It was quite a volatile week on Wall Street, with the major indices sinking and rising all week. For the sub-$5 stocks, it was still a good week, with many individual and diversified issues rising above 20%. This week, along with the usual lesser-known names were several very recognizable stock managed substantial gains.
Best Stocks Under $5: Forward Industries, Inc. (NASDAQ:FORD)
8/28/15 Closing Price: $1.67 (+61%)
Please do not confuse Forward Industries, Inc. (NASDAQ:FORD) with Ford Motor Co (NYSE:F). Forward is a small company that manufactures mobile phone cases and other types of packaging for corporations as well. This week, FORD reported signing an extension with Bayer Healthcare (OTCMKTS:BAYRY) to supply custom carrying cases for Bayer’s diabetic products over the next three years. This extends the current contract which would have ended in late 2016.
This is the second time within the last month that FORD stock has made a parabolic spike. On August 11, the stock jumped from its previous close of $0.65 to $1.70, even reaching $3.90 intra-day before falling back. The stock then declined to $1.03 before beginning another ascension this week. Despite being down about 30% today, the stock still finished 57% higher on the week.
FORD stock is definitely not for the faint of heart!
Best Stocks Under $5: 6d Global Technologies Inc (SIXD)
8/28/15 Closing Price: $2.72 (+85%)
6d Global Technologies Inc (SIXD) is a company that manages a portfolio of digital business solutions companies. This week, some insider buying triggered a huge price spike this week, as it was disclosed that Tejune Kang, CEO of SIXD bought 8,549 shares of company stock on Tuesday at $2.30 per share for a total value of $19,696.
This was a follow up to another purchase by Kang on August 19 of 19,919 shares at $2.33 per share, for a total of $46,411. SIXD, formerly Cleantech Innovations, Inc., has a 52-week high of $19.41 per share before it cratered in mid-July. It’s not surprising that company insiders would be purchasing stock at these low levels, but perhaps Mr. Kang has a better feeling about the company’s future than does the general market.
Best Stocks Under $5: NQ Mobile Inc (ADR) (NQ)
8/28/15 Closing Price: $4.27 (+30%)
NQ Mobile INC (ADR) (NQ) had a solid week after posting a good quarterly earnings report and announcing that the company is selling its entire stake in FL Mobile and online game publishing unit to Beijing Jinxing Ronda Investment Co. Ltd. for a minimum of $626 million. An independent third party will decide the final price.
NQ reported second-quarter 2015 results this week, posting a net loss of 2 cents per ADS, compared with a loss of 22 cents per ADS a year ago. Revenue of $102.1 million was 25% above the year ago quarter. The company expects Q3 revenue to fall between $110 million and $112 million.
NQ also announced its decision to sell Beijing NationSky Network Technology Co. to Hou Shuli, the founder and CEO of NationSky for $80 million.
However, investors should be cautious about NQ stock. Muddy Water Research recently alleged that NQ was creating fraudulent numbers, and that 72% or more of NQ’s 2012 China security revenues came from a shell company called Yidatong, that NQ actually owns.
Best Stocks Under $5: Cliffs Natural Resources (CLF)
8/28/15 Closing Price: $3.82 (+15%)
This week, CLF announced the expiration, of its tender offer of its outstanding 3.95% Senior Notes due 2018. The total amount of the notes validly tendered was $124,839,000.
Chairman, President, and CEO Lourenco Goncalves noted that the tender offer allowed CLF to make significant progress toward reducing its nearest-dated maturity, while achieving a $125 million reduction in total debt.
It has been a very rocky road for the mining and natural resources company, a company that was established way back in 1847. Analyst Gordon Johnson of Axiom Capital Management recently gave CLF a “sell” rating and $2 end-of-year price target, and said that China’s devaluation of the Yuan is the “Nail in the Coffin” for CLF.
Best Stocks Under $5: Peabody Energy (BTU)
8/28/15 Closing Price: $2.39 (+34%)
Peabody Energy (BTU) is another well-known company that has fallen on hard times. But this week, BTU was a solid gainer for two reasons. First, there was a report that the company will restructure its $6.3 billion debt. Peabody hired financial advisory firm Lazard Ltd (NYSE:LAZ) and legal counsel Jones Day to help Peabody cut its debt and avoid bankruptcy. One possible avenue would be to do a debt swap for new shares or convertible notes.
The second reason that BTU rose this week was simply short covering, as energy, and in particular, coal stocks staged a strong rebound on Thursday.
BTU stock was trading at nearly $16 a year ago, and recently closed at $1.02 per share. If you believe that coal still has a future in America, BTU is quite a bargain at this level.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
More From InvestorPlace
- 5 Stocks to Sell for September
- 3 Preferred Stocks Offering Safe, High Yields
- 5 Blue-Chips to Sell on “Pump-and-Dump” Fears