While most of Wall Street focuses on large-cap 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 hundreds, all the way up to over $1,000 per share or more. At those steep prices, it is difficult to get any decent share count leverage.
Many investors, especially more aggressive traders, look at lower-priced stocks as a way not only to 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.
Skeptics of low-priced shares should remember that at one point Amazon, Apple and Netflix traded in the single digits. Nvidia, which has exploded higher on AI semiconductor chips, traded under $10 for years. One stock we featured over the years, Zynga, was purchased by Take-Two Interactive. Cogent Biosciences, which we featured last March, has tripled since then.
While looking for more home runs, we screened all the companies that Cathie Wood’s ARK funds own, looking for stocks trading under $10 with big-time potential. Although all five of the following stocks are ARK holdings and rated Buy, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Archer Aviation
This company recently signed a potentially huge deal with the Air Force for air taxis. Archer Aviation Inc. (NYSE: ACHR) is an urban air mobility company that designs, develops, manufactures and operates electric vertical takeoff and landing (eVTOL) aircraft to carry passengers.
Archer Aviation is a leader in eVTOL aircraft, and it announced earlier this week that it has significantly expanded its partnership with the U.S. Department of Defense by signing new contracts with the U.S. Air Force with a total value of up to $142 million.
The new contracts signal the U.S. military’s recognition of the transformative potential that Archer’s innovative eVTOL aircraft brings to the country’s armed forces. This new execution phase of the partnership includes the delivery of up to six of Archer’s Midnight aircraft to the Air Force, the sharing of additional flight test data and certification-related test reports, pilot training and the development of maintenance and repair operations.
Canaccord Genuity started coverage earlier this summer. Its $9 target price is a bit less than the $9.25 consensus target. The stock traded on Friday at $5.75.
Codexis
This is a micro-cap biotech that could be poised to explode higher. Codexis Inc. (NASDAQ: CDXS) discovers, develops and sells enzymes and other proteins. The company operates through two segments, Performance Enzymes and Novel Biotherapeutics.
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