While Most of Wall Street focuses on large and mega-cap stocks, as they provide a degree of safety and liquidity, many investors are limited in the number of shares they can buy. Many of the biggest public companies, especially the technology giants, trade in the low to mid hundreds, all the way up to over $1,000 per share. At those steep prices, it’s pretty hard to get any decent share count leverage.

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 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 much better suited for aggressive accounts, they could prove exciting additions to portfolios looking for solid alpha potential.

Also be sure to check out last week’s look at stocks under $10 with big upside potential.

Ceragon Networks

This small-cap company could be a beneficiary of the move to 5G. Ceragon Networks Inc. (NASDAQ: CRNT) offers wireless backhaul solutions. Its products include FibeAir IP-20 Platform, FibeAir IP-20 Assured Platform and Network Management. The company provides its services to wireless service providers, public safety organizations, government agencies and utility companies, among others. Its solutions are deployed by over 460 service providers, as well as a range of private network owners, in over 130 countries.


















































































Ceragon’s FibeAir IP-20 platform offers flexibility in choosing all-outdoor, split-mount and all-indoor configurations to suit any deployment scenario. The FibeAir IP-20 platform includes product categories, such as short-haul-access and short haul-aggregation. The FibeAir IP-20 Assured platform includes product categories, such as short-haul-access, short-haul-aggregation, small cells, long-haul and enterprise access.

Oppenheimer recently upgraded the stock to Outperform from Perform with a $4.50 price objective. The Wall Street consensus target price is $4.40, and the stock traded Friday at $3.35 a share.

GoPro

This stock has taken a beating over the past year but could be ready for a big move higher. GoPro Inc. (NASDAQ: GPRO) is the worldwide leader in action cameras, with over 25 million cameras sold and 21% U.S. digital camera market share, according to NPD. GoPro sells a series of cameras at various price points, from the GoPro Hero to the GoPro Hero6 Black, and multiple accessories.

The company recently announced a product portfolio refresh with HERO7 Black ($399), HERO7 Silver ($299) and HERO7 White ($199). Flagship feature upgrades include better image stabilization and live streaming. The company also reported second-quarter revenue that was above Wall Street and management’s outlook range, and channel down to a healthy 10 weeks exiting the quarter. Optimism is building, but some remain cautious, given component supply constraints, product differentiation uncertainty and execution risk.

Oppenheimer rates the stock Outperform with a $9 price target, and the posted consensus target is $6.09. The stock traded at $7.20 on Friday


Melinta Therapeutics

This small-cap play could be a hot pick for super-aggressive accounts. Melinta Therapeutics Inc. (NASDAQ: MLNT) develops and commercializes novel antibiotics designed to provide therapeutic solutions. The company’s lead product is Baxdela, an antibiotic approved by the United States Food and Drug Administration (FDA) for use in the treatment of acute bacterial skin and skin structure infections.

The company also has an extensive pipeline of preclinical and clinical stage products This pipeline includes many important classes of antibiotics, each targeted at a different segment of the anti-infective market.

The Jefferies team recently started coverage with a Buy rating and noted this:

The Company operates as a pure play antibiotics business, with 4 marketed products and an expanded sales force. The benefit from the salesforce expansion should be seen in the third quarter, but we see further catalysts as a Phase 3 readout for Baxdela is due by the end of 2018 as well as potential EU approvals for Baxdela and Vabomere by the end of the year or in 2019. We see peak sales estimates of ~$240 million and ~$270 million for Baxdela and Vabomere respectively.

The huge $15 Jefferies price target compares with a $13.20 consensus target. The shares were trading at $3.95.

Superior Energy Services

Superior Energy Services Inc. (NYSE: SPN) provides a range of services and products to the energy industry related to the exploration, development and production of oil and natural gas. The company’s segments include Drilling Products and Services, which rents and sells bottom hole assemblies, drill pipe, tubulars and specialized equipment for use with onshore and offshore oil and gas well drilling, production and workover activities.

The Onshore Completion and Workover Services unit provides pressure pumping services used to complete and stimulate production in new oil and gas wells, fluid handling services and well servicing rigs that provide a range of well completion and maintenance services.

Lastly, Production Services provides intervention services, such as coiled tubing, cased hole and mechanical wireline, hydraulic workover and snubbing, and remedial pumping services, and Technical Solutions, which provides services requiring specialized engineering, manufacturing or project planning.

SunTrust rates the stock a Buy and has a $13 price target. The consensus target is $11.60. Shares traded at $9.85.



Verastem

This smaller cap biotech stock has huge upside to the consensus price target. Verastem Inc. (NASDAQ: VSTM) is focused on discovering and developing drugs to improve outcomes for patients with cancer. Its advanced product candidates are VS 6063, VS 4718 and VS 5584.

