Are Low-Priced Stocks the Key to High Returns?

Despite the general focus on large-cap and mega-cap stocks on Wall Street, due to their safety and liquidity, the high per share price of many large public companies, particularly tech giants, can limit the number of shares investors are able to buy. This has led some, particularly aggressive traders, to look at lower-priced stocks as an opportunity for substantial gains and increased share count.

An examination of past stock performance shows that companies like Amazon, Apple, and Netflix once traded in the single digits. Nvidia, a company that has experienced significant growth due to its AI semiconductor chips, traded for under $10 for several years. Zynga, a stock that has been featured over the years, was bought by Take-Two Interactive, while Cogent Biosciences, featured last March, has tripled in value since then.

A review of the 24/7 Wall St. research database revealed several smaller cap companies that could potentially yield significant returns for patient investors for the remainder of 2023 and beyond. It’s noted that while these five stocks have a lot of Wall Street coverage and are rated Buy, no single analyst report should be used as the sole basis for any buying or selling decision.

Azul, the largest airline in Brazil, is one of the companies that emerged from the pandemic as a top airline in Latin America. Besides providing scheduled air transportation services in Brazil, Azul is also involved in cargo transportation, loyalty programs, travel packages, funding, logistics solutions, and aircraft financing activities. Goldman Sachs recently upgraded the airline and named it its top pick in the region.

Bausch Health Companies, a well-known healthcare company, is another firm with sizable upside potential. The diversified pharmaceutical company, which develops, manufactures, and markets a range of products primarily in gastroenterology, hepatology, neurology, dermatology, international pharmaceuticals, and eye health, is expected to post $8.5 billion in revenue this year.

In the investment world, where Wall Street often focuses on large-cap and mega-cap stocks, lower-priced stocks can still offer substantial returns for patient investors. Companies like Azul and Bausch Health Companies demonstrate how smaller-cap stocks can lead to significant gains, proving that high share prices aren’t the only path to success in the stock market.