TipRanks
3 Penny Stocks Under $5 With Massive Upside Ahead
Investors know that the key to profits is in the return – and that means, a willingness to shoulder risk. Risk is relative, of course, and tends to run hand-in-hand with the return potential. Find a stock with a giant return potential, and chances are, you’ve also found one with a higher risk profile. The highest returns usually come along with the lowest share prices. After all, when a stock is priced for just pennies, even a small gain in share price translates into a huge return. Which means that penny stocks – these days, usually seen as those equities priced under $5 – combine a perfect storm of market attractions: low share price, high return potential, and higher than usual risk. Using the TipRanks database, we’ve pulled up details on three compelling stocks that fit this profile of low share price and huge upside potential, 100% or more, according to Wall Street analysts. Cinedigm Corporation (CIDM)We’ll start with Cinedigm, the LA-based entertainment company specializing in content marketing and distribution along with digital cinema. Cinedigm is an independent studio for film, TV, and digital production. The company distributes digital media across a variety of content networks.Back in June, CIDM shares showed a sharp spike when the company announced its partnership with Vewd, the world’s largest OTT software provider for Smart TVs, a growing segment of the digital viewing world. Customers are shifting away from cable TV and more and more toward streaming. A working relationship with a Smart TV software company would give Cinedigm access to Vewd’s installed customer base – more than 300 million Smart TV sets. Revenues in 2020 have been fairly stable. For Q1, Q2, and Q3, the top line came in at $7.74 million, $6.02 million, and $7.18 million. The Q3 number holds the middle spot in that range. Earnings, however, missed expectations. At a 23-cent per share loss, the EPS came in 17-cents below expectations. On a positive note, CIDM reported a year-over-year sales increase in its core business of ad-based video on demand of 27%.Covering the stock for Benchmark, 5-star analyst Daniel Kurnos points out a few reasons why he thinks Cinedigm “is becoming a much more intriguing investment proposition, particularly at these levels: 1) Organic growth is still building, with the legacy channel lineup strategy on pace to achieve the 30 channel milestone 12 months ahead of schedule; 2) A new highly accretive, streaming roll-up strategy is emerging that Cinedigm is in the best position to execute with minimal competition; 3) No credence or value is being given any more to Cinedigm’s digital projector inventory or Starrise stake, both of which should ultimately benefit in a post-COVID world.”In line with his bullish stance, Kurnos rates CIDM a Buy, and his $3.50 price target…
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