2021 has been a fantabulous year for stock investors, with the S&P 500 returning 25% year to date. But here’s the bad news: all good things must come to an end, and the clock’s ticking down to the end of 2021.
But here’s the good news, too: 2022 might also be not too shabby a year for stocks. Most of Wall Street’s pros believe we’ll see between 8% and 12% growth going forward. That’s a sound return, and in line with the market’s long-term overall gains. What investors need to do now is optimize their portfolios to maximize the profits.
Perhaps the best place to find high returns, the sort of returns that see a portfolio double in value, is in the low-cost stocks. While attention-grabbers like Amazon or Apple get the headlines (and for good reason), some truly impressive returns can be found among stocks in the ‘under $10’ price category.
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.
Indeed, some of Wall Street’s top analysts have been pointing out that there are plenty of low-priced equities with the potential to double or better in the coming year. We’ve used the TipRanks database to pull up the details on three of these picks – Strong Buy stocks, under $10, with upside potential that starts at 120% and works its way up. Let’s take a closer look.
Amyris, Inc. (AMRS)
First on our list is a biotech company in the renewable chemical niche. Amyris develops synthetic chemicals used as replacement for common products derived from petroleum, plants, or animals, with the aim of cutting back on pollutants, waste materials, and potential harm to endangered species, while promoting a sustainable future and meeting product demand in a world of limited supply. The company operates three divisions, focusing on food flavoring, cosmetics, and health & wellness products, which are marketed through an array of wholly owned brands.
Shares in Amyris were holding steady near $15 for much of this year – before tanking earlier this month. The fall in share price came after a disappointing Q3 earnings release. Expectations on the Street leaned toward a breakeven on EPS based on approximately $80 million in revenue – but the company reported an EPS loss of 27 cents on total revenues of just $47.9 million. The stock is down 47% since then.
Amyris reported effective management of COVID issues during the quarter, but supply chain problems negatively impacted the company’s production and distribution. Although this may be more of a problem going forward as Amyris states that, heading into the holiday season, 90% of its projected product demand is already in the distribution centers. The company reported increased shipping-related expenses, both in port storage and in expedited air shipping to bypass the bottlenecks.
On a positive note, the company reported several new brand launches in Q3, and notes that its total brand count has increased from 3 in 2019, pre-COVID, to 8 now.
Despite recent setbacks, H.C. Wainwright’s 5-star analyst Amit Dayal takes a generally positive outlook on Amyris.
“We believe the company’s consumer and ingredients businesses have support for growth and margin improvements from new brand launches [and] continued strength in legacy brands… Management is now guiding for 4Q21 revenues of roughly $70-80M. Achieving or exceeding this target, with an outlook where supply chain issues have been largely resolved should provide investors with more confidence to enter the story,” Dayal opined.
In line with his optimistic approach, Dayal stays with the bulls. The analyst rates AMRS a Buy along with a $30 price target. This target puts the upside potential at a whopping 348%. (To watch Dayal’s track record, click here)
As for the rest of the Street, the bulls have it. AMRS’s Strong Buy consensus rating is unanimous based on 3 recent positive reviews. The shares are priced at $6.71 and their $21.33 average price target suggests a robust upside of ~219% in the year ahead. (See AMRS stock analysis on TipRanks)
Akoustis Technologies (AKTS)
Next up is Akoustis Technologies, a tech company working with single-crystal piezoelectric materials, an important component of the bulk acoustic wave (BAW) filters found in mobile devices such as smartphones and tablets. The company uses a proprietary manufacturing process to produce its BAW RF filters, and achieves superior performance with high purity materials for a wide filter bandwidth.
Akoustis has reported some positive developments in recent weeks. On November 1, the company reported adding a new mobile customer in the Asian market, and has signed a statement of work for development of an XBAW filter in the 4G/5G band. The company expects to deliver samples in 1H22, with full production by the end of CY22. This is Akoustis’ third active XBAW mobile customer account.
Also this month, Akoustis reported a new win for its patented wifi 6E XBAW filters. The company reported that an OEM has picked up the new filters for use in a carrier-grade wifi 6E gateway platform. This is just one more indication of Akoustis’ growing product demand, and by year’s end the company plans to increase production at its New York fabrication plant to 500 million filters annually.
