Investors want to see a return on investment, it’s as simple as that. Regardless of the size of the investment, the end goal remains the same. Sure, there are several ways to go about achieving this objective, yet time after time Wall Street observers circle back to a single tried and true strategy.
Growth investing involves identifying the stocks with long-term growth prospects that go above and beyond those of their peers.
It should be noted, though, that plays in the growth-stock arena can sometimes come with a price tag to match their huge potential for gains. However, there are compelling names out there that don’t cost a fortune.
While some naysayers might argue that you get what you pay for, others will point out that stocks trading at low levels can represent some of the most compelling names on the Street, with entry points that make them even more attractive.
With this in mind, I used TipRanks’ Stock Screener tool during my own search for affordable growth names. After sorting the results by current share price, analyst consensus and price target, the tool revealed three stocks that have received a wealth of support from Wall Street analysts, all under $5 per share. To top it all off, each boasts massive upside potential from current levels.
Matinas BioPharma (MTNB)
Like the name suggests, Matinas BioPharma Holdings (NYSE MKT:MTNB) is a biopharma focused on the development of lead candidate, MAT9001, its prescription-only omega-3 fatty acid drug for cardiovascular and metabolic conditions. After the FDA approved the label expansion of Amarin’s Vascepa drug to include cardiovascular disease patients with high triglycerides of greater than 150 mg/dL, some analysts believe that MTNB’s $1.44 share price is a bargain.
Piper Sandler analyst Edward Tenthoff tells investors that his bullish thesis is primarily driven by earlier data published by MTNB. Back in 2015, the company reported that during a Phase 1 study, MAT9001 was found to have produced a greater reduction of triglycerides, with the figure coming in at 33% compare to Vascapa’s 11%.
The drug is currently being evaluated in the Phase 2 ENHANCE-IT study versus Vascepa. With data slated for release in the fourth quarter of this year, big things could be on the way. Tenthoff argues MTNB could start a single Phase 3 severe hypertriglyceridemia trial in 2021 and see potential approval in 2023. In addition, he thinks that the importance of omega-3-based medicines is expanding.
All of the above factors prompted the analyst to start his MTNB coverage by publishing an “overweight” rating and setting a $3 price target. Should the target be met, shares could be in for a 108% gain over the next twelve months.
Similarly, the rest of the Street takes a bullish approach when it comes to MTNB. Out of four analysts tracking the name over the last three months, 100% see the stock as a “buy,” making the consensus rating a “strong buy.” Given the $3.25 average price target, the upside potential of 126% surpasses Tenthoff’s estimate. See the MTNB stock analysis.
Northern Oil And Gas (NOG)
Northern Oil and Gas (NYSE MKT:NOG) is one of the primary non-operator franchises in the Bakken and Three Forks plays in the Williston Basin of North Dakota and Montana. Its total footprint, which lands at about 165,000 acres, as well as its proved reserves of 65.3 million barrels of oil equivalent at year-end 2015, has helped cement its status as one of the leading players in the space. Its $1.69 price tag seems almost too good to be true.
Back in December, the company gave investors a reason to get excited after it announced that it would start paying out a quarterly dividend. The first dividend will come in at two cents per share, payable in April 2020. In addition, the forward yield lands at 3.14%.
This news prompted Imperial Capital analyst Jason Wangler to boost his rating from “in-line” to “outperform.” He argues that while the dividend is modest, it demonstrates that NOG has taken steps in the right direction in terms of its balance sheet over the last two years. On top of this, it also means that the name can be thought of as a yield vehicle.
It makes sense, then, that in addition to the upgrade, Wangler bumped up the price target from $2 to $2.50. At this new target, the upside potential comes in at 48%.
When it comes to other analyst activity, it has been relatively quiet on Wall Street. That being said, the two other analysts that published a review in the last three months rated NOG as a “buy,” making the Street consensus a “strong buy.” Not to mention the $3.25 average price target brings the upside potential to 92%. See the NOG stock analysis.
Durect Corporation (DRRX)
Durect Corporation (NASDAQ:DRRX) has a simple objective: to transform medicine. It wants to develop drugs that can provide meaningful advances in patient health and wellbeing. At the bargain price of $2.12 per share, analysts warn investors that if they wait too long, they could miss out on the opportunity.
While investor concern has definitely emerged, Craig-Hallum analyst Francois Brisebois is still very much on board. Fears among investors have been driven by the company’s announcement that the AdCom vote for its Posimir drug’s Class 2 New Drug Application (NDA) resubmission was split right down the middle.
