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.
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.
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.