Editor's note: This Stocks Under $10 alert was originally sent to subscribers April 25 at 2:01 p.m. EDT. It's being republished as a bonus for TheStreet.com and RealMoney.com readers.
In looking for attractive stocks in the under $10 sector, we've found a number of candidates in the software industry. One of these is Novell ( NOVL), a provider of proprietary software that is a potential turnaround story for risk-averse investors. In our Stocks Under $10 model portfolio, we already have one pure-play software name and another with exposure to the shift toward the Linux-operating system, so we are not adding Novell to the model portfolio. However, a number of drivers lead us to believe that shares of Novell are an attractive investment in 2007, though not in the top 15 to 20 stocks that make up our portfolio. The company has done a great job revitalizing its prospects by focusing on customers' shift toward open-source software such as Linux. And even though it's unlikely Novell will ever reach the size and scope of software giants like Microsoft ( MSFT) and Oracle ( ORCL), that doesn't mean investors can't make money betting on the underdog.