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. IEC Electronics Corp. (IEC - Free Report)
Prior Close: $6.23
IEC Electronics is a provider of electronic contract manufacturing services, including circuit cards, cable loads, and wire harness assemblies. After a strong earnings beat sent shares flying last month, IEC attracted renewed analyst optimism and now holds a Zacks Rank #1 (Strong Buy).
In addition to this designation, IEC is expected to witness quadruple-digit EPS growth and revenue growth of 24% this fiscal year. Meanwhile, the stock is trading at just 12.7x forward 12-month earnings—despite having climbed 33% in the past four weeks. Investors should love the stock’s attractive valuation and strong momentum right now.
2. MAM Software Group, Inc. (MAMS - Free Report)
Prior Close: $8.62
MAM Software provides business management software solutions to the automotive aftermarket, supply, and distribution industries. The stock has been among the most popular picks in the red-hot small-cap software space and currently sports a Zacks Rank #2 (Buy). MAMS also holds an “A” grade for Growth in our Style Scores system.
The company is projected to witness double-digit revenue growth in 2018, and management is improving its cash flow at a rate of nearly 22% right now. Also, the firm’s net margin of 13.6% is significantly higher than its industry’s average. Shares have moved about 9% higher in the last month and look poised to break even higher soon.
3. 21Vianet Group, Inc. (VNET - Free Report)
Prior Close: $9.13
21Vianet is one of China’s leading carrier-neutral internet data center services providers. The firm provides hosting and related services, managed network services, and cloud computing infrastructure. VNET is currently holding a Zacks Rank #2 (Buy) and looks like an interesting pick for anyone trying to find strong Chinese tech stocks.
Shares have added a staggering 78% in the past month but could break higher if 21Vianet lives up to its growth expectations, with current estimates calling for earnings to improve by 83% in 2018. Meanwhile, the company is seeing cash flow growth of 103% right now. Still, with the stock sporting a P/S ratio of just 2.0, investors are clearly getting a solid price right now.
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.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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