The company’s programs target the focal adhesion kinase (FAK) and the PI3K/mTOR signaling pathways. FAK is a non-receptor tyrosine kinase encoded by the PTK-2 gene that is involved in cellular adhesion and, in cancer, metastatic capability.

Oppenheimer’s Outperform rating comes with a massive $16 price target, which compares with a $15.79 consensus target. The stock traded at $7.30.


​OCTOBER NEWSLETTER 1

​HOME PRICES DROPPING

IMPORTANT EVENTS

TOP PERFORMING STOCK

​TIME TO BUY

STOCKS TO BUY TRADING UNDER $10

​NEW CEO

The extraordinary recovery of the housing market since the Great Recession may have ended. After the home prices in several major markets lost much more than half their value in the recession, they have recovered and, in some cases, moved above their original peaks, which primarily occurred in 2005. Recently, homeowners have begun to cut prices again. In the most recent four-week period, the prices of 26.6% of homes for sale in the United States have been dropped. The housing boom shows signs of ending.

The most recent data on home prices comes from home sales service Redfin and covers the four weeks that ended September 16. A drop in a home’s price is calculated if that reduction is between 1% and 50%. Researchers at Redfin reported that the four-week drop was the sharpest since 2010, when the firm started to keep records. The data are only for markets in which Redfin provides it service.

Taylor Marr, Redfin senior economist, said:

After years of strong price growth and intense competition for homes, buyers are taking advantage of the market’s easing pressure by being selective about which homes to offer on and how high to bid. But there are some early signs of a softening market, and the increase in price drops may be another indicator that sellers are going to have trouble getting the prices, and the bidding wars, that they may have just months ago. Instead, many are finding their homes are sitting on the market without much interest until they start reducing their prices.

The markets in which prices fell were, in some cases, those that were most badly hurt after the last housing boom:

Las Vegas (+12.3 points to 28.1%), San Jose (+10.7 pts to 25.7%), Seattle (+10.1 pts to 37.1%), and Atlanta (+9.0 pts to 27.9%) were among the markets that posted the biggest year-over-year increases in the share of homes with price drops.

California in general had some of the largest markets with price reductions during the recession. Few markets had such large price erosion in the same period as Las Vega.

In coming weeks, it will become clear if the price drops are a blip or a major trend. If they are a trend, the housing recovery is over.



Goldman Sachs Group Inc. (NYSE: GS) shouldered aside its competitors to assume the role of the worst-performing Dow Jones industrials stock for the year to date. The big bank’s stock dropped 4.7% last week, and shares are down 12% for the year to date.

The second-worst Dow stock so far this year is 3M Co. (NYSE: MMM), which is down 10.5%. That is followed by DowDuPont Inc. (NYSE: DWDP), down 9.7%, then Procter & Gamble Co. (NYSE: PG), down 9.41%, and Walmart Inc. (NYSE: WMT), down 4.9%. Eleven of the 30 Dow stocks have traded lower for 2018.

The blue-chip index dropped 285.19 points last week to close at 26,458.31, down about 1.1% compared to the previous Friday’s close. At the end of the third quarter, the Dow is up 9.4%, better than the S&P 500 (up 7.4%) and the Nasdaq Composite (up 7.2%). For the year to date, the index is up 6.6%, trailing both the S&P 500 (up 8.1%) and the Nasdaq Composite (up 14.8%).

Friday was the Goldman CEO Lloyd Blankfein’s last day on the job. Monday is David Solomon’s first day as chief executive officer, and in January he also will assume Blankfein’s role as chair of the board. One of Solomon’s first issues will be to turn around the bank’s trading desk. Low volatility and low interest rates have weighed on revenues as customers directed investments at index funds and other passive investments.

The bank also launched its consumer bank, Marcus, in the United Kingdom last week. The bank will begin by accepting online-only deposits to savings accounts paying 1.5% interest. Marcus was rolled out in the United States in 2016 and currently claims 1.5 million customers with some $23.2 billion in deposits and $3.1 billion in loans outstanding at the end of June this year.

Goldman and other big banks are having a rough year. While the S&P 500 index is up nearly 9%, the capital markets sector is down by about 3.4%. Goldman’s performance has been much worse. The bank will report third-quarter results on October 16, and analysts are expecting earnings per share of $5.40 on revenue of $8.44 billion.

