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. MAM Software Group (MAMS - Free Report)
Prior Close: $8.59
MAM Software provides business management software solutions to the automotive aftermarket, supply, and distribution industries. Following two consecutive earnings beats, the stock has soared more than 28% in three months. Earnings estimates for the current quarter and full fiscal year have gained within the past 60 days, and sales figures were already looking strong. In fact, MAM is projected to post revenue growth of 11% this year and 6% next year. Furthermore, the company is expanding its cash flow growth by 22%, and its RoE currently sits at an impressive 51%. Finally, investors should note that MAMS is currently a Zacks Rank #1 (Strong Buy).
2. Fitbit, Inc. (FIT - Free Report)
Prior Close: $6.02
Fitbit manufactures and markets wearable fitness-tracking devices. Although the company’s growth has been slowed by massive competition in the wearables space, management has been proactive recently. The company just introduced its first smartwatch, the Ionic, and it has undergone significant executive shakeup and cost structuring recently. The stock is currently holding a Zacks Rank #2 (Buy). Fitbit’s earnings and revenue figures will face tough year-over-year comparisons this quarter, but in the important holiday quarter, we expect to see the company post EPS growth of 94%. Also, the company’s “Electronics - Measuring Instruments” industry is currently in the top 12% of the Zacks Industry Rank.
3. Sonus Networks (SONS - Free Report)
Prior Close: $7.24
Sonus Networks is a leading provider of voice infrastructure products for the new public network, and the company offers a variety of cloud-based, VoIP, and IP-based communications solutions. It has been a year of impressive top and bottom line expansion for Sonus, and our current consensus estimates are calling for the company is finish with full-year EPS growth of 22% and sales growth of 30%. More impressively, that expansion is expected to continue, with current estimates calling for EPS growth of 25% and revenue growth of 90% next year. The company has also met or surpassed estimates in 10 consecutive quarters, and with a P/S ratio of just 1.44, the stock is still looking undervalued based on its sales. SONS is currently a Zacks Rank #1 (Strong Buy).
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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