You don’t have to pay three-digit sums to find compelling investing opportunities. It’s time to look outside the box at some cheap stocks top analysts are cheering right now. The best way to find these stocks is to use a screener, that way you can open up your investing horizon to a much wider stock pool.
Here we used TipRanks’ Stock Screener to find these 5 cheap stocks. Essentially, we looked for 1) stocks with a ‘Strong Buy’ analyst consensus; 2) serious upside potential (i.e. over 20%). And on top of this each one of these stocks comes in at under $10. Note that the consensus is based on ratings from the last three months, so the outlook is pretty up to date. Plus we include top analyst analysis to show just why analysts believe these stocks are so undervalued right now.
Let’s take a closer look:
Syndax Pharmaceuticals Inc (SNDX – Research Report)
Syndax Pharmaceuticals, Inc is a clinical-stage biopharma developing therapies for the treatment of cancer.
The company offers significant rewards- but only for investors prepared to shoulder a hefty dose of risk. Shares could surge if the company’s Phase 3 trial of entinostat in metastatic breast cancer is positive. Indeed, Citigroup’s Joel Beatty says that such a catalyst could take shares all the way from $8 to $23. That suggests massive upside potential of 187%. However, the analyst also warns that should the data disappoint, shares could plunge to just $2 (75% downside potential).
Look for the data to come in fall 2019 or spring 2020, says Beatty. In the meantime the analyst keeps a buy rating on shares. Encouragingly, the stock also scores a Strong Buy consensus from the Street. “Entinostat has received Breakthrough Therapy Designation in HR+ HER2- breast cancer patients, and we continue to believe that a positive OS assessment in E2112 could occur this year with a launch in 2021” writes HC Wainwright analyst Edward White.
This five-star analyst has a $16 price target on shares (100% upside potential). That's just below the $19 average analyst price target. See what other Top Analysts are saying about SNDX.
Turtle Beach Corp (HEAR – Research Report)
Turtle Beach Corp is one of the leading gaming headset and audio accessory brand. Disappointing 2Q revenue guidance has weighed on shares recently, but it’s not game over for HEAR just yet.
All five analysts covering the stock rate HEAR a ‘Buy.’ That’s with an average analyst price target of $23- indicating 150% upside potential from current levels. The best-rated analyst covering the stock is Oppenheimer’s Andrew Uerkwitz.
He maintained his buy rating and $24 price target post-results. In a report on May 9 the analyst explained “With healthy fundamentals in video game market and integration of PC gaming accessories business (ROCCAT) well on track, we remain confident in management's ability to stay competitive and return to revenue growth in 2020.”
As for the earnings report, the analyst explains that 2Q revenue guidance is lighter than expected, mostly due to order timing volatility in between quarters. However HEAR did reiterate 2019 revenues of $240-248M. “Over a two year basis, we believe Turtle Beach is outgrowing the competition and keeping its leading market share” he concludes. See what other Top Analysts are saying about HEAR.
Pareteum Corp (TEUM – Research Report)
Pareteum is a rapidly growing global cloud software communications platform. The company offers everything from voicemail and messaging services to data analytics and service fulfilment.
Shares have exploded by 150% year-to-date following first-rate Q1 earnings results, and according to the analyst community plenty of upside lies ahead. This ‘Strong Buy’ stock scores 5 recent buy ratings, alongside an $8 average analyst price target (86% upside potential).
Pareteum just hosted its first analyst day on May 28 in NYC. “We view this event as another sign of the further and rapid maturation of the company” cheers five-star Northland Securities analyst Michael Latimore. He has an $8.50 price target on shares.
According to Latimore, Pareteum has a unique opportunity to be the cloud-based business and operations support system for agile mobile service providers. “TEUM is a top 2019 stock pick…. TEUM remains inexpensive still at only about 4x FY20 revenue v. comps at 10x” writes the analyst. See what other Top Analysts are saying about TEUM.
Plug Power Inc (PLUG – Research Report)
Plug Power develops cutting-edge fuel cells and hydrogen technologies that are more efficient than conventional batteries. Like Paretuem, PLUG has experienced a remarkable rally, with shares doubling year-to-date.
Shares continued to move higher on May 29 following the announcement of an exciting new deal. Plug Power will now deliver hydrogen fuel cell engines to StreeScooter’s electric delivery vehicles. This ties into StreetScooter’s deal to initially deliver 100 hydrogen fuel cell-powered trucks for on-road use to Deutsche Post DHL starting in 2020. According to Plug Power this will provide increased drive time without the need for long charge hours.
“We continue to be bullish on PLUG’s technology leadership position in mobile fuel cell applications and are encouraged by commentary about its expanding opportunity set in material handling and over-the-road applications” writes top-rated Oppenheimer analyst Colin Rusch.
Four analysts have published buy ratings on PLUG in the last three months. Their average price target of $3.56 translates into upside potential of 37%. See what other Top Analysts are saying about PLUG.
ViewRay, Inc. (VRAY – Research Report)
Medical device company ViewRay is on a roll right now. The company just reported strong earnings results, and shares are up 47% year-to-date. Sean Lavin of BTIG praised the company’s current investment strategy, noting strong sales and steady sales progress. Indeed, gross orders came in an impressive $12 million above consensus.
“This is especially important as it shows VRAY is winning new customers despite the recent competitive entrance from Elekta. While sales and orders can be difficult to predict on a quarterly basis, we believe this is an early sign that the new CEO’s strategy is working” wrote Lavin. The analyst concluded “since orders are likely most important to investors, we view this as a stellar report.”
A similarly bullish perspective comes from Cantor Fitzgerald’s Craig Bijou. The analyst left a recent meeting with management "more bullish on the opportunity ahead” for ViewRay. Despite the rally in shares, he still sees ‘significant upside’ potential thanks to increased revenue and margin expansion.
Notably, Bijou argues that management's goal to reduce the time from purchase order to revenue recognition could drive "meaningful upside" to Street numbers in 2020. Overall, five analysts have published buy ratings on VRAY in the last three months with an average price target of $13.40 (50% upside potential). See what other Top Analysts are saying about VRAY.
Find your own ‘Strong Buy’ stocks
Here we covered top stock picks currently trading for under $10. You can discover more compelling 'Strong Buy' stocks with the Top Analyst Stocks tool. This highlights the most promising stocks based on the latest recommendations from the Street's best-performing analysts. Go to Top Analysts Stocks Tool now.