The bank’s stock closed at $224.24 on Friday, down about 1.5% for the day in a 52-week range of $218.89 to $275.31. The 12-month consensus price target on the stock is $274.68, and the forward price-to-earnings ratio is 8.87



The new Canada-United States-Mexico trade agreement helped global markets. According to The Wall Street Journal:

Investors greeted the completion of a new North American trade pact with relief Monday, lifting most indexes, as the Trump administration turned its focus on getting the deal through a divided Congress and toward even larger economic feuds with China.

Uncertainty about trade has been a worry of businesses and investors for months, after Mr. Trump began advancing an ambitious agenda that included a new North American Free Trade Agreement, tariffs on U.S. metals imports and a rewrite of U.S. economic ties with China.

Companies that lose money are doing well in the IPO market. According to The Wall Street Journal:

Stock investors are welcoming money-losing companies into the public markets this year with open arms.

About 83% of U.S.-listed initial public offerings in 2018’s first three quarters involve companies that lost money in the 12 months leading up to their debut, according to data compiled by University of Florida finance professor Jay Ritter. That is the highest proportion on record, according to Mr. Ritter, an IPO expert whose data goes back to 1980.

The head of the International Monetary Fund (IMF) is worried about the worldwide economy. According to The Wall Street Journal:

International Monetary Fund Managing Director Christine Lagarde is raising alarm bells about the health of the global economy, saying international growth may have plateaued.

“For most countries, it has become more difficult to deliver on the promise of greater prosperity, because the global economic weather is beginning to change,” Ms. Lagarde said in a speech in Washington on Monday.

Crude has hit a four-year peak. According to Bloomberg:

Oil extended gains near the highest level in almost four years as investors grapple with doubts over OPEC’s ability to replace falling exports from Iran.

Futures rose as much as 0.8 percent in New York after closing Monday at the highest since November 2014. In Iran, crude exports declined to their lowest in 2 1/2 years before the impending return of U.S. sanctions. Meanwhile, the 24-year-old North American Free Trade Agreement will now be superseded by the U.S.-Mexico-Canada Agreement, covering a region that trades more than $1 trillion annually.

Amazon.com Inc.’s (NASDAQ: AMZN) counterfeit issue is causing it more trouble. According to CNBC:

Amazon’s counterfeit problem has caught the attention of a major retail industry advocacy group.

The American Apparel & Footwear Association (AAFA), which represents more than 1,000 brands, recommended on Monday that certain Amazon sites be added to the U.S. government’s annual “Notorious Markets” list, which identifies commerce sites and companies that facilitate the sale of counterfeit goods.

One of the founders of Microsoft Corp. (NASDAQ: MSFT) said he has cancer. According to CNNMoney:

Microsoft co-founder Paul Allen said Monday that his non-Hodgkin’s lymphoma has returned.

Allen was treated for the disease in 2009, and had been in remission. In a new statement, he said his doctors are treating it again, and he plans “on fighting this aggressively.

Copyright ©​ Daniel Cullinane CPA.

​WORST PERFORMING STOCK

​DOW JONES



Goldman Sachs Group Inc. (NYSE: GS) shouldered aside its competitors to assume the role of the worst-performing Dow Jones industrials stock for the year to date. The big bank’s stock dropped 4.7% last week, and shares are down 12% for the year to date.

The second-worst Dow stock so far this year is 3M Co. (NYSE: MMM), which is down 10.5%. That is followed by DowDuPont Inc. (NYSE: DWDP), down 9.7%, then Procter & Gamble Co. (NYSE: PG), down 9.41%, and Walmart Inc. (NYSE: WMT), down 4.9%. Eleven of the 30 Dow stocks have traded lower for 2018.

The blue-chip index dropped 285.19 points last week to close at 26,458.31, down about 1.1% compared to the previous Friday’s close. At the end of the third quarter, the Dow is up 9.4%, better than the S&P 500 (up 7.4%) and the Nasdaq Composite (up 7.2%). For the year to date, the index is up 6.6%, trailing both the S&P 500 (up 8.1%) and the Nasdaq Composite (up 14.8%).

Friday was the Goldman CEO Lloyd Blankfein’s last day on the job. Monday is David Solomon’s first day as chief executive officer, and in January he also will assume Blankfein’s role as chair of the board. One of Solomon’s first issues will be to turn around the bank’s trading desk. Low volatility and low interest rates have weighed on revenues as customers directed investments at index funds and other passive investments.

The bank also launched its consumer bank, Marcus, in the United Kingdom last week. The bank will begin by accepting online-only deposits to savings accounts paying 1.5% interest. Marcus was rolled out in the United States in 2016 and currently claims 1.5 million customers with some $23.2 billion in deposits and $3.1 billion in loans outstanding at the end of June this year.

