It was a turbulent week on Wall Street, with the Dow falling several hundred points on Wednesday and Thursday, and then bouncing back sharply more than 2% on Friday after the strong new employment report affirmed the chances for a Fed interest rate hike on Dec. 16. Weak economic data, a disappointing announcement from the ECB, and a possible terrorist attack in California all weighed heavily on stocks.
However, many low-priced stocks performed very well this week, including one very-well-known former stalwart in the cosmetics industry. Below are the 5 sub-$5 stocks which gave investors the most to cheer about this week:
Best Stocks Under $5: Giga- tronics, Incorporated (GIGA)
12/04/15 Closing Price: $1.85 (+66% for the week)
Giga-tronics, Incorporated (NASDAQ:GIGA) was the best-performing little stock this week, after the San Ramon, CA-based company announced they have inked a deal with Lockheed Martin Corporation (NYSE:LMT) to develop and license threat-simulation software.
The software will be a part of GIGA’s new Advanced Signal Generator Hardware Platform, which is expected to be shipped with the software by June 2016. The deal was released three weeks ago and was said to be worth $1.4 million, but the name of GIGA’s partner was not named at that time.
GIGA stock bolted from $1.15 to $3.75 on Wednesday’s announcement, but has since pulled back considerably, giving investors another chance to lock in a long position without chasing a parabolic price.
Best Stocks Under $5: Dehaier Medical Systems Ltd (DHRM)
12/04/15 Closing Price: $2.51 (+48% for the week)
Dehaier Medical Systems Ltd (NASDAQ:DHRM) is a China-based company that imports and sells medical devices to health centers and hospitals throughout China.
This week, DHRM announced they have received a proposal from Hangzhou Liaison Interactive Information Technology (SHE:002280) to invest $20 million in DHRM, by purchasing 10 million newly issued common shares of stock for $2.00 per share.
At first the company said they were not interested in the deal. But this morning, the company has announced they will form a special committee to consider the Hangzhou proposal.
This week’s announcement popped DHRM stock over the 200 day moving average. But investors should note that the stock has been a laggard since early 2014, when it sold near $12 a share.
Best Stocks Under $5: Highpower International Inc (HPJ)
12/04/15 Closing Price: $3.32 (+13% for the week)
Highpower International Inc (NASDAQ:HPJ) was another company receiving a non-binding proposal this week.
On Monday, Highpower announced they had been contacted by Anshan Co-Operation (Group) Co., Ltd, certain management of HPJ, and China Innovative Capital Management Ltd. to purchase approximately $101.7 million in exchange for more than 50% of the equity in each of the three subsidiaries that Highpower owns and operates.
The three subsidiaries are Shenzhen Highpower Technology Co., Ltd., Springpower Technology (Shenzhen) Co., Ltd., and Icon Energy System Co., Ltd.
As a result of this proposed acquisition, the three purchasing entities would then become the controlling shareholders of each of the HPJ subsidiaries.
Highpower is another company whose stock has languished for quite a while, falling from $8 a share in October 2014, to a recent low near $2 a share.
Best Stocks Under $5: GenVec Inc (GNVC)
12/04/15 Closing Price: $2.29 (+31% for the week)
GenVec Inc (NASDAQ:GNVC) had a huge upside day today to propel it among this week’s best stocks under $5. The Gaithersburg, MD-based clinical-stage gene delivery company announced the U.S. Patent and Trademark Office has given it a notice of allowance for GenVec’s patent application, “Affenadenovirus (Gorilla) or Adenoviral Vectors and Methods of Use”.
An adenoviral vector is a type of virus that creates a small percentage of the upper respiratory infections in the general population. The adenoviral vectors from gorillas are a type to which most people do not have pre-existing immunity, so they are more effective in developing future vaccines.
Best Stocks Under $5: Avon Products, Inc. (AVP)
12/04/15 Closing Price: $4.22 (+23% for the week)
Avon Products, Inc. (NYSE:AVP) was calling all investors this week after surging higher on reports of a possible acquisition by private equity firm Cerberus Capital Management.
Also this week, Avon received criticism from Barington Capital Group, which has a 3% stake in AVP, and said that Avon needs a management change and cost cutting up to $700 million over the next 24 months.
However, Avon has been cost cutting over the last few years with frequent layoffs of personnel. The company laid off 650 people in December 2013, and then another 600 in 2014, in an effort to save $400 million by 2016. In addition, salaries were cut for their hourly associates, and no more cost-of-living raises were given.
The beleaguered cosmetics firm has seen its stock drop from $22 to a recent low near $2 over the past five years. Some major changes could only help this once great company stave off bankruptcy.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
