While most of Wall Street focuses on large-cap and mega-cap stocks, as they provide a degree of safety and liquidity, many investors are limited in the number of shares they can buy. Many of the biggest public companies, especially the technology giants, trade in the hundreds, all the way up to over $1,000 per share or more. At those steep prices, it is difficult to get any decent share count leverage.
Many investors, especially more aggressive traders, look at lower-priced stocks as a way not only to make some good money but to get a higher share count. That can really help the decision-making process, especially when you are on to a winner, as you can always sell half and keep half.
Skeptics of low-priced shares should remember that at one point Amazon, Apple and Netflix traded in the single digits. One stock we featured over the years, Zynga, was purchased by Take-Two Interactive. Cogent Biosciences, which we featured last March, has tripled since then.
We screened our 24/7 Wall St. research database looking for smaller cap companies that could offer patient investors some huge returns for 2023 and beyond. While these five stocks are rated Buy and have a ton of Wall Street coverage, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Lulu’s Fashion Lounge
This small-cap online retailer blew out the fourth quarter but has backed up big as concerns over consumer spending grow. Lulu’s Fashion Lounge Holdings Inc. (NASDAQ: LVLU) is a retailer of women’s apparel targeting millennial and Gen Z customers. It specializes in occasion dresses but also offers broader categories, including formal, bridal, lounge, vacation and basics.
The company remains focused on growing its market base and has an analytics-driven inventory control that keeps the products being offered fresh. The stock has been eviscerated as the spiraling inflation numbers have hurt many retailers, but Lulu’s Fashion Lounge is solidly profitable and looks to grow revenue and earnings this year.
Goldman Sachs has set a $4.30 price target on Lulu’s Fashion Lounge stock. Analysts have a consensus target of $4.64, and the stock traded on Friday at $2.45.
Started by Silicon Valley legend Peter Thiel, this company may offer the largest upside potential of all the stocks in this group, and it is also a takeover candidate. Palantir Technologies Inc. (NYSE: PLTR) builds and deploys software platforms for the intelligence community in the United States to assist in counterterrorism investigations and operations.
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