Explosive Stocks Under $10


This screen is a bit of a departure from my normal stock screens.

Usually I require my screens to have a minimum price of $10 per share.

But I do at times scan for stocks under $10. And that's one of the screens I'm running for myself right now.

Penny Stocks

One dollar is a common threshold when screening for stocks. A lot of investors actively avoid penny stocks due to the speculative nature, the often wide bid/ask spreads, and the excessive volatility that is all too common in stocks under $1.00.

But some, of course, work out spectacularly. And that's probably what keeps people interested in them.

Seeing a stock make a 100% return or 200% return or more from a base of 50 cents, for example, seems easier than investing in a $50 stock or $100 stock and seeing that double or triple.

$5 Stocks

Five dollars is another common minimum when screening for stocks since many institutional investors won't even consider a stock if it's trading under $5. And since institutional investors are usually the ones that can move a stock; having stocks that are open to them is oftentimes a bonus.

And quite frankly, lots of cheap stocks are cheap for a reason, i.e., that's all they're worth.

But being over $5 does put them into a different category of consideration. Maybe not the best category, but a step up from stocks less than a dollar.

Stocks Under $10

My minimum has typically been $10. With over 10,000 stocks out there, this minimum quickly let's me cull down several thousand stocks with a click of a button.

That doesn't mean there aren't any good stocks below that price point, because there are.

But, when screening for ideal stock candidates (and for me, a price under $10 is typically less than ideal), a $10 minimum does the trick.

But I can recall several sub-$10 stocks in the past that worked out exceptionally well. Maybe it's because I use them sparingly. Or maybe it's because I'm ultra picky in selecting them.

Either way, there can be a place for cheaper stocks in your portfolio sometimes.

And that's what we're looking at today.

Screen Parameters

  • Price less than or equal to $10

  • Average Dollar Volume greater than or equal to $1,000,000
    (Price x volume shows you how much money is trading in and out of the stock on a daily basis.)

  • Weekly Volume greater than Previous Week's Volume (any two out of three weeks)
    (Want to see increasing volume to show greater investor interest and demand.)

  • Zacks Rank less than or equal to 3
    (No Sells or Strong Sells.)

  • Average Broker Rating less than or equal to 3.5
    (Average Broker Rating of a Hold or Better.)

  • # of Analysts in Rating greater than or equal to 2
    (Minimum of at least two analysts covering the stock.)

  • % Change F1 Earnings Estimate Revisions -- 12 Weeks greater than or equal to 0
    (Preferably upward earnings estimate revisions, but definitely no downward revisions.)


Here are 5 stocks that made it through this week's screen:

AIS Antares Pharma, Inc.
GCA Global Cash Access Holdings, Inc.
INWK InnerWorkings, Inc.
RPTP Raptor Pharmaceuticals Corp.
TASR TASER International, Inc.

I think each one of these picks has big potential. And the entire list is worth a thorough analysis.

I would not suggest filling up an entire portfolio of stocks under $10 though. But adding a careful selection of some of the best cheap stock names could add some excess returns to your bottom line, not to mention a little excitement to your stock picking process as well.

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

Disclosure: Performance information for Zacks' portfolios and strategies are available at: http://www.zacks.com/performance.

RAPTOR PHARMACT (RPTP): Free Stock Analysis Report

GLOBAL CASH ACS (GCA): Free Stock Analysis Report

INNERWORKINGS (INWK): Free Stock Analysis Report

ANTARES PHARMA (AIS): Free Stock Analysis Report

TASER INTL INC (TASR): Free Stock Analysis Report

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