Quepasa Corporation (QPSA), MetroPCS Communications Inc. (PCS), and FX Energy Inc. (FXEN) are three promising analyst stock picks trading under $10 per share. In this article, we’ll take a look at these three stocks and the catalysts that are likely driving the analyst moves.
QuePasa Positions Itself for Growth
Quepasa Corporation, operator of Quepasa.com, a social networking and gaming platform focused on the Latin community, was initiated with a Buy rating and $5.50 per share price target by Morgan Joseph. At a significant 60% premium to the current market price, the analyst’s price target reflects a very bullish outlook on the company’s future.
The company’s stock is trading down nearly 20% over the past month after it announced an equity offering that sparked some concerns among investors. And while the site grew in popularity throughout 2010, Alexa shows that its traffic has declined in 2011. But insiders have been buying up this stock and its new games and acquisitions could help shore up its userbase over the coming quarters.
MetroPCS: Not as Bad as It Sounds
MetroPCS Communications Inc., a wireless telecommunications provider in the U.S. with wireless broadband service, was initiated with a Buy rating and $12.00 per share price target by BTIG. At a significant 37% premium to the current market price, the analyst’s price target reflects a very bullish outlook on the company’s future.
The company’s stock is trading down nearly 15% over the past month amid concerns of the FTC’s new internet rules set to take effect on November 20, 2011. But the stock trades at less than 14x its trailing 12-month earnings and has posted consistent revenue growth since 2002. Moreover, the FTC will likely face lawsuits challenging the rule, and even if it holds, the firm is better positioned than its competitors.
FX Energy Appears to Be Undervalued
FX Energy Inc., an independent oil and gas exploration and production company, was initiated with a Buy rating and $9.25 per share price target by Brean Murray. At a significant 127% premium to the current market price, the analyst’s price target reflects a very bullish outlook on the company’s future.
Over the past month, the stock has slipped more than 25% and now trades with a price-earnings multiple of just 6.1x its trailing 12-month figures. Meanwhile, the company’s solid reserves and production base in Poland – which has production sold for higher cash margins – has helped accelerate its drilling program in both domestic and abroad.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.