Explosive Stocks Under $10 - Screen of the Week
18 December 2013 - 7:53AM
Zacks
This screen is a bit of a departure from my normal stock screens.
Usually I require my screens to have a minimum price of $10 per
share.
But I do at times scan for stocks under $10. And that's one of
the screens I'm running for myself right now.
Penny Stocks
One dollar is a common threshold when screening for stocks. A
lot of investors actively avoid penny stocks due to the speculative
nature, the often wide bid/ask spreads, and the excessive
volatility that is all too common in stocks under $1.00.
But some, of course, work out spectacularly well. And that's
probably what keeps people interested in them.
Seeing a stock make a 100% return or 200% return or more from a
base of 50 cents, for example, seems easier than investing in a $50
stock or $100 stock and seeing that double or triple.
$5 Stocks
Five dollars is another common minimum when screening for stocks
since many institutional investors won't even consider a stock if
it's trading under $5. And since institutional investors are
usually the ones that can move a stock; having stocks that are open
to them is usually a bonus.
And quite frankly, lots of cheap stocks are cheap for a reason,
i.e., that's all they're worth.
But being over $5 does put them into a different category of
consideration. Maybe not the best category, but a step up from
stocks less than a dollar.
Stocks Under $10
My minimum has typically been $10. With over 10,000 stocks out
there, this minimum quickly lets me cull down several thousand
stocks with a click of a button.
That doesn't mean there aren't any good stocks below that price
point, because there are.
And I can recall several sub-$10 stocks in the past that worked
out exceptionally well. Maybe it's because I use them sparingly. Or
maybe it's because I'm ultra picky in selecting them.
Either way, there can be a place for cheaper stocks in your
portfolio sometimes.
And that's what we're looking at today.
Screen Parameters
- Price less than or equal to $10
- Average Dollar Volume greater than or equal to
$1,000,000
(Price x volume shows you how much money is trading in and out of
the stock on a daily basis.)
- Weekly Volume greater than Previous Week's Volume (any two
out of three weeks)
(Want to see increasing volume to show greater investor interest
and demand.)
- Zacks Rank less than or equal to 3
(No Sells or Strong Sells.)
- Average Broker Rating less than or equal to 3.5
(Average Broker Rating of a Hold or Better.)
- # of Analysts in Rating greater than or equal to 2
(Minimum of at least two analysts covering the stock.)
- % Change F1 Earnings Estimate Revisions -- 12 Weeks greater
than or equal to 0
(Preferably upward earnings estimate revisions, but definitely no
downward revisions.)
Stocks
Here are 5 stocks that made it through this week's screen:
BALT Baltic Trading
BEE Strategic Hotels
HBAN Huntington Bancshares
SHOR ShoreTel
AFFX Affymetrix
I think each one of these picks has big potential. And the
entire list is worth a thorough analysis.
I would not suggest filling up an entire portfolio of stocks
under $10 though. But adding a careful selection of some of the
best cheap stock names could add some excess returns to your bottom
line, not to mention a little excitement to your stock picking
process as well.
Get the rest of the stocks on this list and start screening for
the best stocks under $10 for yourself. And don't forget to
backtest your strategy so you'll know how successful it's been
before you put any of your money at risk. You can do it.
Sign up for a free two week trial to the Research Wizard
today.
Disclosure: Officers, directors and/or employees of Zacks
Investment Research may own or have sold short securities and/or
hold long and/or short positions in options that are mentioned in
this material. An affiliated investment advisory firm may own or
have sold short securities and/or hold long and/or short positions
in options that are mentioned in this material.
Disclosure: Performance information for Zacks’ portfolios and
strategies are available at:
http://www.zacks.com/performance.
AFFYMETRIX INC (AFFX): Free Stock Analysis Report
BALTIC TRAD LTD (BALT): Free Stock Analysis Report
STRATEGIC HOTEL (BEE): Free Stock Analysis Report
HUNTINGTON BANC (HBAN): Free Stock Analysis Report
SHORETEL INC (SHOR): Free Stock Analysis Report
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