While most of Wall Street focuses on large 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’s pretty hard to get any decent share count leverage.
Many investors, especially more aggressive traders, look at lower-priced stocks as a way to not only 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.
Goldman Sachs is the premier investment bank in the world, so we screened the firm’s outstanding research database and found five stocks trading under the $10 level that could provide investors with some incredible upside potential. While all four are rated Buy at Goldman Sachs, they are much better suited for aggressive investors, and it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
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CommScope
This technology play offers some serious upside for aggressive investors. CommScope Holding Co. Inc. (NASDAQ: COMM) provides infrastructure solutions for communications networks worldwide. Its CommScope Connectivity Solutions segment offers 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.
This segment 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.
Goldman Sachs has a $14 price target on the shares, while the Wall Street consensus target is $15.00. CommScope stock traded mostly between $9 and $10 a share last week.
Glu Mobile
This gaming stock also could have some big upside for aggressive accounts. Glu Mobile Inc. (NASDAQ: GLUU) designs, markets and sells mobile games. It specializes in free-to-play mobile games designed to a section of users who download and make purchases games through direct-to-consumer digital storefronts, such as the Apple App Store, Google Play Store, Amazon Appstore and others.
The company creates games based on its own brands, Blood & Glory, Contract Killer, Cooking Dash, Deer Hunter, Diner Dash, Eternity Warriors, Frontline Commando, Gun Bros, QuizUp and Tap Sports.
Glu Mobile also creates games based on third-party licensed brands, such as “Kim Kardashian: Hollywood,” “MLB Tap Sports Baseball” and “Restaurant Dash with Gordon Ramsay.”
The Goldman Sachs price target of $9.80 is less than the $11.09 consensus target. Glu Mobile stock traded mostly between $7 and $8 a share for the past month.
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Infinera
Some feel that this top company would be an outstanding addition to a networking giant as a takeover candidate. Infinera Corp. (NASDAQ: INFN) provides Intelligent Transport Networks, enabling carriers, cloud operators, governments and enterprises to scale network bandwidth, accelerate service innovation and simplify optical network operations.
Infinera’s portfolio of solutions includes optical transport platforms, converged packet-optical transport platforms, optical line systems, router platforms and a suite of networking and automation software offerings.
Back in the summer, Infinera and Windstream completed a live network trial that successfully achieved 800G single-wavelength transmission over 730 km across Windstream’s long-haul network between San Diego and Phoenix. The results of the trial mark a major milestone in optical networking by demonstrating that ultra-high-speed optical transmissions, such as 700G and 800G, powered by Infinera’s ICE6 optical engine and Windstream’s high-performance fiber network, can be deployed in real-world network applications over significant distances.
The $10 Goldman Sachs price objective compares to the posted consensus target price of $6.88 per share. Infinera stock traded below $7 a share late last week.
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Zynga
This very aggressive gaming play could have upside above the Goldman Sachs target. Zynga Inc. (NASDAQ: ZNGA) is a leading developer of mobile and social games. In the company’s relatively short history, it has developed a broad portfolio of games that includes several on Facebook and several top-grossing mobile apps. Key franchises include FarmVille, Zynga Poker, Hit It Rich Slots and Words With Friends.
Snap announced last year that it was expanding its partnership with Zynga to release new titles on Snap’s gaming platform. The partnership may expand Zynga’s reach to a younger demographic, though the near-term revenue opportunity is likely not impactful to Zynga. Content investment commitment from Zynga an indication of strong engagement and a very solid long-term opportunity.
Goldman Sachs has set its price target for Zynga stock at $11.60. The posted consensus price objective is $10.41, and the shares changed hands around $9.50 apiece for much of last week.
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These four stocks have all been sent to the single-digit 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 Washington, D.C., has provided, the odds are good that each survives this downturn.
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