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Stocks have struggled for direction over the past few months, and that presents a certain amount of risk to investors right now. But those willing to meet that risk have watched valuations shrink and per-share price tags diminish, which could mean new buying opportunities for those with specific strategies.
Here at Zacks, we don’t generally classify stocks as “cheap” or “expensive”, and rather than looking at the stock’s face value, we have a system that puts an emphasis on earnings estimate revisions to find stocks that will hopefully be winners for investors.
That being said, low-priced stocks can be attractive to smaller investors that can’t necessarily afford large stakes in companies with higher priced stocks. When looking at these low-priced stocks, we can look at the same trends in growth, value, and momentum and apply the Zacks Rank to properly analyze the potential that these companies have.
Today we’ve highlighted ten stocks that are currently trading for under $20 per share. These stocks currently have seen positive earnings estimate revisions, and a variety of other factors make these companies stand out as having strong upside potential.
Ericsson is a world-leading supplier in the telecommunications and data communications industries, offering advanced solutions for mobile and fixed networks, as well as consumer products. ERIC sports a Zacks Rank #2 (Buy) and an “A” grade for Growth. Trading has been choppy since its strong beat in the latest quarter, but the earnings trend is moving in the right direction ahead of its next report later this month. That positive change in the outlook, paired with triple-digit percentage expected growth, should be a positive.
Canadian Solar is a solar module producer. The company makes wafers, cells, portable home systems, battery chargers, and many other solar products. CSIQ has a #1 (Strong Buy) as well as an “A” grade for Value and a “B” grade for Growth. The stock has surged 15% in the past five days but is still trading at just 9x earnings. CSIQ also has long-term projected earnings growth rate of 32%, with earnings growth expected to reach nearly 57% in the current fiscal year. Investors should also that the “Solar” industry is currently in the top 11% of the Zacks Industry Rank.
3. On Deck Capital, Inc.
Prior Close: $6.05
On Deck Capital provides an online platform that uses big data and analytics to source, underwrite, and fund loans to small businesses. The firm provides capital to dentists, restaurants, medical practices, and online companies. ONDK is a #1 (Strong Buy) with interesting Value and Growth characteristics. Shares are trading at just 11x earnings, but EPS growth rates have been staggering recently. Full-year estimates have ONDK’s bottom line surging from just a penny last year to $0.54 in 2018. Revenue growth is expected to be around 13% in the current and next year. Its P/S ratio, a key metric for smaller tech firms, is 1.2, which is a discount to the industry’s average of 1.7.
4. AU Optronics Corp.
Prior Close: $3.93
AU Optronics is one of the world’s largest makers of LCD panels used for computers, monitors, TVs, cameras, and more. It hasn’t been the best 52-week run for AUO, but the stock’s October looks unlikely to break now that it’s sporting a Zacks Rank #1 (Strong Buy). Earnings estimates have improved significantly over the past few months, and that’s a great sign for investors looking to get in on the cheap.
Altice USA is a spin-off of Netherlands-based Altice NV. The company provides cable TV services in 21 states. ATUS has had just over a year on U.S. exchanges but is looking attractive to our models. It currently has a Zacks Rank #1 (Strong Buy) as well as “A” grades in our Value and Growth categories. Shares have rallied over 12% in the past two weeks, but the valuation is still in check. For instance, ATUS has a reasonable P/S of just 1.3. It also has a beta of 0.7, making it another rare low-price, low-volatility option.
BlackBerry is best known to the public for its once-iconic brand of smartphones, but the company ditched hardware manufacturing recently and now serves as an enterprise software and services company. This transition is finally getting the attention of analysts, and positive earnings estimates have earned the stock a Zacks Rank #1 (Strong Buy). The company has also managed to surpass EPS estimates in 12 consecutive quarters. Still, this is one for the long haul, with earnings expected to expand at an annualized rate of nearly 19% over the next three to five years.
Black Stone Minerals is a Houston-based oil and natural gas company. Sure, there’s been plenty of pressure on the energy industry lately because of falling prices. But oil does seem to have leveled off, and analysts haven’t flipped the script on BSM just yet. It has a Zacks Rank #1 (Strong Buy) and has witnessed three positive EPS estimate revisions in the past 60 days. Earnings are expected to grow by 41% in fiscal 2019 on revenue growth of 7.6%. That’s good enough to bring the stock to an “A” grade for Growth in our Style Scores system.
