While most of Wall Street focuses on large-cap 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 hundreds, all the way up to over $1,000 per share or more. At those steep prices, it is difficult 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.
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We screened our 24/7 Wall St. research database looking for smaller cap companies that could very well offer patient investors some huge returns for the rest of 2022 and beyond. Skeptics of low-priced shares should remember that at one point both Amazon and Apple traded in the single digits. One stock we featured over the years, Zynga, recently was purchased by Take-Two Interactive.
While all five stocks are rated Buy, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
ADT
This top security company is a well-known protector of homes and businesses. 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 a million systems per year. Roughly 94% of revenue is generated in the United States, with the remainder from Canada.
Google announced last year that it was buying a 6.6% stake in the home security firm for $450 million in a deal that will allow it to provide service to customers of its Nest home security devices. ADT said that the companies will work to combine Nest products like cameras, thermostats, doorbells and alarm systems with ADT’s installation, service and professional monitoring network. The company expects to expand the integration this year and beyond.
RBC Capital Markets has resumed coverage of ADT stock with a $12 price target. The consensus target is $10.89. The shares closed trading on Friday at $7.57.
Arcos Dorados
This company may be way under the radar, but it has one of the best products imaginable in terms of name recognition. Arcos Dorados Holdings Inc. (NYSE: ARCO) is the world’s largest independent McDonald’s franchisee.
The company has the exclusive right to own, operate and grant franchises of McDonald’s restaurants in 20 countries and territories in Latin America and the Caribbean, including Brazil, Colombia, Costa Rica, Mexico, Puerto Rico, the U.S. Virgin Islands and Venezuela. As of December 31, 2020, it operated or franchised 2,236 restaurants.
Credit Suisse’s $9.50 price target is above the $8.09 consensus target on Arcos Dorados stock. Shares last traded at $8.04 on Friday up almost 7%.
Lantronix
This company is producing solid revenue and is a great idea for aggressive traders. Lantronix Inc. (NASDAQ: LTRX) provides software as a service (SaaS), engineering services, and hardware for edge computing, the Internet of Things (IoT), and remote environment management (REM) in the Americas, Europe, the Middle East, Africa, and the Asia Pacific Japan.
The company’s IoT products include IoT Connectivity, which provides wired and wireless connections that enhance the value and utility of modern electronic systems and equipment through secure network connectivity, application hosting, protocol conversion, secure access for distributed IoT deployments, and various other functions.
Further, its SaaS platform enables customers to deploy, monitor, manage and automate across their global deployments through a single platform login. The company offers its products through value-added resellers, systems integrators, distributors, online retailers and original equipment manufacturers, and it has an e-commerce site for direct sales. Lantronix was founded in 1989 and is headquartered in Irvine, California.
The $13 Canaccord Genuity price objective compares with a $12.69 consensus target. Lantronix stock traded on Friday at $6.58 down over 4%.
Limelight Networks
This stock looks to have bottomed recently, and it could be ready for a sizable move higher. Limelight Networks Inc. (NASDAQ: LLNW) offers services and solutions for businesses to deliver their digital content across the internet, mobile, social and other digital initiatives. It operates edge services platform that provides content delivery services, video content management services, performance services for website and web application acceleration and security, professional services, cloud storage and edge computing services, as well as sells equipment.
Limelight Networks also offers professional services and other infrastructure services, such as transit and rack space services. It serves media companies operating in the television, music, radio, newspaper, magazine, movie, gaming, software and social media industries, as well as enterprises, technology companies and government entities conducting business online.
A recent upgrade of Limelight Networks stock at Northland Capital included the $5 price target hiked to $6.50. The consensus target is $5.50, and the shares last traded at $4.78 on Friday.
Nokia
This telecommunications company ruled the cell phone arena until the advent of the smartphone in 2007 and recently re-emerged as a top meme stock. Nokia Corp. (NYSE: NOK) owns two main businesses: 1) Nokia Networks, a network infrastructure equipment supplier to global wireless and wireline operators, and 2) Technologies, its patent/IPR licensing activities.
In a very positive sign for investors this past week, the company restarted its quarterly dividend and initiated a share buyback program after reporting very solid fourth-quarter results, with comparable operating earnings above market estimates as the telecom equipment maker kept costs in check. Nokia also forecasted annual revenue that was largely ahead of projections and set a long-term target for operating margins of at least 14%, replacing its earlier 2023 target of between 11% and 13%.
Raymond James upgraded Nokia stock recently and has a $6.50 target price. That is lower than the $7.23 consensus target but higher than a last share price of $5.33 seen on Friday.
These are five stocks for aggressive investors looking 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.
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