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.
Goldman Sachs is the premier investment bank in the world, so we screened its outstanding research database and found five more 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.
Alta Mesa Resources
This small-cap energy play doubles as a potential takeout candidate. Alta Mesa Resources Inc. (NYSE: AMR) is an oil and gas exploration company focused on the development and acquisition of unconventional oil and gas reserves in Oklahoma. Its exploration operations are located in the eastern portion of the Anadarko Basin and are referred to as Sooner Trend Anadarko Basin Canadian and Kingfisher County (STACK).
The STACK represents the company’s exploration locations, the Alta Mesa acreage and the Kingfisher Midstream plant. It is a prolific hydrocarbon system with high oil- and liquids-rich natural gas content and has multiple horizontal target horizons.
Goldman Sachs has a massive $6.50 price target on the shares, while the Wall Street consensus target was last seen at $5.88. But the shares were changing hands most recently at $1.53 apiece.
This off-the-radar company could be a little more palatable for accounts with a lower risk tolerance level. CVR Partners L.P. (NYSE: UAN) produces and distributes nitrogen fertilizer products, which are used by farmers to manage the yield and quality of their crops. As of December 31, 2016, the company produced its nitrogen fertilizer products at two manufacturing facilities, located in Coffeyville, Kansas, and East Dubuque, Illinois.
The company’s Coffeyville facility included a 1,300 ton-per-day capacity ammonia unit, a 3,000 ton-per-day capacity urea-ammonium nitrate unit and a gasifier complex having a capacity of 89 million standard cubic feet per day of hydrogen. The gasifier is a dual-train facility, with each gasifier able to function independently of the other. The Coffeyville facility utilizes a petroleum coke, or pet coke, gasification process to produce nitrogen fertilizer.
Goldman Sachs has its price target set at $5.40, and the posted consensus target is $5.45. The stock recently closed at $3.72.