Goldman and other big banks are having a rough year. While the S&P 500 index is up nearly 9%, the capital markets sector is down by about 3.4%. Goldman’s performance has been much worse. The bank will report third-quarter results on October 16, and analysts are expecting earnings per share of $5.40 on revenue of $8.44 billion.

The bank’s stock closed at $224.24 on Friday, down about 1.5% for the day in a 52-week range of $218.89 to $275.31. The 12-month consensus price target on the stock is $274.68, and the forward price-to-earnings ratio is 8.87

​In recent months, data related to sales of both new and existing homes show that the number of sales is flattening out, if not actually declining. Sales of existing homes have dropped slightly in each of the past five months. New home sales have been declining for eight straight months.

Not all of that decline is attributable to rising interest rates, higher prices for homes, or low inventory. Prices have continued to rise although the price hikes have begun to slow. Inventory is also rising, although the increases have just begun and are, so far, fairly modest. Interest rates have averaged more than 4.5% for the past five consecutive months and more than 4.4% for the past seven.

In general, interest rates are the first leading indicator in the housing market and have a strong influence on sales. Sales are the second leading indicator and exert their influence on prices. Price, in turn, leads inventory.

So, where is the market right now?

Danielle Hale, chief economist at Realtor.com, said, “The signs are pointing to a market that’s shifting toward buyers.”

Mortgage interest rates have risen about 0.8% over the past 12-months. That’s important because every additional 1% increase results in a jump of $143 a month in your mortgage payment. For first-time buyers–and most of the rest of us–that could affect getting a loan at all.

That leads to a decline in sales which encourages sellers to drop their price. Realtor.com notes that in August the number of homes in Santa Clara County, California (aka the Silicon Valley) on which asking prices were lowered soared by 171%.

Also in August, the number of listings in the Silicon Valley rose by 77%. Buyers are asking themselves, “If I buy now, am I paying the highest possible price? Maybe I should wait a while and see if prices come down.” If, in fact, housing prices have risen too much, inventory will swell, and prices will have to come down if builders and homeowners want to sell.

This part of the cycle is just beginning, and the ride could be bumpy for a while, especially as we enter the holiday season, a traditionally low-sales period for real estate.

For more details and discussion, visit the Realtor.com website.

​In a press release Monday morning, General Electric Co. (NYSE: GE) named lead director H. Lawrence Culp as CEO and board chair, replacing John Flannery, who has been CEO for just over a year. Flannery, who spent 30 years at GE, before being appointed CEO, got a single line in the press announcement from new lead director Thomas Horton: “On behalf of the board, I thank John for his significant contributions and long service to GE.” Here’s your hat, what’s your hurry?

The company’s recent woes in the Power division have made GE’s troubles worse, and one could argue that the division’s struggles over the past few years were Flannery’s albatross, hung around his neck by the Jeff Immelt, the former CEO that Flannery replaced.

In any event, if the change at the top is good news (and investors seem to think it is), GE had some bad news:

While GE’s businesses other than Power are generally performing consistently with previous guidance, due to weaker performance in the GE Power business, the Company will fall short of previously indicated guidance for free cash flow and EPS for 2018. In addition, GE expects to take a non-cash goodwill impairment charge related to the GE Power business.

GE reports third-quarter results on October 25 and has promised “additional commentary” on the goodwill write-down at that time. For now, the company said it is writing down “substantially all” the Power division’s current goodwill balance of around $23 billion. That makes the balance sheet look worse, but represents no cash loss. At the end of the June quarter, GE reported a total of $81.5 billion in goodwill, just under a quarter of all its assets.

New CEO Culp said:

GE remains a fundamentally strong company with great businesses and tremendous talent. It is a privilege to be asked to lead this iconic company. We will be working very hard in the coming weeks to drive superior execution, and we will move with urgency. We remain committed to strengthening the balance sheet including deleveraging. Tom and I will work with our board colleagues on opportunities for continued board renewal. We have a lot of work ahead of us to unlock the value of GE.

Culp, 55, was CEO and president of industrial manufacturer Danaher Industries from 2000 to 2014. During his time as CEO, the company’s share price rose fivefold, according to today’s press release. Lead director Horton led American Airlines from 2011 through 2014.

GE’s stock traded up more than 14% about an hour before Monday’s opening bell at $12.88. The stock’s 52-week range is $11.21 to $24.89, and the consensus price target is $16.54. The company’s forward price-to-earnings ratio is 11.18.

Daniel Cullinane CPA

25 Plaza 5 25th fl Jersey City NJ                                          phone 732-516-1648 fax 732-516-9778

MBA Taxation

Daniel Cullinane CPA

2500 Plaza 5 25th fl  Jersey City NJ 07311                                                          phone 732-516-1648  fax 732-516-9778

                 MBA TAXATION