Investing

Goldman Sachs Has 5 Stocks Under $10 To Buy With Massive Upside Potential

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While Most of Wall Street focuses on large- and mega-cap stocks because 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 not only to 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 one of the premier investment banks in the world, so we screened the firm’s outstanding research database and found five stocks rated Buy at the firm trading under $10 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.

ADT

This top security company is a well-known protector of home and business. ADT Inc. (NYSE: ADT) is the largest residential and second-largest commercial security monitoring company in North America. The company serves over 7 million customers, installing over 1 million systems per year. Roughly 94% of revenue is generated in the US, with the remainder from Canada.

The company reported good first quarter results, with revenue and adjusted EBITDA both slightly ahead of estimates, and solid free-cash-flow. 2019 guidance was maintained and calls for 0-2% year-over-year adjusted EBITDA growth amid investments in do-it-yourself, branding, and commercial.

Goldman Sachs has a giant $12 price target, while the consensus across Wall Street is posted lower at $9.75. The shares were last seen Friday at $6.24.

Antero Resources

This company has big potential for investors, and because the share price got hit hard recently, the stock now offers a nice entry point. Antero Resources Corporation (NYSE: AR) is engaged in the exploration, development and acquisition of natural gas, natural gas liquids (NGLs) and oil properties located in the Appalachian Basin. The company’s segments include the exploration, development and production of natural gas, NGLs and oil; gathering and processing; water handling and treatment, and marketing of excess firm transportation capacity.

The company’s subsidiary, Antero Midstream Corporation (NYSE: AM) is a master limited partnership, which owns, operates and develops midstream energy infrastructure primarily to service its production and completion activity. Its exploration and development activities are supported by the natural gas gathering and compression assets.

The combination of the two makes this a solid pick for investors. Goldman Sachs has a towering $10.55 price target which compares to the higher Wall Street consensus price target of $12.25. The shares were trading Friday at $5.55.

Evolent Health

This micro-cap company is an interesting way to play the expanding healthcare arena. Evolent Health Inc. (NYSE: EVH) engages in the provision of healthcare delivery and payment services. Its solutions include population health management, health plan administration and third party administration, network performance management, risk adjustment, pharmacy benefit management, analytics and performance improvement, and technology and electronic medical record integration.

The firm operates through a Services segment and a True Health segment. The Services segment includes three types of services designed to help partners manage patient health: value-based care services, specialty care management services, and comprehensive health plan administration services.

The True Health segment, which operates a health plan in New Mexico, and provides reinsurance to New Mexico Health Connections, takes on certain insurance and underwriting costs in pricing its premiums.

Goldman Sachs has a massive $14 price target, and that’s modest compared to the gigantic consensus of $20.12. The stock was last seen Friday at $8.01.

Kosmos Energy

This stock is a solid energy exploration and production play. Kosmos Energy Ltd. (NYSE: KOS) is a conventional oil and gas E&P company focused on the Atlantic Margins. The company focuses on unlocking new hydrocarbon systems and growing and maturing discovered basins through follow-on exploration success, development and production.

Although many companies in the sector have scaled back exploration, Kosmos believes this is the best route to generating value, seeking to replicate its discovery and development of the Jubilee field in Ghana.

Goldman Sachs has an $8 price objective for the company, while the Wall Street consensus is posted at $9.59. The shares closed trading on Friday at $6.28.

Vivint Solar

This is a green energy play aggressive accounts may want to study. Vivint Solar Inc (NYSE: VSLR) finances, installs, and services solar power systems on customer premises. The majority of the company’s installations are leased from Vivint by its customers.

The company posted solid first quarter results and is seeing stronger growth in key California and Northeast markets in particular due to its dynamic pricing model introduced last year.

Vivint also showed continued volume growth of 13% in the first quarter, trending broadly towards 15% for the fiscal year, and the inflection towards steady growth continues.

Goldman Sachs has put a $9 price target on the shares, and that compares with the Wall Street consensus target of $8.10. The company was trading on Friday at $7.26.

Five stocks trading under the $10 level, that have big upside to the analysts price targets. Again, while not suitable for conservative accounts, aggressive investors can get some solid share leverage buying 5000, 10,000 or more shares and can make money on a much smaller share price move. Plus they are all covered with a Buy rating at the top firm on Wall Street, Goldman Sachs.

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