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 stocks. 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.
Today we’ve highlighted five stocks that are currently trading for under $10 per share. These stocks are also showing signs for solid growth throughout 2017, and all of them currently hold a Zacks Rank #1 (Strong Buy).
1. Nobilis Health Corp. (HLTH)
Prior Close: $1.75
Nobilis Health Corp. is a regional healthcare facilities operator with several ambulatory surgery centers, acute care hospitals, imagining centers, and urgent care clinics in Texas and Arizona. The stock’s strong Zacks Rank has been lifted by recent its recent estimate revision activity, as we’ve seen one positive revision for the company’s current-quarter, full-year, and next-year earnings over the last 30 days. On top of this, HLTH looks fundamentally sound, which is evidenced by its overall VGM grade of “A.” Trend-focused investors will also note that the stock has “A” grades for Value and Growth.
2. Quantum Corporation (QTM)
Prior Close: $8.49
Quantum is a leading provider of data storage and protection. The company provides solutions for capturing, sharing, and preserving digital assets over the entire data lifecycle. The current fiscal year is shaping up to be one of aggressive earnings growth for Quantum; our current Zacks Consensus Estiamte calls for the company to post EPS growth of 96% this year. It’s also worth noting that the stock has been on an incredible run, gaining more than 150% over the past year. Nevertheless, its previous closing price is about 8% lower than its 52-week high, which means there’s plenty of upside before we even have to think about breaking into a new range.
3. Radiant Logistics (RLGT)
Prior Close: $5.88
Radiant Logistics is a global transportation and supply chain management company. This is another stock with solid earnings growth potential, as the current Zacks Consensus Estimate calls for Radiant to post full-year earnings of $0.27 per share. That would be a gain of 345% from last year’s loss of 11 cents. What’s more, Radiant has proven its ability to beat expectations, surpassing our consensus estimates by 600% and 900% over the last two quarters. The stock has dipped 5% over the past month, but shares are up over 52% year-to-date, so its recent price action may provide investors with a nice discount before it takes off again.
4. Sorl Auto Parts (SORL)
Prior Close: $8.72
Sorl Auto Parts is a China-based maker of air brake valves and hydraulic brake valves, which it sells to a wide range of vehicle manufacturers. SORL has been one of the hottest low-priced stocks on the market this year, primarily because of the company’s impressive earnings and sales growth. For the full year, our consensus estimates would reflect revenue growth of 16% and EPS growth of 29%. Furthermore, the company falls into a group of businesses that sit in the top 12% of the Zacks Industry Rank and the top 6% of the Zacks Sector Rank. Finally, with a “B” grade for Value and an “A” grade for Momentum, this stock could be a darling for a variety of trendy investors.
5. Tecogen Inc. (TGEN)
Prior Close: $3.38
Tecogen Inc. designs, manufactures, sells, and services systems that produce electricity, hot water, and air conditioning for commercial installations and buildings and industrial processes. While analysts are expecting the company to post a full-year loss, our consensus estimates do call for EPS growth of 33% and sales growth of 23%. There has also been one positive revision to Tecogen’s next-year earnings estimates, and the latest figures not call for the company to turn a profit in 2018. Furthermore, revenues are expected to continue to grow, with growth rates hitting 28% next year.
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A stock’s market price is certainly not the most important factor to consider when considering whether or not to add it to your portfolio, and sales and earnings growth projections can prove to be tough to live up to.
Nevertheless, we can always use Zacks’ proven methods of finding quality stocks, and these five companies just happen to be showing strength while also trading for under $10 per share. If you would like to check out more of these low-priced stocks, look no further than our Stocks Under $10 portfolio service!
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