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. 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.
Today we’ve highlighted five stocks that are currently trading for under $10 per share. All of these stocks also sport a Zacks Rank #2 (Buy) or better, and are showing signs of outpacing the market.
1. Glu Mobile Inc. GLUU
Prior Close: $7.89
Glu Mobile is a global developer and publisher of mobile video games, such as MLB Tap Sports Baseball, Deer Hunter, and Kim Kardashian: Hollywood. The company announced at the end of May the launch of a new wrestling game called WWE Universe, as part of a multi-year agreement with WWE WWE. On top of that, Glu Mobile is projected to debut Disney Sorcerer’s Arena DIS in August. Both of these new titles could help GLUU expand its user base and revenues as mobile gaming continues to grow in popularity around the world.
GLUU shares did plummet following the release of its Q1 financial results in early May, despite topping our revenue estimate and matching on earnings. The selloff can be attributed in part to many shareholders taking profits after GLUU’s stellar run from under $2 a share in December 2016 to $11.22 per share on May 6. Looking ahead, our current Zacks Consensus Estimate calls for the firm’s adjusted fiscal 2019 earnings to soar 250% to touch $0.35 per share on nearly 18% revenue expansion to reach $452.82 million. And Glu Mobile’s positive longer-term earnings estimate revision activity helps it earn a Zacks Rank #2 (Buy).
2. Ford Motor Company F
Prior Close: $9.61 USD
Right off the bat, Ford is currently a Zacks Rank #2 (Buy) that sports an “A” grade for Value in our Style Scores system. The auto giant pays an annualized dividend of $0.60 per share, with a strong 6.24% yield. Ford’s price/sales ratio of 0.24 marks a discount compared to its industry’s 0.72 average and rivals such as General Motors’ GM 0.33 and Tesla’s TSLA 1.38. Ford is also trading well below its industry’s average forward PE of 10.4X at 6.9X.
At its current price point, coupled with its dividend and solid valuation metrics, Ford stock might be one to consider. Furthermore, shares of Ford have surged 29% in 2019 to crush the S&P 500’s 9% average. Investors should also note that the historic auto maker is reportedly set to launch 40 electric vehicles by 2022 in order to compete with the likes of Tesla and international peers. F is also set to jump into the autonomous vehicle space and its longer-term earnings estimate revision activity has trended in the right direction recently to help it earn a Zacks Rank #2 (Buy).
3. Encana Corporation ECA
Prior Close: $5.34 USD
Encana is a North American energy producer that boasts a portfolio of natural gas, oil, and natural gas liquids. The firm recently completed its $7.7 billion acquisition of Newfield Exploration Company to help it focus on three key growth areas or its Core 3 liquid plays, namely Permian, Anadarko, and Montney. The Canadian company has seen its earnings estimate revision activity for fiscal 2019 and 2020 trend more heavily in the right direction recently, which helps ECA earn a Zack Rank #2 (Buy).
Encana’s current-year earnings are projected to sink 9.3%, despite projected 6.3% revenue growth. With that said, the company’s 2020 EPS figure is expected to surge 14% above our 2019 estimate on 10.1% higher revenues. The company is a dividend payer with a yield of 1.40%. ECA also rocks “A” grades for Value and Momentum and a “B” for Growth in our Style Scores system. The firm is currently trading at 6.8X forward earnings estimates, which marks a discount compared to its industry’s 8.1 average.
4. The Meet Group, Inc. MEET
Prior Close: $3.76 USD
The Meet Group is a social media company offering several different dating/social entertainment apps, including MeetMe, Skout, and Lovoo. These apps are primarily focused on streaming video, mobile chat, gifting, and photo sharing. MEET is coming off a first quarter of fiscal 2019 that saw its revenue pop 32% to reach $49.5 million, which topped our Zacks Consensus Estimate.
Peeking ahead, the company full-year earnings are projected to jump roughly 28% on 18.8% revenue expansion. Along with its “cheap” face value, MEET stock looks relatively inexpensive at the moment. Shares of MEET are trading at 10.4X forward 12-month Zacks Consensus EPS estimates, which represents a discount compared to its industry's 24.7X average and the S&P 500’s 15.9X. The Meet Group’s price/sales ratio of 1.5 also comes in well below its industry’s 4. MEET is Zacks Rank #2 (Buy) right now that sports “B” grades for Value, Growth, and Momentum in our Style Scores system.
5. Ring Energy, Inc. REI
Prior Close: $3.74 USD
Ring Energy is an oil and gas exploration and development firm that operates mostly in two areas in the Permian Basin. Shares of the Midland, Texas-headquartered company have plummeted over the last year. But the company’s outlook could help things turn around. Ring Energy’s full-year revenue is projected to soar 74% to $208.82 million. At the bottom end of the income statement, REI’s adjusted fiscal 2019 earnings are expected to climb 51% to reach $0.71 per share.
On top of that, the company’s fiscal 2020 revenue is expected to come in 24% above our current year estimate, with earnings expected to surge 25% higher. Ring Energy’s impressive upward earnings estimate revision activity for fiscal 2019 helps it earn a Zacks Rank #1 (Buy) at the moment. REI also boasts a “B” grade for Value and an “A” for Momentum in our Style Scores system.
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The Walt Disney Company (DIS) : Free Stock Analysis Report
MeetMe, Inc. (MEET) : Free Stock Analysis Report
Tesla, Inc. (TSLA) : Free Stock Analysis Report
Ford Motor Company (F) : Free Stock Analysis Report
General Motors Company (GM) : Free Stock Analysis Report
World Wrestling Entertainment, Inc. (WWE) : Free Stock Analysis Report
Encana Corporation (ECA) : Free Stock Analysis Report
Ring Energy, Inc. (REI) : Free Stock Analysis Report
Glu Mobile Inc. (GLUU) : Free Stock Analysis Report
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