Top 10 'Buy'-Rated Stocks Under $5

BOSTON (TheStreet) --Stocks trading under $5 typically have no analysts' coverage -- never mind a "buy" rating -- leaving investors to do the homework for themselves. However, a select few boast of favorable coverage from analysts, which can direct share-price movements. The following 10 U.S. stocks trade at less than $5 and have garnered the most "buy" ratings from analysts. 10. Sirius XM SIRI Company Profile: Sirius XM broadcasts music, sports, news, talk, entertainment, traffic and weather channels in the U.S. for a subscription fee through its proprietary satellite radio systems. So-called shock jock Howard Stern is a radio personality on Sirius. Share Price: $1.05 (Sept. 8) 2010 Stock Performance: 75% Analyst Consensus: Sirius XM ranks in the top 10 with eight analyst "buy" ratings. Another three say investors should hold the stock. No research firm has a "sell" rating on Sirius XM. The average of seven recent stock-price targets is $1.29, which is 23% above where the stock currently trades. Bullish Case: Miller Tabak analyst David Joyce reiterated his "buy" rating on Sirius XM in a Sept. 3 research note, saying subscriber-acquisitions costs (SAC) per gross addition of $65 "should continue to trend down, due to less expensive consumer-electronics equipment over time." Joyce has a short-term price target of $1.25 and a long-term price target of $1.45. 9. Magnum Hunter Resources MHR Company Profile: Magnum Hunter is an independent oil and gas company engaged in the acquisition, drilling and production of energy. Share Price: $3.86 (Sept. 8) 2010 Stock Performance: 149% Analyst Consensus: Like Sirius XM, Magnum Hunter is rated "buy" by eight research firms and "hold" by three. The average of seven recent stock-price targets is $5.72, which is 48% above where the stock currently trades. Bullish Case: In an Aug. 26 research note, McNicoll Lewis Vlak analyst Kim Pacanovsky wrote that Magnum Hunters' "oil focus (with the ability to turn on the gas switch if gas prices improve) gives MHR an advantage over gassier peers." Pacanovsky rates Magnum Hunter a "buy" with a price target of $6. 8. Ariad Pharmaceuticals ARIA Company Profile: Ariad is active in the discovery and development of breakthrough medicines to treat cancers by regulating cell signaling with small molecules. Share Price: $3.52 (Sept. 8) 2010 Stock Performance: 54% Analyst Consensus: Nine of the 10 analysts covering Ariad recommend that investors buy the stock. The other research firm has a "hold" rating. The average of three recent stock-price targets is $6, which is 70% above where the stock trades now. Bullish Case: Leerink Swann analyst Howard Liang has an "outperform" rating, an equivalent of a "buy," and a $6 price target on Ariad. In an Aug. 5 research note, Liang said Ariad's stable finances provide a runway for pipeline advances, adding that a partnership with Merck MRK may produce significant royalties. To read the rest, head over to TheStreet.com