Finally, Akoustis recently reported its fiscal 1Q22 results, for the quarter ending September 30. The company showed $1.9 million in top line revenue, up 290% year-over-year, despite headwinds from the supply chain crunch, and $75.7 million in available liquid assets. Despite these positive markers, Akoustis’ stock is down this year, having fallen 62% from its February peak.
Covering Akoustis for Roth Capital, 5-star analyst Suji Desilva believes the stock is currently undervalued, and he explains: “We regard AKTS as an emerging vendor of RF filters for the smartphone, WiFi, infrastructure and mobile markets. In the quarter, AKTS sustained its $2+m per quarter revenue level despite near-term growth impact from supply constraints. We believe that guidance for very strong sequential growth demonstrates the strong WiFi customer ramp is ahead for the company.”
“Looking further ahead, we believe AKTS has solid incremental opportunity with its mobile segment where the company announced a third customer opportunity. We are also encouraged by diversification to the notebook end market as well as product diversification into timing, boosted by the recent RFMi acquisition,” the analyst added.
In line with these comments, Desilva rates AKTS a Buy, and his $16 price target suggests a one-year upside potential of ~129%. (To watch Desilva’s track record, click here)
Judging by the consensus breakdown, the analyst community is on the same page. Given that 3 Buys have been issued in the last three months compared to no Holds or Sells, the message is clear: AKTS is a Strong Buy. The stock’s current trading price is $6.97 and its average price target of $15.67 implies a 124% upside from that level. (See AKTS stock analysis on TipRanks)
Let’s wrap up with a chemical tech company. Gevo operates in the renewable chemical and advanced biofuel niches, working on new products to facilitate a move away from traditional chemical fuels, especially fossil fuels. The company’s products include renewable gasoline and diesel, along with sustainable aviation fuel, renewable natural gas, and even animal feeds and protein. Gevo is turning away from ethanol production, and is aiming toward the development of carbon-neutral fuels.
Gevo is working on the production of energy-dense liquid hydrocarbons derived from sustainable, renewable corn crops. Understanding that the process of fuel production is as important in carbon neutrality as the fuel itself, Gevo is developing wind turbines to provide electricity in its manufacturing facilities.
In recent months, Gevo has made several business moves toward these goals. The company recently entered a purchase agreement with Butamax Advanced Biofuels for the acquisition of several patents in isobutanol-related technologies, including isooctane, industrial chemicals, isobutylene, oligomerized isobutylene, and para-xylene. Gevo has previously invested in the development of these technologies, and they are central to its alt fuel research program.
On another front, Gevo is working on the creation of renewable natural gas (RNG) from dairy cow manure. This project fits with the company’s overall goal – renewable fuel, generated sustainably, with reduction in greenhouse gas emissions. 7 billion tons of carbon emissions are generated annually through food production, and Gevo aims to tap into that with its RNG program.
The company finished 3Q21 with $522.4 million in cash on hand. Revenue was minimal, only $100,000, as the company has – for now – shifted from production to research as it positions itself to enter new renewable fuel niches. Gevo terminated its ethanol and distiller grain production in March of last year, and has since been working on the development of isobutanol products.
H.C Wainwright’s Amit Dayal sees this company in a speculative stage for now, but with solid prospects for the mid-term.
“We believe GEVO is differentiating itself with respect to green hydrocarbon production with a significant emphasis on decarbonization. Though these efforts may add some extra costs to the planned projects, we believe the returns from selling higher margin low carbon intensity offerings should make these investments worthwhile. We believe interest in renewable fuels continues to grow, supported by regulatory mandates, positioning the company to move from Memoranda of Understanding (MoUs) to definitive agreements with customers and partners,” Dayal noted
What’s it all mean for GEVO? Dayal puts a Buy rating on the stock, and his $18 price target implies room for 201% upside in the year ahead. (To watch Dayal’s track record, click here)
Gevo’s most recent reviews – 3 in all – are all positive, giving the stock its Strong Buy consensus rating. The average price target of $14.67 indicates a potential for 146% upside form the current trading price of $5.96. (See GEVO stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.