Price is sometimes seen as an indicator of quality in equity markets. After all, if a company has excellent prospects, investors will flock to its shares, bidding them up. That's why corporations with relatively low per-share prices are often considered less secure and riskier investments.
Even so, there are exciting stocks that can be had for less than $15 per share and that could deliver solid returns to patient investors who can handle some risk and volatility. For two examples, consider Editas Medicine (EDIT -2.02%) and Snap (SNAP -2.72%).
1. Editas Medicine
Editas Medicine is a biotech company that focuses on gene-editing therapies. Like many of its peers in this niche, Editas Medicine currently has no approved products and isn't profitable. Also, one of its candidates encountered problems in clinical trials last year.
Editas is developing EDIT-301 as a potential treatment for Leber congenital amaurosis 10 (LCA10), a rare eye disease. Interim data from a clinical trial the company shared last year revealed that EDIT-101 is likely to be effective for only about 300 patients in the U.S. A patient population that small makes it difficult for a small biotech to justify developing the treatment. So Editas Medicine decided to pause enrollment in this trial while it tries to find a partner with more funds to develop EDIT-101.
Still, there are things to like about Editas Medicine. The company is working on another gene-editing treatment called EDIT-301 that targets sickle cell disease and beta-thalassemia, two rare blood diseases. It's an area with opportunity and also some competition. The company announced it would start dosing patients with those conditions in phase 1/2 studies for the potential therapy this year.
Editas has also sought to develop a new proprietary gene-editing method called SLEEK, which it says could help discover medicines for various difficult-to-treat diseases. Editas Medicine recently announced it would license the rights to use its SLEEK technology, along with several pipeline candidates, to Shoreline Biosciences, a privately owned biotech, for an undisclosed upfront price and future potential milestone payments.
That is perhaps the best reason to consider Editas Medical: the company's innovative capabilities. While the biotech has encountered headwinds, at a price of about $7.50 and a market capitalization of just $463 million, there could be substantial returns for investors who get in now, provided the company's programs make solid progress.
But be advised that Editas Medicine remains somewhat risky. Invest accordingly.
2. Snap
Social media company Snap fell prey to economic challenges and reduced ad spending last year. Its financial results worsened, and its share price dropped. But trading at just over $10 per share now, this tech company could deliver handsome gains to shareholders down the road as it has created a popular brand and platform that hundreds of millions of people use daily.
The company ended 2022 with 375 million daily active users (DAUs), a 17% year-over-year increase. What's more, users are spending more and more time on the Snapchat platform. For instance, during the fourth quarter, the total time people spent on Snapchat's Spotlight (where users can share and view short-form videos) more than doubled.
Snap's revenue should grow faster once advertising sales recover. The company's massive user base is attractive to businesses, particularly those targeting younger customers. Snap is especially popular with people aged 13 to 35. The company reaches more than 70% of people in this age group in 12 countries that represent over half of digital ad spending.
However, Snapchat is less popular with other age groups, and its worldwide penetration remains relatively low. But that should change over time as people who were born and grew up in the age of social media come to represent a larger and larger percentage of the world's population. Snap has an enormous long-term opportunity to continue facilitating targeted and highly cost-effective digital ads.
To reach profitability -- a goal it has yet to achieve -- the social media specialist has also sought other ways to generate money, most notably with Snapchat+, a premium subscription version of the app with more than 2 million users. Lastly, Snap is also a leading company in the augmented reality space, and that market is growing steadily. Snap's stock is now far below its all-time high of close to $80 in 2021, but patient investors could see shares reach and exceed that price.
