The Dow, the S&P 500, and the Nasdaq all quickly plummeted into a correction last week as the coronavirus spreads outside of China. Apple (AAPL - Free Report) , Microsoft (MSFT - Free Report) , and others have all lowered their guidance based on negative impacts in both supply and demand in the world’s second-largest economy.
The novel coronavirus has continued to spread around the world and more cases are popping up in the U.S. Yet the market surged on Monday and popped again Wednesday, after Joe Biden’s strong performance in Super Tuesday primaries.
Plus, the Fed announced Tuesday that it cut its benchmark interest rate by half a percentage point, to between 1% and 1.25%. The move is aimed to help provide a boost to the U.S. economy amid coronavirus worries. Plus, the 10-year U.S. Treasury note had already slipped to all-time lows below 1.0% and currently rests at 0.96%.
Clearly, market uncertainty will remain, and stocks are likely to stay somewhat volatile until there is some end in sight to the coronavirus and more companies update their outlooks.
With that said, investors should still be on the lookout for stocks to buy, or least add to their watchlists with interest rates so low and stocks down big from their recent highs.
Today, we are focusing on cheap stocks trading under $10 per share. Stocks trading under $10 can be more volatile than their pricier peers, but investors can still grab solid returns with the right low-priced stocks. So, let’s dive into 3 that we found today…
SunPower Corporation (SPWR - Free Report)
Prior Close: $8.91 USD
SunPower designs, manufactures, and sells solar panels and systems to everyone from homeowners to businesses and utility customers. The San Jose, California-headquartered firm crushed our Q4 earnings estimates last month, with fiscal 2019 sales up 8%. SPWR also announced a proposed spin-off of Maxeon Solar and completed a “successful capital raise and partial convertible bond retirement to further strengthen our balance sheet.”
SPWR shares went on a tear last year, climbing from $7 a share in March to over $14 by July. The stock then fell, but it is up 26% in the last three months. Looking ahead, our Zacks estimates call for SunPower’s fiscal 2020 sales to surge 13%, with 2021 projected to climb another 15% higher to $2.58 billion. Meanwhile, SunPower’s adjusted 2020 earnings are projected to climb from a loss of -$0.29 a share to +$0.04 a share. Then its 2021 EPS figure is set to skyrocket over 800% to $0.37 a share.
SunPower is currently a Zacks Rank #2 (Buy) that sports an “A” grade for Momentum in our Style Scores system. The stock is also part of a highly ranked Zacks industry that includes Enphase Energy (ENPH - Free Report) and SolarEdge (SEDG - Free Report) . And Wall Street has been behind renewable energy stocks recently, including Tesla (TSLA - Free Report) .
More broadly, the traditional oil and gas-heavy Energy space was the worst-performing sector of the S&P 500 over the last decade. And the U.S. Energy Information Administration forecasts that generation from non-hydropower renewable energy sources, such as solar and wind, will grow by 15% in 2020.
Tesco PLC (TSCDY - Free Report)
Prior Close: $8.94 USD
Tesco is a UK multinational grocery and retail powerhouse. In November, Tesco became the first major British supermarket chain to offer a subscription customer loyalty program. Tesco’s Clubcard Plus is designed to help it fight off discount retail encroachment and management has been pleased with its early results. And the supermarket giant is closing in on a deal to sell its stores in Asia for roughly $10 billion.
Shares of Tesco are up 9% in the last six months to easily top its industry’s 8% decline. This run is part of a 33% climb over the past three years. TSCDY has also consistently traded at a discount compared to its industry over the last two years. And the company’s 2.28% dividend yield tops U.S. giants Kroger (KR - Free Report) , Walmart (WMT - Free Report) , and Costco (COST - Free Report) .
Tesco’s positive earnings estimate revision activity helps it hold a Zacks Rank #2 (Buy) right now.TSCDY also holds an “A” grade for Value and a “B” for Growth to help it earn an overall “A” VGM grade. Looking ahead, the company’s adjusted fiscal year earnings are projected to jump over 27% to $0.70 a share on the back of 13.5% sales growth.
Mitek Systems, Inc. (MITK - Free Report)
Prior Close: $8.64 USD
Mitek Systems utilizes artificial intelligence and machine learning to help financial institutions and other enterprises verify a user’s identity during digital transactions. Mitek’s solutions are embedded into the apps of over 6,500 organizations and used by more than 80 million consumers to perform tasks such as mobile check deposit. Mitek, topped our Q1 FY20 estimates at the end of January, driven by double-digit growth in mobile deposit and identity verification products.
Since the report, Mitek’s fiscal 2020 and 2021 earnings revisions have climbed to help it earn a Zacks Rank #1 (Strong Buy). MITK also sports an “A” grade for Growth and it has crushed our bottom-line estimates in the trailing four quarters by a 32% average. Mitek shares have surged 22% in the last three months and 180% in the last five years from under $4 a share to its current price point. And the stock still has plenty of room to run before it hits its 52-week highs of $13 a share.
Peeking ahead, the San Diego-based company’s adjusted 2020 earnings are projected to surge 21.4% to $0.51 per share on 18.3% higher revenues. Then the company’s sales and earnings are both expected to climb another 15% higher in 2021. And the mobile capture and digital identity verification firm could be poised to grow for years to come in our online and mobile-heavy economy.
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