This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Stocks Under $5 That Could Soar

Stocks in this article: MGI DENN CAMT JSDA HERO

This one is a purely speculative play. High risk, high reward.

Hercules Offshore

Are the riots and demonstrations in the Middle East frightening you? They should be if you care about your quality of life that is so dependent on Middle East oil. From an investing standpoint, the turmoil puts a spotlight on the sector and demonstrates once again why crude should be part of your portfolio.

With the increase in oil prices over the last decade, there are very few stocks trading for less than $5 to exploit. One possibility is Hercules Offshore (HERO). The oil spill in the Gulf of Mexico last summer nearly killed this company.

Shares of Hercules fell to nearly $2 per share in the wake of the disaster, but the collapse was shortsighted. Eventually the oil spill in the Gulf was contained. Longer-term there simply is no choice but to drill offshore, spill risk or not.

Now, with oil crossing $100 per barrel, drilling in the Gulf is fait accompli. That bodes well for Hercules, a company on track to lose 55 cents per share in 2010 and expected to lose the same in 2011.

I think those numbers are a bit too pessimistic. I think a near-breakeven year in 2011 is possible, especially with oil prices where they are today. If anything, oil prices are going higher, irrespective of the turmoil in the Middle East. A growing economy is creating demand that simply outpaces supply.

Keep in mind that Hercules was a $35 stock during peak oil in mid-2008. Of course, that was before the stuff hit the fan. Long-term we are heading back to peak oil prices. I can see Hercules doubling as a result.

To see these stocks in action, check out the 5 Stocks Under $5 portfolio.

RELATED LINKS:



Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Jamie Dlugosch is a founder and contributor to MainStreet Investor and MainStreet Accredited Investor. Formerly, he was president and CEO of Al Frank Asset Management. He has contributed editorially to The Rational Investor, The Prudent Speculator, Penny Stock Winners and InvestorPlace Media.

4 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link 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

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
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!

Markets

DOW 17,959.44 +154.64 0.87%
S&P 500 2,078.54 +7.89 0.38%
NASDAQ 4,781.4240 +16.0440 0.34%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs