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.
While looking for more home runs, we screened all the companies that Cathie Wood’s ARK funds own, looking for stocks trading under $10 with big-time potential. Although all five of the following stocks are ARK holdings and 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.
Adaptive Biotechnologies
Wood has bought almost 10 million shares of this stock for her ARK Genomic Revolution fund. Adaptive Biotechnologies Corp. (NASDAQ: ADPT) is a commercial-stage company that develops an immune medicine platform for the diagnosis and treatment of various diseases.
The company offers immunoSEQ, a platform and core immunosequencing product that is used to answer translational research questions, as well as to discover new prognostic and diagnostic signals. It also provides clonoSEQ, a clinical diagnostic product for the detection and monitoring of minimal residual disease in patients with multiple myeloma, B cell acute lymphoblastic leukemia and chronic lymphocytic leukemia, as well as available as a CLIA-validated laboratory developed test for patients with other lymphoid cancers.
In addition, Adaptive Biotechnologies offers a pipeline of clinical products and services that are used for the diagnosing, monitoring and treatment of diseases, such as cancer and autoimmune disorders. It offers products and services for life sciences research, clinical diagnostics and drug discovery applications. The company has strategic collaborations with Genentech for the development, manufacture and commercialization of neoantigen directed T cell therapies for the treatment of a range of cancers and with Microsoft to develop diagnostic tests for the early detection of various diseases from a single blood test.
Piper Sandler has a $15 target price on Adaptive Biotechnologies stock. The consensus target is $12.29, and shares closed on Friday at $8.07.
Cerus
This little-known health care company has been battered and offers an incredible entry point, and Wood owns over 20 million shares. Cerus Corp. (NASDAQ: CERS) operates as a biomedical products company that focuses on developing and commercializing the Intercept Blood System, a proprietary technology for controlling biological replication that is designed to reduce blood-borne pathogens in donated blood components intended for transfusion.
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The Intercept Blood System for platelets and plasma is designed to inactivate blood-borne pathogens in platelets and plasma donated for transfusion. The Intercept Blood System for red blood cells inactivates blood-borne pathogens in red blood cells donated for transfusion. And the Intercept Blood System for cryoprecipitation uses its plasma system to produce pathogen-reduced cryoprecipitated fibrinogen complex for the treatment and control of bleeding, including massive hemorrhage associated with fibrinogen deficiency, as well as pathogen reduced plasma, cryoprecipitate reduced.
The company sells platelet and plasma systems through its direct sales force and distributors in the United States, Europe, the Middle East, Latin America and elsewhere.
Cantor Fitzgerald has set a $9 target price, and Cerus stock has a consensus target of $7.63. On Friday, shares closed at $2.95.
Genius Sports
This sports-betting-related stock just signed a big-time partnership with the NFL, and Wood owns over 5 million shares. Genius Sports Ltd. (NYSE: GENI) develops and sells technology-led products and services to the sports, sports betting and sports media industries.
The company offers technology infrastructure for the collection, integration and distribution of live data of sports leagues; streaming solutions, comprising of technology, automatic production and distribution for sports to commercialize video footage of their games; and end-to-end integrity services to sports leagues, such as full-time active monitoring technology, which uses mathematical algorithms to identify and flag suspicious betting activity in global betting markets, as well as full suite of online and offline educational and consultancy services.
Genius Sports also provides live sports data collection; pre-game and in-game odds feeds; risk management services, including customer profiling, monitoring of incoming bets, automated acceptance and rejection of bets, and limit setting; live streaming services; creation, delivery and measurement services for personalized online marketing campaigns; and fan engagement widgets for digital publishers that offer live game statistics and betting-related content.
Citigroup’s price objective of $9 is slightly higher than the $8 consensus target. Genius Sports stock closed at $7.60 on Friday, which was up close to 4% for the day.
Rocket Lab USA
Given the huge move to outer space for infrastructure and more, this stock is poised to benefit in a big way, and Wood owns almost 4 million shares. Rocket Lab USA Inc. (NASDAQ: RKLB) provides launch services and space systems solutions for the space and defense industries.
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The company provides launch services, spacecraft design services, spacecraft components, spacecraft manufacturing and other spacecraft and on-orbit management solutions, as well as constellation management services. It also designs and manufactures small and medium-class rockets.
Rocket Lab designs, manufactures and sells Electron small orbital launch vehicles and the Photon satellite platforms, as well as developing the Neutron 8-ton payload class launch vehicle. It conducts remote launch activities, and it designs and manufactures a range of components and subsystems for the Photon family of spacecraft and broader merchant spacecraft components. The company serves commercial, aerospace prime contractors and government customers.
The Deutsche Bank target price is $10, and the consensus target is $9.33. The shares closed on Friday at $7.10, up 5.5% on the day.
SoFi Technologies
This company took the SPAC route for their IPO and Wood started buying shares this summer. SoFi Technologies Inc. (NASDAQ: SOFI) provides digital financial services that allow its members to borrow, save, spend, invest and protect their money.
The company also offers student loans, personal loans for debt consolidation and home improvement projects and home loans. With student loan payments resuming, this could be an added silo of business for re-financing.
SoFi also provides cash management, investment and other related services. In addition, it operates Galileo, a technology platform that offers services to financial and non-financial institutions, and Apex, a technology-enabled platform that provides investment custody and clearing brokerage services.
SoFi Technologies stock has an $11 price target at Truist Financial. The $8.17 consensus target is less than the $9.55 per-share closing price on Friday, which was up about 5% for the day.
These five stocks that Cathie Wood owns millions of shares of are perfect for aggressive investors who look to get share count leverage on companies that 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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