At Zacks, we 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 for investors.
With that said, low-priced stocks can still be attractive to investors as they present the chance to take a larger position in a company, which they might not be able to in higher-priced stocks.
When searching for these low-priced stocks, we still look for similar trends in growth, value, and momentum. Then we apply the Zacks Rank to properly analyze the potential that these companies have. We are also 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 that investors might want to consider as we start the second half of 2019. Each of these three stocks is currently trading for less than $10 a share and holds a Zacks Rank #1 (Strong Buy) or #2 (Buy) at the moment.
1. Intevac, Inc. IVAC
Prior Close: $4.56 USD
Intevac designs and develops high productivity, thin film processing systems. The Santa Clara, California-headquartered company also develops high-sensitivity digital sensors, cameras, and systems with a focus on the the defense industry. Investors should note that Intevac is the “sole source provider” of integrated digital imaging systems for most U.S. military night vision programs. IVAC is currently a Zacks Rank #2 (Buy), with a price/sales ratio of 1, which marks a discount compared to its industry’s 1.3 average.
Intevac also sports “A” grades for both Growth and Momentum in our Style Scores system. Looking ahead, our current Zacks Consensus Estimate calls for the company’s full year revenue to jump over 20% to $114.5 million. In a sign of continued top-line growth, IVAC’s is projected to see its revenue climb 16% higher than our current year estimate to reach $132.8 million in the following year. At the bottom end of the income statement, Intevac is projected to swing from a loss of $0.19 a share last year to +$0.03. Better still, IVAC’s adjusted EPS figure is expected to come in at $0.27 in the following year.
2. Adesto Technologies Corporation IOTS
Prior Close: $8.24 USD
Adesto provides application-specific semiconductors and embedded systems that help drive Internet of Things edge devices. Shares of IOTS have soared roughly 80% so far this year from $4.66 in early January to Wednesday’s opening price of $8.24 per share. This helps the firm outpace its industry’s 22% average climb. Adesto's price to sales ratio of 2.5 represents a significant discount against its industry’s 4.2 average. Like, Intevac, Adesto is also currently a Zacks Rank #2 (Buy), based, in large part, on its positive longer-term earnings estimate revision activity.
IOTS, which also sports a “B” grade for Momentum in our Style Scores system, is projected to see its quarterly revenue surge 65% to help lift its adjusted earnings from a loss of -$0.08 to -$0.04 per share. The company full-year revenue is expected to climb over 48% to $123.9 million, with adjusted EPS projected to jump 87%. Adesto has also crushed its quarterly earnings estimates in the trailing three periods by a 27% average.
3. Digital Turbine, Inc. APPS
Prior Close: $5.11 USD
Digital Turbine operates in our Internet – Software industry and its business tries to connect OEMs, mobile operators, and publishers with advertisers and app developers. APPS stock has skyrocketed nearly 200% this year and 25% in the last month. The company posted better-than-projected fourth quarter fiscal 2019 earnings and revenue in early June, with Q4 revenue up roughly 29%. Digital Turbine is a Zacks Rank #2 (Buy) at the moment that rocks “A” grades for both Growth and Momentum. Despite its growth-focused profile, APPS’ price/sales ratio marks a discount compared to its industry at 4.03.
The Austin, Texas-based company is projected to see its Q1 fiscal 2020 revenue surge 28.4% to $28.39 million. Meanwhile, Digital Turbine’s adjusted first-quarter earnings are projected to swing from a loss of -$0.01 per share in the year-ago period to +$0.02. Peeking further down the road Digital Turbine’s fiscal 2020 EPS figure is projected to soar 62.5% to $0.13 a share on the back of 22% revenue growth.
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