Investing

5 Stocks Priced Under $10 With Massive Implied Upside Potential

Scorpio Tankers

Jefferies analysts have remained positive on this maritime shipping stock. Scorpio Tankers Inc. (NYSE: STNG) provides seaborne transport of refined petroleum products worldwide, such as gasoline, heating oil and fuel oil. Product tankers move refined products from global refineries to points near consuming markets. Its fleet consists of 109 owned product tankers and 17 chartered-in product tankers. It largely operates in the spot shipping markets.

The company recently hosted a very positive investor day in which Emanuele Lauro, the board chair and chief executive officer, said this:

We have seen a significant improvement in the spot market for product tankers during the latter half of the fourth quarter of 2018. While this positive development is beginning to materialize in our fourth quarter figures, we expect to realize the full benefit of these fixtures throughout the remainder of December and into the first quarter of 2019.

The Jefferies team has a Buy rating and a $4 price target. The consensus target is $3.19, and the shares were trading on Friday’s close at $1.89 apiece.

Viking Therapeutics

This small cap biotech could have monster upside potential. Viking Therapeutics Inc. (NASDAQ: VKTX) focuses on the development of therapies for metabolic and endocrine disorders. Its clinical program, VK5211, is an orally available drug candidate, which is in Phase 2 clinical trial for acute rehabilitation following non-elective hip fracture surgery. VK5211 is a non-steroidal selective androgen receptor modulator.

The company’s second program is focused on the development of orally available small molecule thyroid hormone receptor beta agonists. Its two molecules are VK2809 and VK0214. The former is an orally available, tissue and receptor-subtype selective agonist of the thyroid beta receptor that is entering Phase 2 development for the treatment of patients with hypercholesterolemia and fatty liver disease.

B. Riley FBR started coverage of the company this week with a Buy rating and a $16 price target. That compares with the sky-high consensus target of $32.93. The stock closed trading at $8.99 on Friday.

Zynga

This is a very aggressive tech play that could have upside above the Jefferies target. 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.

A $5.25 price target accompanies the Jefferies Buy rating, while the consensus target is $4.74. The stock ended the week at $3.71 per share.

These are five stocks for aggressive accounts that look to get share-count leverage on companies that have sizable upside potential. While not suited for all investors, they are not penny stocks with absolutely no track record or liquidity, and major Wall Street firms have research coverage on them.

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