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: $6.84
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).
Following the merger, earnings and revenue are expected to grow over the next year, but investors certainly are not paying a significant premium for that right now. The stock is trading at a reasonable 19.5x forward earnings and has a PEG of 1.6.
RBBN has slumped a bit over the trailing month, but shares have still surged nearly 40% since the start of April. We have seen the stock trade at almost $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. Avid Technology, Inc. (AVID - Free Report)
Prior Close: $6.27
Avid develops and sells a portfolio of software products used to create digital media content, including professionally-used music and video creation solutions. The stock is currently sporting a Zacks Rank #2 (Buy). AVID is a popular momentum pick right now, but the stock still sports a “B” grade in the Value category of our Style Scores system despite these recent gains.
Indeed, AVID has added about 32% in the past month and a half, including a nice 4% tick higher in the past five trading sessions. These gains have stretched the company’s P/E quite a bit, but its P/S ratio sits at a very attractive 0.6, and many investors find this value metric more revelatory for smaller tech and software firms like Avid.
3. Camtek Ltd. (CAMT - Free Report)
Prior Close: $8.83
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 #2 (Buy) and belongs to a group of businesses which sit in the top 1% 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 16.8x forward earnings. The stock is also a hot momentum option and has surged about 81% over the past year. CAMT could break into new 52-week highs as investors react to its remarkable growth story.
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.
See Zacks' 3 Best Stocks to Play This Trend >>