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. Often 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.
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Every week, we screen our 24/7 Wall St. research database looking for stocks with Buy equivalent ratings at major firms and priced under the $10 level (last week’s picks included Callon Petroleum, QEP Resources), and this week was no exception. We found five new stocks that could provide investors with some solid upside potential. While more suited for aggressive accounts, they could prove to be exciting additions to portfolios looking for solid alpha potential.
BGC Partners
Shares of this off-the-radar company hold big upside potential for aggressive accounts. BGC Partners Inc. (NASDAQ: BGCP) operates as a global financial intermediary to the financial and real estate markets. Its Financial Services segment provides brokerage of a broad range of products, including fixed income securities, interest rate swaps, foreign exchange, equities, equity derivatives, credit derivatives, commodities, futures and structured products.
The Real Estate Services segment offers commercial real estate tenants, owners, investors and developers a wide range of services, including leasing and corporate advisory, investment sales and financial services, consulting, project management, and property and facilities management.
Shareholders receive a massive 10.39% dividend. The Raymond James price target for the shares is $9, and the consensus price target on Wall Street is $8.50. The shares traded on Friday at $5.45.
Encana
This top stock has pulled back sharply and is offering an outstanding entry point. Encana Corp. (NYSE: ECA) is an energy producer focused on developing its multibasin portfolio of natural gas, oil and natural gas liquids (NGLs) producing plays. Its operations also include the marketing of natural gas, oil and NGLs. All of its reserves and production are located in North America.
Its Canadian Operations segment includes the exploration for and development and production of natural gas oil and NGLs and other related activities within Canada. This includes Montney in northeast British Columbia and northwest Alberta and Duvernay in west-central Alberta. The USA Operations segment includes the exploration for and development and production of natural gas, oil and NGLs and other related activities within the United States.
The Merrill Lynch analysts remain positive on the company with a price target of $8. The posted consensus target is $7.08, and the stock traded at $4.40 per share on Friday.
Helix Energy Solutions
This oil industry services stock holds solid value as the sector is out of favor now. Helix Energy Solutions Group Inc. (NYSE: HLX) is an international offshore energy company that focuses on subsea construction, maintenance and salvage services to the offshore natural gas and oil industry.
The firm also provides specialty services to the offshore energy industry, with a focus on well intervention and robotics operations. The company operates through three segments: Well Intervention, Robotics and Production Facilities.
Raymond James has set an $11 price target on the stock, while the consensus was last seen at $10.29. Shares were changing hands at $8.40 on Friday.
Iamgold
This is a small-cap gold-mining stock for aggressive accounts looking for exposure to the sector. Iamgold Corp. (NYSE: IAG) is a Canadian-domiciled company that is focused on ramping up its underground Westwood mine in Canada, as well as improving performance at its Rosebel mine in Suriname. The company’s Essakane mine in Burkina Faso is performing well.
The company reported earnings results that came in below the consensus forecast. Taxes and other expenses were higher, but Iamgold did maintain its 2019 operating guidance, despite events at Rosebel. In addition, management expects the fourth quarter to be a strong production quarter. With the stock trading at a 30% discount to the peer group based on price to net asset value analysis, achieving potential catalysts could shrink this discount.
The $4.20 Merrill Lynch price target compares with a much higher consensus target of $7.65. The shares were trading at $3.60 apiece.
Nine Energy Services
This is another smaller cap play for investors looking for oilfield services exposure. Nine Energy Services Inc. (NYSE: NINE) is an up-and-coming provider of onshore completion and production services that target unconventional oil and gas resource development. Its services include cementing, completion tools, coiled tubing, wireline and well servicing rigs. It operates in the United States and Canada, with a presence in many of the major shale basins. Revenues in 2018 were $827 million.
The company reported third-quarter adjusted EBITDA of $24 million, arriving at the low-end of management’s guidance range but 5% above consensus of $23.2 million. The beat was driven entirely by lower SG&A expenses, when excluding the restructuring and transaction costs. However, free cash flow was strong in the quarter, which should be positive for the stock.
Raymond James has an $11 price target. The consensus target is lower at $8.47, and the stock was trading at $5.50 a share.
These five stocks for aggressive accounts looking to get share count leverage on stocks 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.
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