Whether you are a trader or investor, one of the keys to success is having a meaningful enough position in the stocks you own to take advantage of strong upside price movement. As we have mentioned before, many of the big Wall Street firms do not make a habit of pounding the table on stocks trading for less than $10. They are even more reluctant on stocks trading below $5, as many of those stocks are not marginable.
The good news for our readers is, because of our deep Wall Street coverage, we can scan the firms and come up with some gems that may explode down the road. Just remember, the home builders all traded in single digits after the housing market meltdown five years ago. Many of the top bank stocks also traded to single-digit status when the market imploded in the fall of 2008. The old adage “you can’t judge a book by its cover” can easily apply. Here are more stocks to buy from around Wall Street that are trading at $10 or less.
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Arbor Realty Trust Inc. (ABR) recently increased its cash position with a secondary offering of 6 million shares of stock. The company invests in multifamily and commercial real estate-related bridge loans, junior participating interests in first mortgages, mezzanine loans, preferred and direct equity, discounted mortgage notes and other real estate-related assets, as well as holds investments in mortgage-related securities and real estate property. Arbor Realty Trust is rated as a stock to buy at Deutsche Bank with a $9.50 price target. The Thomson/First Call estimate for the stock is $9.25. Investors are paid a very solid 7.2% divided. The stock closed Friday at $6.88.
BioScrip Inc. (BIOS) provides home infusion, other home care services and pharmacy benefit management (PBM) services in the United States. It operates in three segments: Infusion Services, Home Health Services and PBM Services. Currently six analysts rate BioScrip at Buy, but no analysts rate it at Sell or at Hold. CNBC’s Jim Cramer recently recommended the stock for a trading bounce. Jefferies considers it a stock to buy and has a $13 price target. The consensus target stands at $11, with the high target at $17. BioScrip closed Friday at $8.84.
Cott Corp. (COT) stock has pulled back some 30% from its 52-week high of $11.25 after second-quarter market conditions were presented as "challenging." However, the dividend was reinstated after a ten-year hiatus, and the company bought back $6 million worth of shares in the second quarter. The company mainly does business in the United States, the United Kingdom, Canada and Mexico, but it also sells beverage concentrate to 50 other countries. Deutsche Bank rates Cott as a stock to buy and has an $11 price target. The consensus is posted at $10. Investors are paid a decent 2.9% dividend. The Friday close for Cott was $7.87.
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IntraLinks Holdings Inc. (IL) is a leading global software as a service (SaaS) provider of inter-enterprise content management and collaboration solutions. It recently launched Intralinks DealNexus, the largest global deal marketplace and professional network for qualified mergers and acquisitions (M&A) professionals. Intralinks DealNexus offers a secure and confidential way for dealmakers to find and engage the best buyers or capital partners, and it is used by more than 5,000 private equity firms, corporations, investment banks and advisors to intelligently connect and exchange deal opportunities. Wunderlich rates the company a stock to buy and has a $17 price objective. The consensus target is $12.The stock closed on Friday at $8.61.
Model N Inc. (MODN) develops applications, such as managed care and government pricing, for life science companies and channel incentives based on design wins for technology companies. The company's customers use its application suites to manage mission-critical functions, such as pricing, contracting, incentives and rebates. The company had a recent initial public offering (IPO) that traded as high as $24.80 before badly missing earnings and being taken to the woodshed. Deutsche Bank still rates it as a stock to buy and has a $12 price target. The consensus target is at $15. The stock closed Friday at $9.88.
Novavax Inc. (NVAX) is a top stock to buy at Lazard. This clinical-stage biopharmaceutical company uses recombinant nanoparticle technology to develop vaccines for a wide variety of infectious diseases. The company presently has six vaccine candidates undergoing clinical trials, with a seventh (rabies) being readied for a Phase-1 study later this year. The Lazard price target for this stock is a staggering $11, far and away the highest target on Wall Street. A trade to that level would be almost a 300% gain. The consensus estimate is at $4. The stock closed Friday at $3.17.
Nuverra Environmental Solutions Inc. (NES) may be the low-priced leader in our stocks to buy. The company's Shale Solutions segment provides comprehensive environmental solutions for unconventional oil and gas exploration and production, including the delivery, collection, treatment, recycle and disposal of restricted environmental products used in the development of unconventional oil and natural gas fields in the Marcellus/Utica, Eagle Ford, Bakken, Haynesville, Barnett, Permian, Mississippian Lime, and Tuscaloosa Marine Shale areas. Given the huge growth of fracking for oil and gas, this could be an interesting way to play the sector. The Wunderlich price target for the stock is $5, a high on the street, while the consensus is at $3. A move to the Wunderlich target would be a 100% gain for investors. Nuverra closed Friday at $2.34.
Rite Aid Corp. (RAD) recently blew out its numbers and the stock took off. While the company is back to profitability, it still has a large amount of debt. We recently covered the stock in depth as a possible drug store alternative for institutional investors again. Credit Suisse rates the company as a stock to buy and has a $5 price target. The consensus is posted at $4.50. Rite Aid closed Friday at $4.70, following a successful spot stock offering.
Vernaxis Inc. (APPY) is an in vitro diagnostic company focused on obtaining FDA clearance for and commercializing its CE MarkedAPPY1 Test, a rapid, multiple biomarker-based assay for identifying patients that are at low risk for appendicitis. They have moved ahead with their pivotal trial enrollment, and the analyst at Canaccord Genuity rates the company as a stock to buy. Its price target for the stock is a whopping $7, the high target for the stock. A move to that level would represent a 250% move for shareholders. The consensus target is at $5.25. Vernaxis closed Friday at $1.97.
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Broken IPOs, fallen angels and all sorts of special situations show up in the stocks to buy under $10 list. Again, the nice aspect, whether trading or owning these stocks for the long haul, is that investors can take a substantial position. This can go a long way if one of these stocks has a large upswing. We will continue to scan our Wall Street coverage for more top stocks to buy under $10.