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 ten stocks that are currently trading for under $20 per share. All of these stocks currently have at least a Zacks Rank #2 (Buy), and a variety of other factors make these companies stand out as having strong upside potential.
1. Cypress Semiconductor Corporation (CY - Free Report)
Prior Close: $17.09
Cypress Semiconductor is a leading provider of high-performance digital and mixed-signal integrated circuits, and after shelling out $550 million for Broadcom’s Internet of Things business, its “WICED” platform is now one of the largest IoT portfolios in the industry. CY is currently a Zacks Rank #1 (Strong Buy) and is expected to witness EPS growth of 40% this fiscal year. The stock is also trading at a respectable 13.2x forward 12-month earnings. Meanwhile, CY sports a PEG of just 1.0, so investors know they are getting a great price for the company’s projected earnings growth.
2. FGL Holdings (FG - Free Report)
Prior Close: $8.60
FGL is a holding company offering fixed annuities and life insurance products, forming after the merger of CF Corp. and Fidelity & Guaranty Life was completed late last year. The stock is sporting both a Zacks Rank #2 (Buy) and a “B” grade for Value in our Style Scores system. FG is trading with a P/E of 7.8, which marks a discount to its industry average. Value investors will also love its P/B ratio of just 1.1. It has been a difficult year for the stock, but shares have bounced off their 52-week low and the firm recently posted a solid earnings beat.
3. AudioCodes Ltd. (AUDC - Free Report)
Prior Close: $7.49
AudioCodes designs, develops and markets enabling technologies and communication components for the transmission of voice, fax and modem over packet networks. Analysts have become increasingly bullish on AUDC lately, and our consensus projection for its full-year earnings has trended upward over the duration of the quarter. The stock is a Zacks Rank #2 (Buy) based on this revision activity. The company is now expected to witness EPS growth of 22% on 9% higher revenue this fiscal year. Meanwhile, AUDC’s P/S of 1.3 represents a discount to its industry average.
4. Callaway Golf Company (ELY - Free Report)
Prior Close: $19.75
Callaway is one of the largest golf apparel and equipment companies in the world, manufacturing respected gear for both professionals and amateurs. The stock is currently sporting a Zacks Rank #2 (Buy), as well as an “A” grade for Momentum. This is an interesting pick for those looking to ride a recent trend, as shares have surged more than 20% in just three months. This momentum is inspired by the company’s improving earnings outlook. ELY’s consensus EPS estimate for 2018 has gained nine cents over the past 60 days, and Callaway is now expected to see earnings growth of 53% this fiscal year.
5. New Residential Investment Corp. (NRZ - Free Report)
Prior Close: $18.30
New Residential is a mortgage REIT focused on the residential real estate market. The company pioneered investments in so-called Excess MSRs—which enable it to collect monthly cash flows without assuming some servicing duties, advance obligations, or liabilities. NRZ is a Zacks Rank #1 (Strong Buy) and offers a dividend yield of about 10.9%. The stock is also an interesting value play, with shares trading at just 8.3x forward earnings. NRZ also recently beat earnings estimates and watched its 2018 outlook improve.
6. Commercial Vehicle Group, Inc. (CVGI - Free Report)
Prior Close: $7.33
Commercial Vehicle Group supplies interior systems, vision safety solutions and other cab-related products for the global commercial vehicle market. CVGI is sporting both a Zacks Rank #1 (Strong Buy) and an “A” grade in our Value category. Shares have struggled to generate much momentum recently, but the stock now looks undervalued. CVGI has a P/E of just 5.6 and a P/S of 0.3—both of which are significant discounts to industry averages.
7. Big 5 Sporting Goods Corporation (BGFV - Free Report)
Prior Close: $8.30
Big 5 is a sporting goods retailer with about 420 stores in the western United States. Conditions have been tough for sports retailers over the past few years, but BGFV appears to have found a bottom, and shares have bounced more than 55% from their 52-week low. The stock is now a Zacks Rank #1 (Strong Buy). Shares are trading at just 12.2x forward 12-month earnings, while the stock’s P/B of 1.0 and P/S of 0.2 are also nice discounts.
8. Groupon, Inc. (GRPN - Free Report)
Prior Close: $4.50
In the midst of a transition to a marketplace-first focus, Groupon is looking to solidify a strong future for its business right now. The first step of this plan is to lock in consistent profitability. On this end, analysts are expecting Groupon’s full-year earnings to surge 109% from last year to touch $0.23 per share in 2018. This outlook has also improved recently thanks to nine positive earnings estimate revisions. This revision activity has earned GRPN a Zacks Rank #1 (Strong Buy). Groupon has faced challenges in recent years, but money is flowing into small caps, and its improving earnings picture could make it a great candidate for this new interest.
9. TerraForm Power, Inc. (TERP - Free Report)
Prior Close: $11.75
TerraForm Power is a global renewable energy company. It operates clean power generation assets such as solar, wind, natural gas, geothermal and hydro-electricity. Renewables have been volatile lately, but TERP has added nearly 8% in the past month and looks to be finding its financial footing. Earnings and revenue are expected to improve by 116.9% and 25.5%, respectively, in the current fiscal year. Shares are pricey at 57.3x forward earnings, but investors might be fine paying a premium for TERP’s outperformance and solid earnings outlook. The stock is currently holding a Zacks Rank #1 (Strong Buy).
10. ZAGG Inc. (ZAGG - Free Report)
Prior Close: $18.20
Best known for its invisibleSHIELD brand, Zagg is a designer of protective cases for consumer electronics. The company has a Zacks Rank #1 (Strong Buy) and looks like a great pick based on its valuation and growth metrics. Shares are trading at an attractive 13.0x forward earnings, and the stock’s P/S of 0.9 is also a significant discount to its industry average. Meanwhile, Zagg is projected to see earnings growth of 44.1% in 2018. Management is also polishing up its balance sheet and generating cash flow growth of more than 60.9%.
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