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. Ribbon Communications, Inc. (RBBN - Free Report)
Prior Close: $6.97
Ribbon Communications is a leading provider of voice infrastructure products for the new public network, and the company offers a variety of cloud-based, VoIP, and IP-based communications solutions. Formed by the merger of Sonus and GENBAND, Ribbon is currently sporting a Zacks Rank #1 (Strong Buy) and presents interesting growth and value options.
Following the merger, earnings and revenue are expected to grow over the next year, but investors certainly are not paying a premium for that right now. The stock is trading at just 14.5x forward earnings and has a PEG of 1.20.
RBBN has slumped a bit over the trailing month, but shares have still surged about 40% since the start of April. We have seen the stock trade around $8.50 within the past year, so it might not take much for investors to push this thing back toward the top end of its range.
2. Camtek Ltd. (CAMT - Free Report)
Prior Close: $9.29
Camtek is a developer of automatic optical inspection systems that are used to enhance both production processes and yield for manufacturers in the circuit board and semiconductor industries. CAMT is holding a Zacks Rank #1 (Strong Buy) and belongs to a group of businesses which sit in the top 5% of the Zacks Industry Rank.
Camtek is projected to see its full-year earnings improve by 96% in 2018 and an additional 25% in 2019. Still, the valuation is attractive here at just 17.7x forward earnings. The stock is also a hot momentum option and has surged about 25% over the past month. CAMT should continue making new 52-week highs as investors react to its remarkable growth story.
3. Pixelworks, Inc. (PXLW - Free Report)
Prior Close: $4.30
Pixelworks designs semiconductors and software that enable the visual display of broadband content through a wide variety of electronic devices. PXLW has a Zacks Rank #2 (Buy) and holds an “A” grade for Momentum in our Style Scores system after the stock soared following earnings.
In the most recent quarter, PXLW reported break-even quarterly earnings per share versus the Zacks Consensus Estimate of a loss of $0.01. The stock skyrocketed more than 30% in the wake of the report, although it is still a long way from its 52-week high of $7.05. PXLW can break back to those ranges if its earnings momentum continues.
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