Stock markets seemed to edge up lately as the coronavirus pandemic slowed in the major epicenters. Analysts warn that recovery will be long and painful. Countries and economies have been paralyzed for several months now, and most of the restrictions are still in place.
However, investors laid off risk-off tactics. They are still cautious but willing to participate in the trading as the mad rush of sell-offs subsided. Still, amidst the global crisis, money is tight. That’s why the experts recommend buying penny stocks, which are cheaper and promise hefty gains if chosen correctly.
According to analysts, Orbcomm is such stock. This wireless messaging company has a network of 31 satellites along with ground-based infrastructure. And it also has great potential for immense profits.
Orbcomm has over 2 million billable subscribers, and its service is available in 130 countries. Its customers can communicate, monitor, control, and track linked mobile and fixed assets around the globe.
The company’s revenues showed a 5% growth year-by-year, even though they came in just under the forecast of $69.7 million. Orbcomm also reported a loss of 3 cents per share in the fourth quarter. However, this is actually a good result, as experts estimated the 5-cent loss by 40%.
The stock released its quarterly report just a week after the market’s collapse in February. It has lost 50% so far in 2020. Still, its underperformance in the markets hasn’t come as a surprise due to the pandemic crisis.
How much could investors gain through this stock?
Michael Latimore, Northland Securities’ analyst, set his price target at $6 per share for Orbcomm. Shareholders could gain 185% if the target is met. However, the stock’s average price target is $7.17, which suggests a massive 241% gaining potential from the current share price of $2.10.
Latimore is positive that Orbcom will rebound, as it has a solid foundation of parts and supplies. The company does most of its manufacturing in Mexico and Germany, and its current inventory can last four months.