

The RBC team is very positive on the shares and has a whopping $8 price target. The posted consensus target is $6.73, and the stock traded at $4.92 on Friday’s close.

Ring Energy

SunTrust analysts prefer this small capitalization play now. Ring Energy Inc. (NYSE: REI) is engaged in oil and natural gas acquisition, exploration, development and production activities. Its operations are all oil and gas exploration and production related activities in the United States. Its primary drilling operations target the Central Basin Platform in Andrews County and Gaines County, Texas, and the Delaware Basin in Reeves County and Culberson County, Texas.

Ring Energy primarily sells its oil and natural gas production to end users, marketers and other purchasers. The company’s long-term business strategy is focused on the exploration, development and acquisition of oil and natural gas properties in the Permian and Mid-Continent regions of the United States.

The $14 SunTrust price target is less than the $17.82 consensus figure, but the stock traded at $8.19 a share as the week came to an end.

Zynga

This is a very aggressive tech play that could have upside above the current price targets. Zynga Inc. (NASDAQ: ZNGA) is a leading developer of mobile and social games. In the company’s relatively short history, it has developed a broad portfolio of games that includes several games on Facebook and several top-grossing mobile apps. Key franchises include FarmVille, Zynga Poker, Hit It Rich Slots and Words With Friends.

With live events growing the company’s revenues, cost-cutting should drive margin expansion, which is very positive. The company also pops up in takeover chatter, and the low price makes it even more attractive.

Stifel recently set its rating at Buy with a price target of $5. The consensus target was last seen at $4.85, and the stock closed Friday at $4.02.

These five stocks trading under the $10 level all have big upside to the analysts’ price targets. Again, they not suitable for conservative accounts, but aggressive investors can get some solid share leverage buying 5,000, 10,000 or more shares and can make money on a much smaller share price move.