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 three stocks that fall into the broad “technology sector.” Each of these three stocks is currently trading for less than $10 per share and holds a Zacks Rank #2 (Buy) or better. Take a look at the strong estimate revision activity and other factors that make these companies stick out right now.
1. AudioCodes (AUDC - Free Report)
Prior Close: $6.78
AudioCodes designs, develops and markets enabling technologies and communication components for the transmission of voice, fax and modem over packet networks. AudioCodes is currently a Zacks Rank #2 (Buy), and its strength is underscored by its “B” grade for Value and “A” grade for Momentum in our Style Scores system. While the stock has gained more than 60% in the past year, it could keep moving higher, as our consensus estimates call for strong EPS and revenue growth this year and next year. Furthermore, the company boasts a better-than-industry-average net margin, and its current cash flow growth of nearly 44% soars past that of its industry rivals.
2. Intelsat S.A. (I - Free Report)
Prior Close: $3.61
Intelsat offers network services comprising transponder services, video distribution and contribution services, hybrid satellite, fiber and teleport managed services. Intelsat is at the head of a Satellite and Communication industry that currently sits in the top 12% of the Zacks Industry Rank, and the stock has been moving higher after the company beat our earnings expectations be nearly 40% recently. On top of this, Intelsat sports an “A” grade for Value, which is underscored by its shockingly low P/S ratio and impressive PEG ratio, meaning it is a rare low-priced value pick. Intelsal is currently a Zacks Rank #1 (Strong Buy).
3. ZAGG Inc. (ZAGG - Free Report)
Prior Close: $9.40
ZAGG Inc. designs, manufactures and distributes protective clear coverings and accessories for consumer electronic and hand-held devices, worldwide. ZAGG just smashed the Zacks Consensus Estimate by 20% in its most recent report, and now the company is looking to ride that momentum into the new quarter. Its full-year estimate for earnings has gained three cents in the past week, and now we expect EPS growth of 172% and sales growth of 21%. The stock also looks to be fundamentally sound, as its sporting “B” grades in all of our Style Scores categories, including the overall VGM category. Currently, ZAGG is a Zacks Rank #1 (Strong Buy).
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A stock’s market price is not a clear indicator of whether it is a good investment. However, the nice thing about the Zacks Rank is that it can be applied to stocks of any price. For smaller investors looking to find solid tech stocks at lower prices, this list is a great place to start.
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