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.
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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.
Skeptics of low-priced shares should remember that at one point Amazon, Apple and Netflix traded in the single digits. Nvidia, which has exploded higher on AI semiconductor chips, traded under $10 for years. One stock we featured over the years, Zynga, was purchased by Take-Two Interactive. Cogent Biosciences, which we featured last March, has tripled since then.
We screened our 24/7 Wall St. research database looking for smaller cap companies that could offer patient investors some huge returns for 2023 and beyond. While all five of the following 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.
Last September, insurance giant State Farm bought a 15% stake in the company. Analysts noted at the time that the partnership leveraged ADT’s smart home devices, including flood detection, smoke alarm and home intrusion devices, and related monitoring services to allow State Farm to offer lower homeowner insurance premiums to reflect risk mitigation efforts.
Citigroup’s price target of $9 compares with the $9.60 consensus target, and ADT stock closed on Friday at $6.09.
CommScope
This technology play offers some serious upside for aggressive investors. CommScope Holding Co. Inc. (NASDAQ: COMM) provides infrastructure solutions for communications networks worldwide.
The company’s offerings include optical fiber and twisted pair structured cable solutions, intelligent infrastructure software, and network rack and cabinet enclosures under the SYSTIMAX, NetConnect, and Uniprise brands, as well as fiber management systems, patch cords and panels, pre-terminated fiber connectivity, complete cabling systems, and cable assemblies for use in offices and data centers.
It also provides fiber optic connectivity solutions, including hardened connector systems, fiber distribution hubs and management systems, couplers and splitters, plug and play multiport service terminals, hardened optical terminating enclosures, high-density cable assemblies, splices and splice closures that support video, voice and high-speed data services provided by telecommunications operators and multisystem operators.
Credit Suisse has a $13 price target on CommScope stock. The consensus target is $8.31, and the shares closed on Friday at $4.51.
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Dish Network
This satellite provider has always been rumored to be a takeover target. Dish Network Corp. (NASDAQ: DISH) provides pay-TV services in the United States. It offers video services under the Dish TV brand, and its programming packages include programming through national broadcast networks, local broadcast networks, and national and regional cable networks, as well as regional and specialty sports channels, premium movie channels and Latino and international programming packages.
The company also provides access to movies and television shows through TV or Internet-connected devices; and dishanywhere.com and mobile applications on Internet-connected devices to view authorized content, search program listings, and remotely control certain features of their DVRs.
In addition, it offers Sling TV services, including Sling domestic, Sling International, Sling Latino, Sling Orange and Sling Blue services that require an internet connection and are available on streaming-capable devices, such as streaming media devices, TVs, tablets, computers, game consoles and phones. Its markets Sling TV services to consumers who do not subscribe to traditional satellite and cable pay-TV services.
Further, the company provides wireless subscribers consumer plans with no annual service contracts, as well as monthly service plans, including high-speed data and unlimited talk and text. The company offers receiver systems and programming through direct sales channels, as well as independent third parties, such as small retailers, direct marketing groups, local and regional consumer electronics stores, retailers, and telecommunications companies.
Dish Network has a $16 target price at J.P. Morgan. The consensus target is $16.86, and the stock closed at $6.55 on Friday.
24/7 Wall St.Navitas Semiconductor
This company’s breakthrough chip technology makes it a potential takeover candidate. Navitas Semiconductor Corp. (NASDAQ: NVTS) develops ultra-efficient gallium nitride (GaN) semiconductors, transforming the performance of power electronics. The company primarily sells its GaN integrated circuits (ICs) into mobile markets but is developing technology to supply high-growth areas such as automotive, solar and data centers.
The company was founded in 2014. GaN power ICs integrate GaN power with drive, control, sensing and protection to enable faster charging, higher power density and greater energy savings for mobile, consumer, enterprise, eMobility and new energy markets. Over 150 Navitas patents are issued or pending. Over 50 million units have been shipped with zero reported GaN field failures, and Navitas introduced the industry’s first and only 20-year warranty. Navitas is the world’s first semiconductor company to be CarbonNeutral-company certified.
Baird’s target price is $10, and Navitas Semiconductor stock has a $9.63 consensus target. The shares closed at $9.25 on Friday.
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SoundHound AI
This top artificial intelligence (AI) stock could be a huge winner as its technology continues to be added to other platforms. SoundHound AI Inc. (NASDAQ: SOUN) develops an independent voice AI platform that enables businesses across industries to deliver high-quality conversational experiences to their customers.
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