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. FGL Holdings (FG - Free Report)
Prior Close: $8.92
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 #1 (Strong Buy) and a “B” grade for Momentum in our Style Scores system. Still, FG is trading with a P/E of 7.9, which marks a discount to its industry average. Value investors will also love its P/B ratio of just 1.2. It has been a difficult year for the stock, but shares have bounced off their 52-week low and have added more than 8% in the past three weeks.
2. Callaway Golf Company (ELY - Free Report)
Prior Close: $19.06
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 holding a Zacks Rank #2 (Buy). Callaway is an interesting earnings growth story right now, with full-year estimates calling for EPS to improve by 53%. And considering the stock’s PEG of just 0.9, investors are likely getting a great price for this growth outlook. It is also worth mentioning that these estimates have trended higher recently, and ELY has soared more than 50% in the past year.
3. New Residential Investment Corp. (NRZ - Free Report)
Prior Close: $18.51
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 expected to release its latest earnings report on July 26. Sentiment looks good ahead of the report, with one positive estimate revision coming in just the past week. Plus, as a REIT, the company pays a strong dividend. NRZ’s dividend yield currently sits at about 10.8%. The stock is currently a Zacks Rank #2 (Buy).
4. Groupon, Inc. (GRPN - Free Report)
Prior Close: $4.79
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 118% from last year to touch $0.24 per share in 2018. This outlook has also improved recently thanks to 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.
5. Carrols Restaurant Group, Inc. (TAST - Free Report)
Prior Close: $14.70
Carrols is an American franchisee company and is the largest Burger King franchisee in the world. The company owns more than 800 Burger King locations across 20 U.S. states. TAST is a Zacks Rank #1 (Strong Buy) stock with an “A” grade the Growth category of our Style Scores system. Carrols is projected to witness EPS growth of 70% in 2018, and that earnings growth will help its balance sheet. TAST could also be a momentum play, as the stock has gained a staggering 40% in the trailing 12 weeks.
6. Strata Skin Sciences, Inc. (SSKN - Free Report)
Prior Close: $1.86
Strata Skin Sciences is a medical technology company focused on the dermatology market. It builds and sells laser and light systems for the treatment of psoriasis, vitiligo, and other skin conditions. SSKN is a low-priced, micro-cap stock, but it is sporting a Zacks Rank #1 (Strong Buy) and could be on the verge of a breakout. Over the past 90 days, the Zacks Consensus Estimate for SSKN's full-year earnings has moved 78.10% higher. This signals that analyst sentiment is improving. Plus, SSKN looks to have found a bottom a few months ago and has gained more than 49% this year.
7. Tilly’s, Inc. (TLYS - Free Report)
Prior Close: $15.06
Tilly’s is a specialty retailer in the action sports industry selling clothing, shoes, and accessories. The retailer is popular among skateboarders and surfers, as well as trendy young fashion purveyors who love “streetwear” brands. Tilly’s has gained about 25% since its most recent earnings report and now sits near its 52-week high. However, at just 18x forward earnings, TLYS is actually cheaper now than it was at this time last year when the stock sat around $10.50. Earnings growth for the soon-to-be-reported quarter is expected to touch 136%, and Tilly’s should be able to ride the streetwear trend to even more growth in the future.
8. Papa Murphy’s Holdings, Inc. (FRSH - Free Report)
Prior Close: $5.23
Papa Murphy's operates as a franchisor and operator of the “Tane ‘N’ Bake” pizza chain it gets its name from. FRSH sports a Zacks Rank #1 (Strong Buy) and looks poised for a massive earnings recovery this year, with EPS figures expected to improve by 150% in 2018 alone. Plus, the stock is trading at just 14x forward earnings, and with its PEG of 1.3, investors are also getting a great price for that growth outlook. Analysts are piling on the love for this stock, and its full-year EPS estimates have gained 48% over the previous quarter.
9. Sunrun Inc. (RUN - Free Report)
Prior Close: $14.74
Sunrun is a leading developer of residential solar energy systems, operating through both its direct-to-consumer and partner-focused channels. RUN is an interesting buy-and-hold pick for investors who are bullish on the solar space, especially considering its long-term projected EPS growth rate of 14%. However, the stock also has a Zacks Rank #1 (Strong Buy), so it looks poised for strong returns over the next one to three months as well. Also, shares are trading with a P/E of 9 and PEG of 0.7, so the company’s current share prices look attractive.
10. Denny’s Corporation (DENN - Free Report)
Prior Close: $15.65
Denny’s is the franchisor and operator of one of America’s largest full-serviced restaurant chains. The company has more than 1,724 franchised, licensed, or owned diners around the world. DENN is a Zacks Rank #2 (Buy), and the stock might be a great pick in turbulent markets. Domestic restaurant stocks should be shielded from much of the trade war woes, and with a Beta of just 0.5, this stock appears to be less volatile than the market average. DENN currently sports a Zacks Rank #2 (Buy).
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