The Dow, S&P 500, and Nasdaq all closed at new highs Monday, as the stock market continues its strong November. Wall Street has clearly been satisfied with corporate earnings, some reported U.S.-China trade war progress, along with solid U.S. jobs and consumer data.
With this in mind, investors might want to consider taking a look at a few cheap stocks, ones trading under $10 per share, amid the positivity. Here at Zacks we do try to avoid labeling stocks as “cheap” or “expensive.” Instead, we opt to look beyond a stock’s face value, and our system puts an emphasis on earnings estimate revisions to find stocks that will hopefully be winners.
Stocks trading under $10 can be more volatile than their pricier peers. Still, investors can grab strong returns by finding solid low-priced stocks.
Here are three cheap tech stocks that we found utilizing our Zacks Stock Screener that might be worth buying as we approach Thanksgiving…
ChannelAdvisor Corporation (ECOM - Free Report)
Prior Close: $9.00 USD
ChannelAdvisor is an e-commerce-focused cloud platform that helps “retailers and brands connect with customers, optimize operations and grow sales channels.” The firm, which has been around since 2001, enables customers to “securely power” sales and “optimize fulfillment” everywhere from Amazon (AMZN - Free Report) to eBay (EBAY - Free Report) and has worked with companies like Crocs (CROX - Free Report) and Target (TGT - Free Report) . The firm topped our Q3 2019 earnings estimates on November 7 and management feels ECOM is well positioned for future growth.
ECOM stock got off to a hot start when it first began trading in 2013, only to tumble and its shares have been somewhat volatile ever since. With that said, ChannelAdvisor shares have traded as high as $13 in 2019. Looking ahead, our current Zacks estimates call for ECOM’s full-year fiscal 2019 sales to slip slightly, with 2020 projected to come in 5.2% higher at $136.45 million. More importantly, ChannelAdvisor’s adjusted FY19 earnings are projected to soar 223% from $0.13 per share to $0.42, with 2020 expected to climb another 27%.
ECOM is currently a Zacks Rank #1 (Strong Buy) that also holds an “A” grade for Growth and a “B” for Momentum in our Style Scores system. And ChannelAdvisor has crushed our quarterly earnings estimates by an average of 251% in the trailing four quarters.
American Superconductor Corporation (AMSC - Free Report)
Prior Close: $8.03 USD
American Superconductor is a global energy solutions firm that works with wind industry companies and power grid leaders. The Boston, Massachusetts-headquartered firm’s tagline helps explain the basic business, “AMSC generates the ideas, technologies and solutions that meet the world’s demand for smarter, cleaner … better energy.” Like ChannelAdvisor, AMSC stock trades far below where it once did, but it is up 144% in the past two years and traded as high as $16 per share in February.
The company is projected to post adjusted losses in fiscal 2019 and 2020. With that said, American Superconductor’s 2020 loss is expected to be $0.19 smaller (-$0.93 vs -$0.74). Meanwhile, AMSC’s FY19 sales are projected to jump 5.5%, with 2020 expected to climb another 32% higher to $78.2 million.
American Superconductor is currently a Zacks Rank #1 (Strong Buy), based on its longer-term positive earnings estimate revisions. AMSC also holds a “B” grade for Value and an “A” for Momentum to help it earn an overall “A” VGM score, and it recently crushed our quarterly earnings estimate. In the end, the world needs more energy than ever before, which means modern and renewable solutions will be needed going forward.
NeoPhotonics Corporation (NPTN - Free Report)
Prior Close: $8.30 USD
NeoPhotonics designs and makes optoelectronic solutions utilized in high-speed communications networks across telecom and datacenters. NPTN posted stronger-than-projected top and bottom line results at the end of October. The company’s adjusted Q3 2019 earnings came in at $0.11, which crushed our $0.02 estimate and marked a huge improvement from the year-ago period’s loss. NPTN stock is up 36% since its Q3 report on Halloween and 113% in the last six months.
NPTN’s earnings estimate revision activity has moved completely in the right direction for Q4, fiscal 2019, and 2020. This positivity helps NeoPhotonics earn a Zacks Rank #1 (Strong Buy) right now. NPTN also rocks an “A” grade for Growth and a “B” for Momentum and is part of our Semiconductor – Communications industry, which rests in the top 24% of our more than 250 Zacks industries.
CEO Tim Jenks said in Q3 prepared remarks that “the macro trends of the industry favor” his firm’s “core capabilities.” Peeking ahead, NPTN’s adjusted Q4 earnings are projected to skyrocket 100% on 7% stronger sales. The company’s full-year FY19 revenues are then expected to jump roughly 9%, with 2020 expected to come in 7% higher. At the bottom end, NeoPhotonics is expected to jump from an adjusted loss in 2018 to break-even earnings in 2019 and then post earnings of +$0.24 per share in 2020.
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