Exelixis is a biopharmaceutical company committed to developing small molecule therapies for the treatment of cancer. We’re cheating a bit here, as this is just above the $20 threshold, but there’s just too much to like. It’s best known as the producer of Cometriq, an FDA-approved treatment for medullary thyroid cancer. EXEL is a #1 (Strong Buy) with consistent profitability and a remarkable earnings surprise record, having not missed EPS estimates since mid-2016. The bottom and top line are still growing here, and the company is looking to boost that growth through clinical activity of Cometriq to treat other types of cancer.
9. Rent-A-Center, Inc.
Prior Close: $16.11
Rent-A-Center is a leader in the rent-to-own retail segment. The company just exited a proposed merger deal, and after a brief pullback from the deal price, the stock has actually surged higher. Now, with its #1 (Strong Buy) rank, RCII looks to move even higher. But even with this momentum, the stock looks cheap. For instance, RCII has a P/E ratio of just 10.0, which is a discount to the industry’s 11.2 average. It looks like analysts and investors are in agreement that this retailer is better off without the deal, and that’s a great sign heading forward.
Xperi Corp. is a product and technology licensing company which manufactures semiconductors and related products. The stock was recently added to the #1 (Strong Buy) list and also looks undervalued at current price levels. Shares are trading at under 8x earnings, and the company has a P/B ratio of 1.7. That’s a nice discount to the industry average of 2.1. XPER is also a nice buy-and-hold option for dividend investors. The company offers a consistent annualized $0.80 per share payout, which comes out to a yield of 4.3% right now.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Top 10 Stocks Under $20
Stocks have struggled for direction over the past few months, and that presents a certain amount of risk to investors right now. But those willing to meet that risk have watched valuations shrink and per-share price tags diminish, which could mean new buying opportunities for those with specific strategies.
Here at Zacks, we don’t generally classify stocks as “cheap” or “expensive”, and rather than looking at the stock’s face value, we have a system that puts an emphasis on earnings estimate revisions to find stocks that will hopefully be winners for investors.
That being said, low-priced stocks can be attractive to smaller investors that can’t necessarily afford large stakes in companies with higher priced stocks. When looking at these low-priced stocks, we can look at the same trends in growth, value, and momentum and apply the Zacks Rank to properly analyze the potential that these companies have.
Today we’ve highlighted ten stocks that are currently trading for under $20 per share. These stocks currently have seen positive earnings estimate revisions, and a variety of other factors make these companies stand out as having strong upside potential.
1. Ericsson (ERIC - Free Report)
Prior Close: $8.69
Ericsson is a world-leading supplier in the telecommunications and data communications industries, offering advanced solutions for mobile and fixed networks, as well as consumer products. ERIC sports a Zacks Rank #2 (Buy) and an “A” grade for Growth. Trading has been choppy since its strong beat in the latest quarter, but the earnings trend is moving in the right direction ahead of its next report later this month. That positive change in the outlook, paired with triple-digit percentage expected growth, should be a positive.
2. Canadian Solar Inc. (CSIQ - Free Report)
Prior Close: $16.37
Canadian Solar is a solar module producer. The company makes wafers, cells, portable home systems, battery chargers, and many other solar products. CSIQ has a #1 (Strong Buy) as well as an “A” grade for Value and a “B” grade for Growth. The stock has surged 15% in the past five days but is still trading at just 9x earnings. CSIQ also has long-term projected earnings growth rate of 32%, with earnings growth expected to reach nearly 57% in the current fiscal year. Investors should also that the “Solar” industry is currently in the top 11% of the Zacks Industry Rank.
3. On Deck Capital, Inc.
Prior Close: $6.05
On Deck Capital provides an online platform that uses big data and analytics to source, underwrite, and fund loans to small businesses. The firm provides capital to dentists, restaurants, medical practices, and online companies. ONDK is a #1 (Strong Buy) with interesting Value and Growth characteristics. Shares are trading at just 11x earnings, but EPS growth rates have been staggering recently. Full-year estimates have ONDK’s bottom line surging from just a penny last year to $0.54 in 2018. Revenue growth is expected to be around 13% in the current and next year. Its P/S ratio, a key metric for smaller tech firms, is 1.2, which is a discount to the industry’s average of 1.7.
