U.S. stocks jumped to start August, with big-tech continuing to showcase its strength. Zoom (ZM - Free Report) , Microsoft (MSFT - Free Report) , Apple (AAPL - Free Report) , and other familiar coronavirus standouts were some of Monday’s top gainers through morning trading.
The positivity came after Facebook (FB - Free Report) , Amazon (AMZN - Free Report) , and Apple all flexed their muscles last Thursday, proving once again that they are some of the best bets during the pandemic-induced downturn. Meanwhile, Wall Street was likely pleased to see that the U.S. reported its smallest daily increase in new Covid-19 cases in almost a month.
Alongside the slow return to something close to normal around the world, there are positive signs from factories. This helps investors look beyond the last week’s rough second quarter GDP data from the U.S. and Germany. And it’s always worth remembering that Wall Street knew things were going to be bad.
Plus, it’s always looking ahead, which might bode well for the continued market climb. With interest rates so low, the need to chase returns remains and don’t fight the Fed is a mantra that will likely be with us for some time.
That said, let’s start the month of August off by looking for stocks that offer growth during the economic uncertainty and are also cheap—trading under $10 per share.
Iamgold Corporation (IAG - Free Report)
Prior Close: $4.98 USD
Gold has surged amid all of the economic turmoil and Goldman Sachs recently raised its 12-month forecast from $2,000 an ounce to $2,300, citing concerns about the U.S. dollar’s role as the global reserve currency and more. Therefore, it might be a good idea for investors to add a gold play to their portfolios. Iamgold is a mid-tier mining firm with three gold mines on three continents, along with exploration projects. IAG shares have climbed 120% during the market’s comeback to crush the S&P 500’s 45% and its industry’s 85% average.
IAG has seen a bit of a pullback recently after the outsized run and it rests about 27% off its nearly $7 per share highs from 2017. Alongside its under $5 price tag, Iamgold trades at a discount to its highly-ranked industry in terms of forward 12-month sales. Looking ahead, our Zacks estimates call for IAG’s fiscal 2020 revenue to jump 11%, with FY21 expected to come in another 16% higher to reach $1.36 billion.
The gold miner’s bottom-line outlook appears even more impressive, with it expected to swing from an adjusted loss of -$0.04 a share last year to +$0.26 in FY20. IAG’s adjusted FY21 EPS figure is then expected to climb another 60% higher. Iamgold’s outlook is rather impressive, especially amid the current economic conditions. Iamgold is Zacks Rank #2 (Buy) that’s set to report its Q2 results after the closing bell on Wednesday, August 5.
Limelight Networks, Inc. (LLNW - Free Report)
Prior Close: $6.27 USD
Limelight provides digital content delivery, video, cloud security, and edge computing services. The Scottsdale, Arizona-based firm allows its customers to deliver streaming video and other digital content to “any device, anywhere.” Limelight’s offerings are geared toward industries from media and broadcasting to gaming, which makes it an attractive coronavirus play and possible longer-term investment. LLNW topped our Q2 earnings and revenue estimates on July 20, with revenue up 28%, while it swung from an adjusted loss to +$0.03 per share.
Limelight’s strong quarter helped executives raise the firm’s full-year sales guidance, which is no easy task at the moment. Our Zacks estimates now call for the company’s fiscal 2020 revenue to jump 18%, with FY21 expected to come in another 10% higher. On top of that, Limelight is expected to soar from an adjusted loss of -$0.02 in FY19 to +$0.07 a share in FY20, with FY21 projected jump another 81% higher to $0.13 per share.
Limelight’s positive post-release earnings revisions help it earn a Zacks Rank #2 (Buy) at the moment. LLNW has now crushed our bottom-line estimates in the past two quarters and it rocks a “B” grade for Growth in our Style Scores system. Shares of LLNW are down around 18% since it reported, as some investors take home profits on the stock that has skyrocketed 150% from $2.50 a share 12 months ago to its current price. Limelight stock popped 3% Monday morning, in a sign of a possible quick comeback. And LLNW trades at a significant discount to its industry, at 3.1X forward 12-month sales vs. 7.1X.
Unicharm Corp. ADR (UNICY - Free Report)
Prior Close: $9.02 USD
Unicharm operates a rather recession-proof business, which there should always be room for in a portfolio. The Tokyo, Japan-headquartered firm is a consumer goods giant that sells everything from diapers and feminine care to cleaning products and even face masks. UNICY stock is up 60% in the last year and 32% in 2020. This is part of a strong and steady climb over the last several years.
Unicharm’s revenue is projected to jump 7% this year and another 4% next year. Meanwhile, its adjusted earnings are expected to pop 50% and 7%, respectively during this same stretch. UNICY’s positive earnings revisions help it earn a Zacks Rank #2 (Buy) right now, alongside its “A” grade for Growth in our Style Scores system. Unicharm also pays a dividend.
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