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 shares. 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.
Moreover, recent volatility in the stock market has lowered valuations and taken several notable stocks under mental per-share thresholds as investors continue to adjust to the New Year. Today we’ve highlighted five stocks that are currently trading for under $10 per share.
All of these stocks currently sport a Zacks Rank #2 (Buy) or better, and the selected companies are showing signs of outpacing the market throughout 2019.
Check out these five great stocks under $10 for 2019:
1. Ericcson (ERIC)
Prior Close: $9.18
Ericsson is a world-leading supplier in the telecommunications and data communications industries, offering advanced solutions for mobile and fixed networks, as well as consumer products. ERIC is sporting a Zacks Rank #2 (Buy) just a few weeks into the New Year, and its “A” grade in the Growth category of our Style Scores system adds to that promise going forward.
Earnings growth is expected to total nearly 158% in fiscal 2018, and early estimates have that figure improving another 54% in 2019. Earnings estimates for 2019 have already trended upward, which is a sign of positive analyst sentiment. The stock also seems to be reasonably valued, as evidenced by its P/S ratio of 1.2. ERIC warrants a look while it is still discounted.
2. BlackBerry Limited (BB)
Prior Close: $7.47
BlackBerry is best known to the public for its once-iconic brand of smartphones, but the company ditched hardware manufacturing recently and now serves as an enterprise software and services company. BB is holding a #1 (Strong Buy) rank and looks to be among our best long-term earnings growth plays. The stock has a projected long-term EPS growth rate of 18.5%, on an annualized basis.
At 45x earnings, the stock could look overvalued even at its low sticker price, but a PEG ratio of 2.4 shows that potential BlackBerry investors are actually getting a reasonable price for this earnings growth potential. The company is also looking to establish itself as a segment leader in mobile and in-car enterprise security, which could reap untold benefits for investors.
3. inTest Corporation (INTT)
Prior Close: $7.28
InTest makes ATE interface solutions and temperature management products, which are used by semiconductor manufacturers to perform important testing of certain circuits and wafers. The big thing to like here for 2019 is the magnitude of EPS estimate revisions. The Zacks Consensus mark for this period has increased 26 cents, or 35%, in the past 90 days. This means sentiment related to this year’s earnings is improving dramatically. Moreover, the stock is trading with a P/E of just 6.8, which is a discount compared to its industry’s average.
4. AudioEye, Inc. (AEYE)
Prior Close: $7.92
AudioEye is a cloud-based digital accessibility company. In short, it works with other firms that are looking to make their own websites and online platforms easier to use for those in need. For instance, AudioEye can help make a website controllable through voice commands, so that people who might not be able to use a keyboard and mouse can have the complete experience of that web-page.
AudioEye issued a reverse stock split and began trading on a Nasdaq exchange earlier this year, so investors are still getting used to the new format. The stock now has a Zacks Rank #1 (Strong Buy) amid exciting times of growth for the company. The business is heating up, with earnings growth in 2019 expected to reach 33% on top of 2018’s projected 57% growth. Revenue is projected to double from 2018 to 2019.
5. eGain Corporation (EGAN)
Prior Close: $6.73
eGain is a provider of customer engagement cloud solutions. The firm offers B2C companies a simple and affordable suite of products which deliver multichannel customer service through a single interaction and knowledge management platform. EGAN has a #2 (Buy) and is looking poised for strong growth this fiscal year, which ends in June 2019. Earnings are expected to improve by 33% on 7% revenue growth in that period.
EGAN’s valuation is stretched, as the stock trades like a long-term growth prospect typically would. However, it does have a P/S ratio of 3.0, which is a steep discount to the industry average of 4.6. The Price-to-Sales ratio is often a better value metric for these smaller tech stocks, and EGAN is trading at a smaller revenue multiple than one might expect from a cloud pure-play right now.
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