There are some really good companies out there. The problem: Their stocks have correspondingly high prices. Many trade in the low- to mid-hundreds of dollars per share and some are considerably higher. As a result, individual investors who have modest portfolios are effectively priced out of those stocks.
But here’s some good news for them: 24/7 Wall St. recently scanned its data base, searching for companies that have a lot of upside potential but that nevertheless were trading for less than $10/share. Five companies met their criteria. And because they represent different industries and have different risk/reward ratios, there’s something for almost everybody.
Here’s how 24/7 put it: “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 in the decision-making process, especially when you are on to a winner, as you can always sell half and keep half.
“We screened our 24/7 Wall St. research database and found five stocks trading under the $10 level that could provide investors with some solid upside potential. While more suited for aggressive accounts, they could prove exciting additions to portfolios looking for solid alpha potential.”
The names of these companies, along with a brief description, follow below.
Cidara Therapeutics (Symbol: CDTX)
Cidara may be a small-cap, but 24/7 says this clinical-stage biotech has huge potential. Cidara is developing a pipeline of anti-infective products that potentially could treat or even prevent serious fungal infections. Anti-infective products either stop the spread of an infection or kill it outright.
24/7 Wall St. recently scanned its data base, searching for companies that have a lot of upside potential but that nevertheless were trading for less than $10/share. They found five
Earnings estimates have been rising for this company and Cidara is now ranked #2 by Zacks, which is “Buy.” Citigroup also rates Cidara “Buy” and has a target price of $8 for the stock. However, the consensus view on Wall Street is a much more bullish $13.06. Recent price: $3.89.
Glu Mobile (Symbol: GLUU)
Glu Mobile develops and sells games designed to be used on smartphones and tablets; these include Design Home, Contract Killer, Deer Hunter, and various sports-related games among others. Some analysts think this gaming stock, best suited for aggressive accounts, may have some big upside in its future.
Second-quarter revenues jumped 31 percent over the year before to $90.2 million. Although EPS was slightly lower than analysts’ expectations, the company enjoyed strong bookings growth – strong enough for management to bump estimates of full-year earnings higher. The CEO recently said the company is well positioned to “monetize existing titles while continuing to develop our pipeline of new games,” which it believes will generate significant growth heading into next year.
Piper Jaffray rates Glu Mobile’s stock a “Buy” and has a $7.50 price target, which is above the consensus target of $6.96. Recent price: $5.93.
Kinross Gold (Symbol: KGC)
24/7 notes that “more aggressive” investors interested in precious metal companies may consider Kinross Gold Corp., a smaller-cap Canadian gold miner. Kinross purchases, explores, develops, and produces gold properties and it also mines and sells silver. The company does business in Canada, the US, Russia, Brazil, Chile, Ghana, and Mauritania.
The just-released second-quarter earnings were in line with Zacks Consensus Estimate; in the last four quarters Kinross has surpassed estimates twice. “We remain on track to meet both our annual production and cost guidance,” said company CEO and President J. Paul Rollinson. “We achieved solid cash flow and maintained our strong balance sheet as we continued to advance our development projects.”
As of June 30, 2018, Kinross had cash and cash equivalents of $918.7 million and available credit of nearly $1.6 billion; there are no debt maturities until 2021. Kinross is actively involved in developing new projects, and when those reach full production by 2020 they are expected to stabilize the company’s gold output in the 2.5-million-ounce range.
Merrill Lynch rates the stock a “Buy” and has set a target price of $4.75, slightly below the consensus price target of $4.91. Recent price: $3.45.
Kosmos Energy (Symbol: KOS)
24/7 calls this company “a solid energy exploration and production play.” Kosmos explores and produces oil and gas in several countries in Africa and in South America. The company is also exploring new oil and gas properties, while also trying to boost production from existing fields through additional exploration.
Unlike other companies in the industry, which have scaled back production, Kosmos is hoping to find another field like Jubilee in Ghana, an offshore oilfield that began production in 2010. Jubilee has proven reserves of around 3 billion barrels and produces 150,000 barrels per day.
Jefferies rates Kosmos “Buy” and has a target price of $9.50, higher than the consensus target of $8.98. Kosmos was recently trading at $7.61.
Rigel Pharmaceuticals (Symbol: RIGL)
Jefferies has covered this company for years and believes its low price makes it an attractive takeover target. Rigel Pharmaceuticals Inc. is a biotech researching and developing novel small-molecule drugs that improve the lives of patients with immune and hematological disorders, cancer, and rare diseases.
24/7 notes that “the company’s pioneering research focuses on signaling pathways that are critical to disease mechanisms. Its clinical programs include clinical trials of fostamatinib, an oral spleen tyrosine kinase inhibitor, in a number of indications.”
The Wall St. firm Jefferies has a target price of $7 for Rigel, which is less than the $7.92 consensus target. The shares recently traded at $2.66 apiece.
As always, speak to an investment professional before making any investment.
Gerald Harris is a financial and feature writer. Gerald can be reached at firstname.lastname@example.org