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BofA Securities Has 5 Stocks to Buy Under $10 With Massive Upside Potential

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It happened in 2008 and 2009, and despite a huge rally off the bottom, many of the top companies that investors are very familiar with have taken a beating. Needless to say, the ones that have been beaten down the most are in sectors that are struggling the most with the temporary new normal routines. While conditions are improving as the country opens up, some sectors continue to fare better than others

We screened the BofA Securities research database looking for companies that are likely to survive the current troubles and could very well offer patient investors some huge returns over the next year or so. Patient investors that did that in 2008 and 2009 absolutely killed it over the next few years.

While all five stocks are rated Buy at BofA Securities, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

B2Gold

Aggressive investors looking for sector exposure may be interested in this small-cap gold stock. B2Gold Corp. (NYSE: BTG) is a global, growth-oriented mid-tier gold producer with primary assets that include gold mines located in Nicaragua (La Libertad and El Limon), the Philippines (Masbate), Namibia (Otjikoto) and Mali (Fekola).

The company recently announced positive drill results from the Mamba zone, which is located within the Anaconda area approximately 20 kilometers from the Fekola Mine, as well as positive infill drill results from the Fekola mineral resource area and step out results north of the Fekola resource.

The company posted strong first-quarter results and the analysts said this:

B2Gold delivered a strong first quarter earnings result and ended the quarter with net debt of just $17 million, down 86% from year-end 2019. The quarterly dividend was doubled to $0.02 per share, good for an annualized yield of 1.5%; substantial 2020 cash flow is expected. Due to core mine outperformance, 2020 guidance was reiterated despite that the Nicaraguan assets could remain suspended.

The BofA Securities price target for the shares is $6.40, and no consensus target was available. B2Gold stock ended trading on Friday at $5.13.

BioCryst Pharmaceuticals

This company hits screens as a potential takeout target. BioCryst Pharmaceuticals Inc. (NASDAQ: BCRX) designs, optimizes and develops novel small molecule drugs that block key enzymes involved in rare diseases. The company currently has one approved product: Rapivab (flu) and two pipeline products.

BCX7353 is an oral treatment for hereditary angioedema. BCX9930 is an oral Factor D inhibitor for the treatment of complement-mediated diseases. Galidesivir, the broad-spectrum antiviral drug, is a potential treatment for Marburg virus disease and yellow fever, and there is a preclinical program to develop oral ALK-2 inhibitors for the treatment of fibrodysplasia ossificans progressiva.

BioCryst had a huge announcement this week when it said that galidesivir was safe and well-tolerated in previously reported Phase 1 trials in healthy subjects. Galidesivir has demonstrated broad-spectrum activity in vitro against more than 20 RNA viruses in nine different families, including the coronaviruses that cause MERS and SARS.

BofA Securities has a $6 price objective, which is well below the consensus target of $13.29. BioCryst stock traded on Friday’s close at $4.29.

DouYu International

This off-the-radar stock could be a huge play for super-aggressive accounts. DouYu International Holdings Ltd. (NASDAQ: DOYU) operates a platform on personal computers and mobile apps that provides interactive games and entertainment live streaming in China. Its platform connects game developers and publishers, professional e-sports teams or players and e-sports tournament organizers, advertisers and viewers.


DouYu also sponsors e-sports teams and organizes e-sports tournaments. In addition, it streams other content to include a spectrum of live streaming entertainment options, such as talent shows, music and outdoor and travel shows. Further, the company records and offers video clips to allow users to watch replays of selective live streaming content, and it allows viewers and streamers to edit and upload short video clips themselves.

In May, the company said that net income in the first quarter surged year over year to 254.5 million yuan ($35.9 million). Total net revenue surged 53.0% to 2.28 billion yuan, largely due to the significant increases in live-streaming and advertising revenues while people in China were on home quarantines because of the coronavirus outbreak.

According to the company, average paying users in the three months to March rose 26.2% to 7.6 million, while average mobile active monthly users grew 15.3% to 56.6 million. For the second quarter, Tencent-backed DouYu estimates total net revenues would increase between 26.0% and 28.7%.

The $12 BofA Securities price target is higher than the $10.91 consensus target. Shares were changing hands on Friday’s close at $8.98.

Ford

This remains a solid value play now, and demand could jump when the coronavirus issues have passed. Ford Motor Co. (NYSE: F) is one of the world’s largest vehicle producers, with over 6 million units manufactured and sold globally. The company has made significant progress executing on its One Ford plan and delivering best-in-class vehicles.

Ford is among the car brands with the most loyal customers, and it remains committed to positioning itself well within the evolving auto industry through balanced investments across electrification, autonomy and mobility services.

Ford recently sold $8 billion of unsecured bonds in three parts. The longest maturity, a 10-year security, will yield 9.625%, after initially being marketed around 11%, according to a person with knowledge of the matter. It is the company’s first debt offering since losing its investment-grade ratings on March 25, becoming the largest fallen angel of the current downgrade cycle.

BofA Securities has a $7 price target on the venerable car company. The posted consensus target is $6.41, and Ford stock closed trading at $6.46 on Friday.

General Electric

If any stock has taken a beating over the past three years, it has been this legendary corporation. General Electric Co. (NYSE: GE) businesses are organized broadly under seven segments: Power, Renewable Energy, Energy Connections, Oil & Gas, Aviation, Healthcare, Transportation and GE Capital. The company’s products and services include power generation equipment, aircraft engines, locomotives, medical equipment, compressors and others. Over half of the business is tied to service and aftermarket support.

In 2018, the venerable American industrial giant got the ultimate humiliation of being removed from the Dow Jones industrial average after a stay of over 100 years. General Electric is still one of the most valuable brands in the world.

The massive restructuring and debt reduction plans that have been announced come after years of acquisitions and changes in the core business at GE, and in some cases what many on Wall Street thought were ill-advised moves by the former CEO Jeff Immelt. The company’s once dependable dividend has been chopped to $0.04 a share and may be eliminated altogether at some point.

Holders of GE stock receive a 0.65% dividend. BofA Securities has set an $11 price target. The $8.86 consensus target is closer to the most recent share price of $7.25.

These five stocks have all been sent to the single-digit midget penalty box. Some of these companies may have a difficult road back to prosperity, but given what we have seen in the past, and the massive liquidity being provided by Washington, D.C., the odds are good that each survives this downturn.

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