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. We are also keenly aware of the latest sector trends and make sure to cover all of the hottest industries.
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 tech companies stick out right now:
1. SITO Mobile, Ltd. (SITO - Free Report)
Prior Close: $3.63
SITO Mobile is a provider of location-based advertising and mobile messaging platforms that allow brands to launch targeted mobile advertising campaigns. The stock is sporting a Zacks Rank #2 (Buy), and the company has witnessed strong earnings estimate revision activity and is now expected to improve its bottom line by 94% in the current fiscal year.
That earnings growth is projected to come on the back of 21.5% revenue growth. The company is still expected to be in the red this year, but earnings are estimated to turn positive soon, and EPS expansion is expected to reach an annualized rate of 25% over the next three to five years. Meanwhile, the stock is trading with a respectable P/S ratio of 2.1.
2. Limelight Networks, Inc. (LLNW - Free Report)
Prior Close: $3.95
Limelight provides content delivery network solutions and partners with over 1,300 brands to deliver live and on-demand video around the world. Earnings estimates for the company’s current year have trended higher lately, lifting the stock to a Zacks Rank #2 (Buy). Limelight has also made a habit out of crushing analyst expectations recently, surpassing earnings estimates by an average of 250% in each of the trailing four quarters.
The company is expected to witness decent growth this year, with earnings expected to improve 10% and revenue projected to improve 7%. Those figures are also projected to improve by 45% and 8%, respectively, in the upcoming year. Investors will not get this growth opportunity with attractive valuation metrics, but Limelight is improving its cash flow significantly—indicating that management is positioning itself to transition into a stable option soon.
3. MAM Software Group Inc. (MAMS - Free Report)
Prior Close: $8.03
MAM Software provides business management software solutions to the automotive aftermarket, supply, and distribution industries. MAMS is currently sporting a Zacks Rank #2 (Buy) and could catch the eye of growth and momentum investors alike. The stock has moved about 8% higher over these past few volatile months, and expansion estimates could foreshadow a continued surge.
MAM Software’s growth will likely come in the way of revenue improvement this year, with current estimates calling for net sales to gain 12.3% in the period. But earnings growth will be the story in the upcoming fiscal year, which begins in July. Our latest consensus estimates are predicting EPS growth of 48% in that period.
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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Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
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