U.S. markets performed admirably this week, with the Dow Jones Industrial Average bouncing back to reach 17,000 again. Of course, far outside the venerable large-cap index were a number of sub-$5 stocks posting double-digit gains this week.
The energy sector in particular was strong due to a sharp bounce back in the price of crude oil. Pharmaceuticals continued to be leaders as well, even though the iShares Nasdaq Biotechnology Index (ETF) (NASDAQ:IBB) had an up-and-down week.
Here now are 5 of the strongest among the little stocks this week:
Best Stocks Under $5: Willbros Group Inc (WG)
10/09/15 Closing Price: $2.78 (+96% for the week)
Willbros Group Inc (NYSE:WG), a specialty energy infrastructure contractor, rose sharply this week as the company announced the completed closing of its sale of subsidiary Bemis, to Riggs Distler & Company, Inc., which is a subsidiary of Napec Inc. for approximately $19.2 million in cash.
The purpose of the sale was to reduce the company’s term loan debt to less than $100 million, while providing the firm with $43 million in cash for liquidity and working capital.
WG stock has been a roller coaster ride for investors. It was a $13 stock in 2014, sank to less than $1 per share by September 2015, and has since bounced back to its present price. Despite this week’s big price increase, there is not a whole lot to recommend at this point, and investors are cautioned to await a pullback before entering a long position.
Best Stocks Under $5: WaferGen Bio-Systems, Inc. (WGBS)
10/09/15 Closing Price: $2.03 (+65% for the week)
WaferGen Bio-Systems, Inc. (NASDAQ:WGBS) is a maker of electronic smartchip products and services for the biotechnology industry.
This week, WGBS stock was on fire as the company predicted it will report record revenue of $1.9 million to $2.1 million for the third quarter of 2015. This is a 52% to 68% increase year-over year. Analysts were only looking for $2 million in revenue for Q3.
WGBS stock has been quite volatile in recent months, falling from $4.25 to a recent low of $1.08, and now back to the $2.00 level. But at least this company has improving fundamentals to recommend.
Best Stocks Under $5: Marrone Bio Innovations Inc (MBII)
10/09/15 Closing Price: $3.52 (+64% for the week)
Marrone Bio Innovations Inc (NASDAQ:MBII) is a provider of biological based pest control and plant health products.
This week, MBII announced the Environmental Protection Agency’s approval of Majestene, its latest product that controls nematodes (roundworms) on a broad range of agricultural crops. Nematodes are said to cause up to $80 billion per year in crop damage around the world.
Majestene, a nontoxic substance, has been approved for both regular and organic crops.
MBII stock surged this week, breaking out above a three-month base before hitting resistance today at $3.75. It could easily retrace its move back to the $2.80 level, where its 200-day moving average resides, before heading higher.
Nematode control doesn’t sound very exciting, but MBII’s new product could be very lucrative to its bottom line over the long term.
Best Stocks Under $5: Westport Innovations Inc. (USA) (WPRT)
10/09/15 Closing Price: $3.92 (+51% for the week)
Westport Innovations Inc. (USA) (NASDAQ:WPRT) is a company that manufacturers fuel system technologies to allow petroleum fuel based engines to run on natural gas and alternative fuels.
What made Westport take off like a rocket this week was the signing of an agreement with Russian company, Gazprom PAO (OTCMKTS:OGZPY) to expand the use of natural gas vehicles and marketing development activities in Russia.
Gazprom seeks to upgrade current natural gas stations, as well as construct new ones, totaling about 500 by the year 2020. They say their natural gas consumption could rise from 400 million cubic meters in 2013 to 10.4 billion cubic meters by that year.
It looks like Westport has inked quite a deal for themselves that could grow the stock quite nicely over the next five years.
Best Stocks Under $5: Broadwind Energy Inc. (BWEN)
10/09/15 Closing Price: $3.14 (+32% for the week)
With the price of oil gaining about 8% this week, many of the sub $5 energy stocks were boosted higher, simply because of the price increase. However, Broadwind Energy Inc. (NASDAQ:BWEN) was one of the few that actually had any news other than the spike in oil. Broadwind produces gears and gearing systems for wind, oil and gas, and mining operations.
BWEN released an earnings report for the second quarter of 2015 with EPS of 11 cents a share on revenue of $65.23 million. EPS was a penny below last year, and revenue a little over $3 million less.
However, Broadwind recently announced $6 million in new orders that its subsidiary, Brad Foote Gear Works, Inc., will produce.
BWEN stock, like so many other energy plays, was beaten down in price from July to the end of September, but has since bounced back. Where it goes from here remains to be seen.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
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