4. AU Optronics Corp.
Prior Close: $3.93
AU Optronics is one of the world’s largest makers of LCD panels used for computers, monitors, TVs, cameras, and more. It hasn’t been the best 52-week run for AUO, but the stock’s October looks unlikely to break now that it’s sporting a Zacks Rank #1 (Strong Buy). Earnings estimates have improved significantly over the past few months, and that’s a great sign for investors looking to get in on the cheap.
5. Altice USA, Inc. (ATUS - Free Report)
Prior Close: $17.41
Altice USA is a spin-off of Netherlands-based Altice NV. The company provides cable TV services in 21 states. ATUS has had just over a year on U.S. exchanges but is looking attractive to our models. It currently has a Zacks Rank #1 (Strong Buy) as well as “A” grades in our Value and Growth categories. Shares have rallied over 12% in the past two weeks, but the valuation is still in check. For instance, ATUS has a reasonable P/S of just 1.3. It also has a beta of 0.7, making it another rare low-price, low-volatility option.
6. BlackBerry Limited (BB - Free Report)
Prior Close: $7.23
BlackBerry is best known to the public for its once-iconic brand of smartphones, but the company ditched hardware manufacturing recently and now serves as an enterprise software and services company. This transition is finally getting the attention of analysts, and positive earnings estimates have earned the stock a Zacks Rank #1 (Strong Buy). The company has also managed to surpass EPS estimates in 12 consecutive quarters. Still, this is one for the long haul, with earnings expected to expand at an annualized rate of nearly 19% over the next three to five years.
7. Black Stone Minerals, L.P. (BSM - Free Report)
Prior Close: $15.64
Black Stone Minerals is a Houston-based oil and natural gas company. Sure, there’s been plenty of pressure on the energy industry lately because of falling prices. But oil does seem to have leveled off, and analysts haven’t flipped the script on BSM just yet. It has a Zacks Rank #1 (Strong Buy) and has witnessed three positive EPS estimate revisions in the past 60 days. Earnings are expected to grow by 41% in fiscal 2019 on revenue growth of 7.6%. That’s good enough to bring the stock to an “A” grade for Growth in our Style Scores system.
8. Exelixis, Inc. (EXEL - Free Report)
Prior Close: $20.73
Exelixis is a biopharmaceutical company committed to developing small molecule therapies for the treatment of cancer. We’re cheating a bit here, as this is just above the $20 threshold, but there’s just too much to like. It’s best known as the producer of Cometriq, an FDA-approved treatment for medullary thyroid cancer. EXEL is a #1 (Strong Buy) with consistent profitability and a remarkable earnings surprise record, having not missed EPS estimates since mid-2016. The bottom and top line are still growing here, and the company is looking to boost that growth through clinical activity of Cometriq to treat other types of cancer.
9. Rent-A-Center, Inc.
Prior Close: $16.11
Rent-A-Center is a leader in the rent-to-own retail segment. The company just exited a proposed merger deal, and after a brief pullback from the deal price, the stock has actually surged higher. Now, with its #1 (Strong Buy) rank, RCII looks to move even higher. But even with this momentum, the stock looks cheap. For instance, RCII has a P/E ratio of just 10.0, which is a discount to the industry’s 11.2 average. It looks like analysts and investors are in agreement that this retailer is better off without the deal, and that’s a great sign heading forward.
10. Xperi Corp. (XPER - Free Report)
Prior Close: $19.57
Xperi Corp. is a product and technology licensing company which manufactures semiconductors and related products. The stock was recently added to the #1 (Strong Buy) list and also looks undervalued at current price levels. Shares are trading at under 8x earnings, and the company has a P/B ratio of 1.7. That’s a nice discount to the industry average of 2.1. XPER is also a nice buy-and-hold option for dividend investors. The company offers a consistent annualized $0.80 per share payout, which comes out to a yield of 4.3% right now.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>