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Eleven Analyst Stocks Trading Under $10 With Huge Implied Upside

Jon C. Ogg

Stocks challenged new all-time highs yet again this last week, yet investors keep being told that the bull market now is moving to a stock picker's market. 24/7 Wall St. reviews dozens of analyst research reports each day, looking for new ideas and hidden gems for our readers. While we often see many stocks to buy from Wall Street analyst reports, sometimes the stocks trading under $10 have incredible upside price targets.

As always, we would caution that stocks trading under $10 are often among the riskiest of all stocks. Still, many investors love the low-priced sticks as they feel like there is a larger room for upside. Some analysts even make projections of 50%, 100% or even exponential upside. That is not the sort of call you would expect for a Dow Jones Industrial Average component.

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If you want to see just how the indexes treat stocks under $10: only four of the S&P 500 stocks have traded under $10 for weeks. As of Friday, only two S&P 500 stocks were trading under $10.

Another consideration on risk in most of the stocks under $10 is that almost all of these selected from this past week would fail the "widows and orphans" suitability test. This is what brokers and financial advisors have to consider when it comes to ethics and suitability for clients.

In order to come up with this list of stocks under $10 this week, we literally went back over more than 300 different analyst calls from this past week alone. These are the 11 analyst stocks we tracked this past week with huge implied upside, if the analysts are correct in their calls.

Apollo Investment Corp. (AINV) was raised to Outperform from Market Perform with a $9.50 price target at Keefe Bruyette & Woods on Tuesday. While the stock was at $8.53 ahead of the call, the stock was at $8.34 on Friday, which now brings upside of about 14%, plus that dividend yield of almost 10%.

Atlantic Power Corp. (AT) was raised to Sector Perform from Underperform at RBC Capital Markets on Thursday. The report might not seem like much on the surface, but it eliminates a "sell" equivalent rating. Shares did rise about 1% to $3.53, and shares were even higher on Friday. The thing to remember is that this is one of the more controversial power generation stocks with an incredibly high dividend yield.

Ballard Power Systems Inc. (BLDP) had a massive week, with shares up $1 from trough to peak -- not bad for a $3 or $4 stock. A firm named Jennings Capital initiated Ballard with a Buy rating and gave a $4 price target on Wednesday, versus a prior $3.56 close. Shares rose immediately to above the $4 handle.

BlackBerry Ltd. (BBRY) saw many raised price targets on Friday after earnings, but the stock was not exactly raised in ratings too much. Note that the post-earnings jump in BlackBerry took shares up to $9.50 in mid-Friday trading. BMO raised its target to $9 from $8 and Nomura raised its target to $10 from $9. Canaccord Genuity said that there was a favorable business mix and solid cost controls driving slight upside, but also that it is still the early days on long road to potential profits.

BlackRock Kelso Capital Corp. (BKCC) was raised to Outperform from Market Perform at Keefe Bruyette & Woods on Tuesday. Its price target of $9.76 compared to an $8.63 prior close and an $8.83 mid-Friday level. While this is only upside targeted at 10% now, its new lower dividend yield is still counted as 9.5%.

Compugen Ltd. (CGEN) was started on Wednesday with an Outperform rating at JMP Securities with a $14 price target. The prior close was $9.06, but Compugen shares were down around $8.90 on Friday. This implies upside of more than 50%. Its 52-week range is $5.04 to $14.32.

Gastar Exploration Inc. (GST) was started with a Buy rating and given a $12.00 price target at Global Hunter, which implied close to 50% upside if the firm is correct. Shares hit a new 52-week high on Friday after the report.

MeetMe Inc. (MEET) was started with a Buy rating and a serious upside target of $4.50 at Wunderlich on Wednesday. The pre-report closing price was $1.93, and shares went above $2.25 by the time Friday rolled around.

Orbitz Worldwide Inc. (OWW) was started as Buy at UBS this past week amid a boom in travel demand. The firm gave a $10 price target, versus a pre-call $8.12 close, although shares hit a high of about $8.80 on Friday. Keep in mind that the 52-week high is $13.26, and the consensus price target is closer to $9 now.

Superior Drilling Products, Inc. (SDPI) was a double-plus-good call with two analysts giving it incredibly high marks. The micro-cap drill-bit and drilling tool outfit was started with a Buy rating and $8 price target at Wunderlich on Tuesday when the prior close was $5.74. Then the team at Roth Capital Partners came in with a new Buy rating on Wednesday, but with a more tame target of $6.75.

Agile Therapeutics Inc. (AGRX) is listed last here because it only came public at $6 back on May 23. It saw the quiet period come to an end, and analysts issued massive upside calls. Shares were around $8 in Friday trading, and this has a post-IPO range of $5.05 to $8.17. Cantor Fitzgerald started it with a Buy and $17 price target. Janney started it with a Buy rating and $18 price target. William Blair and RBC also started it with Outperform ratings.

The prior week's 12 analyst stock picks trading under $10 included shares of AMD, Alcatel-Lucent, Fusion-io (ahead of the buyout), Halozyme, ON Semi, Orexigen, Sprint and others. Friday's top analyst upgrades and downgrades included 3D Systems, AutoNation, BlackBerry, Coach, ExOne, JA Solar, Kroger, Oracle, Stratasys, Trina Solar and more. In case you missed Thursday's top analyst upgrades and downgrades, they included Amazon, Celgene, Cisco, FedEx, Nvidia, Starbucks and many more.

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