This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Under $5 Stocks That May Be Headed Lower

BOSTON ( TheStreet) -- Stocks that trade for less than $5, because of increased volatility, can be a boon or a bust.

For some lucky investors, their penny-stock pick may double. For others, only one day of losses can erase a year's worth of gains.

Stocks trading under $5 present potential buyers and sellers with a unique problem. Most investment funds are forbidden from buying cheap stocks. In addition, investment research is hard to come by.

Uncovering under-$5 stock candidates that have a huge downside potential can help investors navigate the penny-stock minefield. To find those companies, TheStreet sought out $5 stocks that have the most to lose based on analysts' share-price targets. Each stock trades on the Nasdaq or New York Stock Exchange and is covered by more than one analyst.

5. Great Atlantic & Pacific Tea (GAP) shares plunged in late July after the supermarket chain posted a first-quarter loss of $4.60 a share, much wider than analysts had forecast. The food retailer also said Sam Martin would become the second person named to the CEO post in 2010, replacing Ron Marshall. Great A&P said its turnaround strategy will work to create revenue and cut costs, but it will look to capital-raising activities, which may include the sale of assets.

Share Price: $3.82 (Aug. 6 close)

Average Price Target: $2.25, based on four analyst price targets of $2, $3, $1 and $3.

Loss Potential: 41.1%

2010 Performance: -67.6%

Analysts' View: Great A&P is the most widely followed of the five stocks on this list, with eight analysts covering the stock. Of those, only one recommends that investors buy the shares, while four suggest holding the stock and another three say investors should sell.

1 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
CACB $5.04 0.00%
GTXI $0.77 0.00%
AAPL $130.28 0.00%
FB $81.53 0.00%
GOOG $565.06 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs