It was a difficult week on Wall Street again, as the major indices lost ground amid concerns over employment and productivity data and whether the Fed will react with an interest-rate hike in September.
Despite the uncertainty, a number of sub-$5 stocks were still quite strong this week, and despite the pullback in the broader biotech industry, many small, unknown biopharmaceutical companies continued to score huge gains on news of medical breakthroughs.
This week’s five best stocks under $5 are a diversified group. Here’s a look:
Best Stocks Under $5: Career Education Corp. (CECO)
8/7/15 Closing Price: $4.20 (+32%)
Career Education Corp. (NASDAQ:CECO) is a Schaumburg, Illinois-based company that owns and operates several private universities, and offers both in class and on-line programs. Their University group includes American InterContinental University and Colorado Technical University.
This week CECO stock blasted up after reporting second quarter earnings of an adjusted loss of 14 cents per share on $174.8 million in revenue, compared to a loss of 65 cents a share on $186.2 million for Q2 2014. The Street was expecting a gain of 12 cents a share. Student enrollment was up 2.3% in the second quarter.
CECO also announced the addition of Todd Nelson to become President and CEO, as of August 12, 2015. Mr. Nelson was previously the CEO and Director of Education Management Corporation.
Best Stocks Under $5: Ikanos Communications, Inc. (IKAN)
8/7/15 Closing Price: $2.69 (+54%)
Ikanos Communications (NASDAQ:IKAN) is a semiconductor and software provider for broadband networks. It was a busy week for the Freemont, Ca based company as on Thursday, Qualcomm, Inc. (NASDAQ:QCOM) announced that subsidiary Qualcomm Atheros, Inc. will be acquiring Ikanos for $2.75 per share in cash, along with assuming all of IKAN’s outstanding debts upon the closing of the transaction.
That same day, IKAN also reported second-quarter earnings of a loss of 72 cents per share on revenue of $11.1 million. IKAN’s earnings were an improvement over the one year ago loss of $1.24, and revenue was substantially better than the $10.2 million for the second quarter of 2014.
Best Stocks Under $5: Finjan Holdings (FNJN)
8/7/15 Closing Price: $2.05 (+26%)
It was a highly profitable week for Finjan Holdings (NASDAQ:FNJN) after the jury in the California district court lawsuit of Finjan, Inc. vs Blue Coat Systems Inc returned a unanimous verdict that Blue Coat had engaged in patent infringement on five different products against Finjan patents.
The jury awarded Finjan over $39,500,000 in damages, saying they were reasonable royalties.
FNJN has recently filed a second patent infringement suit against Blue Coat, and also has filed similar suits against five other cybersecurity companies.
Best Stocks Under $5: GlobeImmune (GBIM)
8/7/15 Closing Price: $2.68 (+22%)
This week, GBIM soared on heavy volume after reporting that Celgene Corporation (NASDAQ:CELG) has exercised an option to exclusively license one of GBIM’s Tarmogen products (GI-6207) as a treatment for certain cancers. This is the second time that Celgene has licensed one of GBIM’s Tarmogen products, as a result of their 2009 collaboration.
In exchange for the licensing, GlobeImmune will get an option exercise payment of $1.9 million, and will become eligible for royalties and sales milestones. GI-6207 is currently in Phase 2 clinical trial at the National Cancer Institute, and is being tested as a treatment for medullary thyroid cancer (MTC). Results should be finalized in the latter part of 2016.
Best Stocks Under $5: Hhgregg (HGG)
8/7/15 Closing Price: $3.97 (+19%)
Retailer Hhgregg (HGG) scored big this week after reporting a loss of 32 cents a share on first-quarter earnings on revenue of $441.1 million. Sales were down, both in stores as well as online.
The earnings loss was 4 cents better than a year ago, and was 5 cents better than the analysts’ expectations. However revenue was slightly below the street’s estimates of $445.5 million.
HGG stock price was cut in half over the past year, but in only two days this week, they made up four months worth of losses.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
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