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 more suited for aggressive accounts, they could prove exciting additions to portfolios looking for solid alpha potential. Plus, after the huge 2018 and early 2019 sell-offs, these five look even better now.
Green Brick Partners
This is one of the top home builders in the Dallas/Ft. Worth metroplex. Green Brick Partners Inc. (NASDAQ: GRBK) engages in residential land development and home building. It offers customization options and builds energy-efficient homes located in the metropolitan areas of Dallas and Atlanta.
The company operates through two segments. The Builder Operations segment consists of Texas, Georgia, Corporate and Other units. The Land Development segment sells finished lots or option lots from third-party developers to their controlled builders for homebuilding operations and provides them with construction financing and strategic planning.
The largest Green Brick Partners shareholder is Greenlight Capital’s David Einhorn.
Deutsche Bank just started the stock with a Buy rating and an $11 price target. The Wall Street consensus target is $8.63, and the shares were trading at $8.65 on Friday’s close.
This stock has been on a roll so far this year and looks poised to go higher. Sirius XM Holdings Inc. (NASDAQ: SIRI) is the world’s largest radio company, measured by revenue, and has approximately 33.1 million subscribers.
Sirius creates and offers commercial-free music; premier sports talk and live events; comedy; news; exclusive talk and entertainment; and a wide range of Latin music, sports and talk programming. Sirius is available in vehicles from every major car company and on smartphones and other connected devices as well as online.
Late in December, Sirius announced that a definitive proxy statement/prospectus has been filed with the Securities and Exchange Commission in connection with its pending merger with Pandora Media. Pandora’s special meeting of stockholders to vote on the transaction is scheduled to be held on January 29, 2019. Stockholders of record as of the close of business on November 30, 2018, will be entitled to vote at the special meeting in person or by proxy.
Merrill Lynch has an $8 target price, which compares to the consensus estimate of $6.89. The stock closed on Friday at $5.82.
This company has bombarded the airwaves with television advertising over the past few years, and it is a solid play now. Trivago N.V. (NASDAQ: TRVG) operates as a hotel search platform and offers online meta-search for hotels by facilitating consumers’ search for hotel accommodation through online travel agents, hotel chains and independent hotels. The company provides access to its platform through 55 localized websites and apps in 33 languages.
The Trivago hotel search platform offered access to approximately 1.8 million hotels and other types of accommodation worldwide. Some on Wall Street feel that the company could be a solid takeover target and a good bolt-on acquisition for a bigger player.
The Mizuho Buy rating comes with a $6.30 price target. The consensus target is lower at $5.83, and the stock closed on Friday at $5.98.
Since the recent IPO, this stock has been hammered and offers investors an incredible entry point. Uxin Ltd. (NASDAQ: UXIN), through its subsidiaries, operates a used car e-commerce platform in China. Its Uxin Used Car app provides consumers with customized car recommendation, financing, title transfer, delivery, insurance referral, warranty and other related services. Uxin Auction is an app that helps business buyers to source vehicles through online auctions.
The company also facilitates used car transaction services and financing solutions offered by third-party financing partners to buyers for their used car purchases. Uxin announced on Jan. 14 that its key cross-regional transaction service volume exceeded 10,000 units this past December. The 2018 figures were more than 75 times higher than those from the same period in 2017.
JPMorgan rates the stock at Overweight with a $7 price target. That is way below the consensus target of a stunning $11.58. The shares ended the week at $3.42.
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 that 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 and is entering Phase 2 development for the treatment of patients with hypercholesterolemia and fatty liver disease.
B. Riley FBR has a Buy rating and a $16 price target on the shares. The consensus target is a sky-high $29.79. The stock was last seen trading at $8.26.
Five stocks for aggressive accounts that look to get shares count leverage on companies that have sizable upside potential. While not suited for all investors, these are not penny stocks with absolutely no track record or liquidity, and major Wall Street firms have research coverage on them.