The Wall Street has made an impressive comeback after two weeks of violent sell-off, which sent the major indices to correction territory. The positive trend is likely to continue in the months ahead, given the global economic growth, solid corporate earnings, and optimism around the new tax legislation. However, volatility and uncertainty will continue to show up, denting investors’ confidence from time to time.
In such a scenario, most investors want to remain invested in the equity world but may not be able to afford large stakes in valuable companies with higher priced stocks. For them, low-priced stocks could be attractive as these will enable them to buy more number of shares instead of just a handful of higher priced stocks for the same amount. For example, an investor willing to spend $10,000 can either purchase at least 500 shares of a stock trading under $20 or only 100 shares of a stock trading at $100.
Additionally, stocks under $20 reap huge profits as an increase of as less as a dollar in share price adds 5% to the portfolio. This is in contrast to stocks priced at $100 or above, which see 1% or lower gains if share prices move up by $1. Further, most of the low priced stocks have high levels of liquidity that give these stocks an added advantage. This means that cash can be converted quickly and investors could easily get their money out of the securities.
In fact, trading in higher average daily volumes keeps the bid/ask spread tight and does not lead to extra cost for the investor.
Moreover, given the chances of intermittent volatility, it is prudent to look for value and cheap plays along with low-priced stocks. We recommend stocks under $20 that have a Zacks Rank #1 (Strong Buy) or #2 (Buy) and average trading volume of at least 1 million shares as excellent picks. Adding some flavors of value and growth could make them highly appreciable. So, we have refined the search by using our Zacks stock screener to locate stocks with below-industry P/E ratio and double-digit earnings growth for the current year.
Here are five incredible stocks that are both cheap and liquid and can lead to huge gains:
Carrizo Oil & Gas Inc. (CRZO - Free Report)
This Texas-based energy company is engaged in the exploration, development, exploitation and production of oil and natural gas, primarily in proven trends in the Barnett Shale area in North Texas and along the Texas and Louisiana onshore Gulf Coast regions.
Last Closing Price: $18.56
Zacks Rank: #1
Average Volume (in shares): 3.19 million
Market Cap: $1.54 Billion
P/E: 6.07 vs industry average of 17.19
This Fiscal Year Earnings Growth: 115.56%
You can see the complete list of today’s Zacks #1 Rank stocks here.
Sally Beauty Holdings Inc. (SBH - Free Report)
This Texas-based company is an international specialty retailer and distributor of professional beauty products supplier.
Last Closing Price: $17.20
Zacks Rank: #1
Average Volume (in shares): 2.91 million
Market Cap: $2.12 Billion
P/E: 7.25 vs 13.85
This Fiscal Year Earnings Growth: 31.67%
OM Asset Management plc (OMAM - Free Report)
This Massachusetts-based multi-boutique asset management company provides its services to individuals and institutions.
Last Closing Price: $15.78
Zacks Rank: #2
Average Volume (in shares): 1.01 million
Market Cap: $1.78 Billion
P/E: 8.13 vs 11.76
This Fiscal Year Earnings Growth: 19.75%
Graphic Packaging Holding Company (GPK - Free Report)
This Georgia-based company is a leading provider of paperboard packaging solutions for a wide variety of products to food, beverage and other consumer products companies.
Last Closing Price: $15.15
Zacks Rank: #2
Average Volume (in shares): 3.90 million
Market Cap: $4.73 Billion
P/E: 16.20 vs 16.37
This Fiscal Year Earnings Growth: 53.97%
Keane Group Inc. (FRAC - Free Report)
This Texas-based company is a provider of integrated well completion services primarily in the United Stated and focuses on complex, technically demanding completion solutions.
Last Closing Price: $15.01
Zacks Rank: #1
Average Volume (in shares): 1.85 million
Market Cap: $1.76 billion
P/E: 11.33 vs 17.29
This Fiscal Year Earnings Growth: 533.3%
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Earlier this month, credit bureau Equifax announced a massive data breach affecting 2 out of every 3 Americans. The cybersecurity industry is expanding quickly in response to this and similar events. But some stocks are better investments than others. Zacks has just released Cybersecurity! An Investor’s Guide to help Zacks.com readers make the most of the $170 billion per year investment opportunity created by hackers and other threats. It reveals 4 stocks worth looking into right away.
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