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.
Archer Aviation
This company recently signed a potentially huge deal with the Air Force for air taxis. Archer Aviation Inc. (NYSE: ACHR) is an urban air mobility company that designs, develops, manufactures and operates electric vertical takeoff and landing (eVTOL) aircraft to carry passengers.
Archer Aviation is a leader in eVTOL aircraft, and it announced earlier this week that it has significantly expanded its partnership with the U.S. Department of Defense by signing new contracts with the U.S. Air Force with a total value of up to $142 million.
The new contracts signal the U.S. military’s recognition of the transformative potential that Archer’s innovative eVTOL aircraft brings to the country’s armed forces. This new execution phase of the partnership includes the delivery of up to six of Archer’s Midnight aircraft to the Air Force, the sharing of additional flight test data and certification-related test reports, pilot training and the development of maintenance and repair operations.
Canaccord Genuity started coverage earlier this summer. Its $9 target price is a bit less than the $9.25 consensus target. The stock closed on Friday at $5.60.
Codexis
This is a micro-cap biotech that could be poised to explode higher. Codexis Inc. (NASDAQ: CDXS) discovers, develops and sells enzymes and other proteins. The company operates through two segments, Performance Enzymes and Novel Biotherapeutics.
Codexis offers biocatalyst products and services, and Codex biocatalyst panels and kits enable customers to perform chemistry screening. The company also provides biocatalyst screening and protein engineering services. In addition, it offers CodeEvolver protein engineering technology platform, which helps in developing and delivering biocatalysts that perform chemical transformations and enhance the efficiency and productivity of manufacturing processes.
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The company’s platform is also used to discover novel biotherapeutic drug candidates for targeted human diseases, as well as for molecular biology and in vitro diagnostic enzymes. It has a collaboration agreement with Nestlé Health Science to develop CDX-7108 for the treatment of exocrine pancreatic insufficiency. The company sells its products to pharmaceutical manufacturers through its direct sales and business development force in the United States and Europe.
Piper Sandler has a $14 target price on Codexis stock. The consensus target is $10.93, and shares closed at $2.89 on Friday.
Ginkgo Bioworks
This microcap biotech has strong upside potential for investors looking for ideas in the space. Ginkgo Bioworks Holdings Inc. (NYSE: DNA) develops a platform for cell programming.
The company’s platform is used to program cells to enable biological production of products, such as novel therapeutics, food ingredients and chemicals derived from petroleum. The company serves various end markets, including specialty chemicals, agriculture, food, consumer products and pharmaceuticals.
Earlier this year Ginkgo Bioworks announced a partnership with Boehringer Ingelheim. The two companies will leverage Ginkgo’s natural product discovery capabilities to accelerate the discovery and development of novel therapeutic molecules to address diseases with high unmet patient needs that are out of reach of conventional drug discovery.
Raymond James has set a $5 target price, and Ginkgo Bioworks stock has a consensus target of $4.24. On Friday, the closing share price was $2.04.
24/7 Wall St.908 Devices
This is another Cathie Wood portfolio stock that also has the potential to be a huge winner. 908 Devices Inc. (NASDAQ: MASS) provides various purpose-built handheld and desktop mass spectrometry (Mass Spec) devices to interrogate unknown and invisible materials in life sciences research, bioprocessing, industrial biotech, forensics and adjacent markets. It operates in the Americas, Europe, the Asia Pacific and elsewhere.
908 Devices products include:
- MX908, a handheld, battery-powered and Mass Spec device that is designed for rapid analysis of gas, liquid and solid materials of unknown identity
- Rebel, a small desktop analyzer that provides real-time information on the extracellular environment in bioprocesses
- Maven and Trace C2, an online device for bioprocess monitoring and control
- ZipChip solution, a plug-and-play, high-resolution separation platform that optimizes Mass Spec sample analysis
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The $20 SVB Leerink target price compares with a lower $17 consensus estimate. 908 Devices stock closed at $6.23 on Friday.
2U
Investors are likely familiar with this top company. 2U Inc. (NASDAQ: TWOU) operates as an online education platform company in the United States and internationally. The company operates through the following two segments.
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