As a result, Brisebois doesn’t assign any value to the drug in the model. Rather, he highlights its DUR-928 candidate for primary alcoholic hepatitis as DRRX’s primary value driver, calling early efficacy and safety data incredibly encouraging. On top of this, the analyst argues that the combination of the current poor standard of care and the $3 billion total addressable market played into his conclusion that investors should buy on any weakness.
With this in mind, Brisebois kicked off his DRRX coverage by issuing a “buy” rating. In addition, he set a Street high price target of $6, implying a staggering 183% upside potential.
Meanwhile, the rest of the Street also likes what it’s seeing. A “strong buy” consensus rating breaks down into three “buys” and a single “hold.” While less aggressive than that of Brisebois, the $4.65 average price target still puts the potential twelve month gain at 119%. See the DRRX stock analysis.
Carrols Restaurant Group (TAST)
While the name Carrols Restaurant Group (NASDAQ:TAST) might not ring any bells, but you’ve probably heard of its restaurants Burger King and Popeyes. It is true that shares took a pretty substantial hit following its preliminary fourth quarter results. Now at just $4.80 apiece, Deutsche Bank’s Brian Mullan is still in the restaurant company’s corner.
The negative reaction came largely as a result of Burger King’s same store sales (SSS) results. At 2%, the figure falls well below the implied guidance’s range of 4% to 5% range and reflects a deceleration in November and December.
However, Mullan tells investors that there’s a silver lining. Management noted that the focus will shift towards managing both net leverage levels and free cash flow. “While management wasn’t explicit with its plans, reading the tea leaves our sense is that these comments could pertain to either: 1) a reduced pace of acquisitions for the foreseeable future, 2) a potential slowdown in new unit development, or 3) all of the above,” he explained.
This combined with the new CFO appointment implies that the plans for the above are “… fluid and evolving. We think the key takeaway here is that management is mindful of the market’s perception of TAST’s net leverage levels, and that it has several options at its disposal to address this, should it see fit,” Mullan added.
Taking all of this into consideration, the analyst left his “buy” rating and $8 price target as is. This means that shares could potentially surge 67% in the next twelve months.
Judging by the consensus breakdown, the rest of the Street is in agreement. With only “buy” ratings assigned in the last three months, the message is clear: TAST is a “strong buy.” It also doesn’t hurt that the $8.83 average price target suggests 84% upside potential. See the TAST stock analysis.
VBI Vaccines (VBIV)
VBI Vaccines’ (NASDAQ:VBIV) claim to fame is its Sci-B-Vac product, which was the first vaccine to be commercially-approved for hepatitis B. The vaccine is currently available in Israel and ten other countries. It recently completed its Phase 3 program in the U.S., Europe and Canada. After new data was released earlier this month, analysts have been impressed, to say the least.
On Jan. 9, the company, which goes for $1.46 a share, announced that Sci-B-Vac had met both its primary and secondary endpoints in the second Pivotal Phase 3 CONSTANT study. Both management and investors were excited by the results as they demonstrate that the candidate is both safe and highly-potent.
While this outcome is encouraging, VBIV’s potential extends beyond Sci-B-Vac. BMO Capital analyst Do Kim highlights its VBI-1901 and VBI-2601 candidates as potentially driving significant upside. According to the analyst, updated Phase 1/2a tumor response and survival data for VBI-1901’s use in glioblastoma multiforme (GMB) is slated for release some time in the first half of 2020. Should the results be favorable, VBIV could develop a modified version to target other EBV+ cancers. On top of this, VBI-2601 proof-of-concept for use in chronic hepatitis B infection (HBV) is expected in the second half of the year.
“We believe the initial data could be meaningful for VBI’s vaccine approach for a functional HBV cure, with the potential for combining beyond antivirals, including Brii’s VIR-2218 and other HBsA RNAi. With an estimated 257 million chronically infected patients worldwide, we believe HBV represents a significant market opportunity for a functional cure,” Kim commented.
Based on everything the healthcare name has going for it, Kim reiterated his “outperform” rating and $5 price target, indicating 242% upside potential.
Out of three total analysts that have thrown their hat in with a review, 100% sided with the bulls, making the consensus rating a “strong buy.” See the VBIV stock analysis.
TipRanks offers investors the latest insight into eight different sectors by tracking the activity of over 5,000 Wall Street analysts. As of this writing, Maya Sasson did not hold a position in any of the aforementioned securities.