5 Top-Ranked Tech Stocks Under $20 That Promise Gains in 2021
Vaccines for COVID-19 are being rolled out, raising hopes for the pandemic-struck world to resume normalcy in 2021.
Additionally, there is substantial liquidity available in the market with optimistic projections regarding 2021 GDP growth as well as expectations that the new administration led by Joe Biden will come up with significant fiscal stimulus measures.
This further bodes well for tech sector that has been more resilient compared to others over the past year.
Markedly, the Technology Select Sector SPDR (XLK) has rallied 35.3% in the past year. The ETF has outperformed the gains of major U.S. indices, the Dow Jones and the S&P 500, which have gained 7.5% and 17.1%, respectively in the same period.
Speaking about the dynamics within the industry, it is interesting to note that the pandemic has fueled a number of trends that were present prior to the health crisis as well as compelled businesses to transform.
Tech Prospects Bright in 2021
Most remarkably, cloud computing, Internet services and cybersecurity providers have been grabbing the limelight, benefiting from the ongoing work from home, web-based learning and remote health diagnosis trends, proving their resilience amid the pandemic.
Shift in consumer preference for Internet-based services, attributable to the work-and-learn-from-home necessity, has increased demand for smartphones, PCs, notebooks and peripheral accessories. There has also been an increase in demand for cloud storage. Therefore, data-center operators are enhancing their capacities to accommodate the demand spike for cloud services.
Additionally, the sector’s resiliency can be attributed to the impressive long-term growth prospects of tech companies owing to continuous digital transformations. Rapid adoption of cloud computing, and the ongoing integration of AI and machine learning have been major growth drivers.
Moreover, growing demand for e-commerce, contactless delivery through drones and digital payment highlight the urgency for accelerated 5G network development.
Meanwhile, blockchain, IoTs, smartphones, autonomous vehicles, storage solutions, AR/VR and wearables, networking and connectivity solutions — including Wi-Fi as well as Wi-Fi/Bluetooth integrated SOCs — and the need for high-speed data in both communications networks and data centers offer significant growth opportunities.
Our Picks
Per the Zacks’ proprietary methodology, stocks with the combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy) offer solid investment opportunities.
Based on this, here we pick five technology stocks currently trading for less than $20 a share that have strong fundamentals and are well-poised for growth in 2021. These stocks carry a Zacks Rank 2 and Growth Score of A each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Although these stocks trade under $20 and can be more volatile than their costlier peers, strong bottom-line projections and positive estimate revisions in recent times point toward momentum in the mid-term, especially after the coronavirus crisis dissipates.
One Year Performance
Cloudera CLDR has been benefiting from solid adoption of its portfolio of products, which includes Cloudera Enterprise Data Hub, Cloudera Analytic BD, Cloudera Operational DB, Cloudera Data Science & Engineering and Cloud Essentials. Additionally, a large base of enterprise customers is driving subscription business growth, which runs on a recurring-revenue model.
Moreover, increased importance of data, data analysis and data security are expected to aid the adoption of Cloudera’s hybrid cloud solutions in 2021.
Currently, Cloudera has a market cap of $4.33 billion. The stock is currently priced at $13.8 per share. Notably, the consensus mark for 2021 earnings has increased 24.2% to 41 cents per share over the past 60 days.
Himax Technologies HIMX primarily designs, develops and markets semiconductors that are critical components of flat panel displays. The stock has rallied 148.2% in the past year.
The company’s products include liquid crystal on silicon (LCOS) and depth-sensing cameras that play a crucial role in the AR market. Notably, LCOS chips are utilized to block light in AR/VR headsets. Depth-sensing cameras are utilized to measure distances to place digital objects.
Several AR devices including Alphabet’s Google Glass and Microsoft’s MSFT HoloLens use the company’s products, which favor business prospects.
Himax Technologies has a market cap of $1.2 billion. The stock is currently priced at $7.37 per share. Notably, the Zacks Consensus Estimate for 2021 earnings has soared 92.3% to 25 cents per share over the past 60 days.
CommScope’s COMM PON gateways offer enhanced IoT, video and data services over fiber networks on the back of optimized Wi-Fi solution.
Additionally, the recent launch of NVG578LX GPON (Gigabit Passive Optical Network) gateway is expected to strengthen CommScope’s presence in the networking space, especially at a time when the pandemic is leading to an impressive upsurge in data traffic.
Moreover, the acquisition of ARRIS strengthened CommScope’s position to capitalize on the industry growth trends including network convergence, fiber and mobility, IoT, demand for additional bandwidth, low latency and ultra-high reliability.
CommScope has a market cap of $2.6 billion. The stock is currently priced at $14.24 per share. Notably, the Zacks Consensus Estimate for 2021 earnings has increased 1.4% to $1.41 per share over the past 60 days.
Zuora ZUO has been benefitting from rapid adoption of its cloud-based products and services and efficient cost management.
Additionally, significant contributions from its system integration partner base, which includes Accenture, Capgemini, Deloitte, EY and PwC, are major growth drivers. These companies are experiencing solid consumer demand for subscription and revenue automation, which in turn is expected to boost the expansion of Zuora’s enterprise clientele in 2021.
Zuora has a market cap of $1.5 billion. The stock is currently priced at $13.4 per share. Notably, the Zacks Consensus Estimate for 2021 loss has narrowed from 17 cents per share to 13 cents per share over the past 60 days.
Vertiv Holdings VRT provides digital infrastructure and continuity solutions. It offers hardware, software, analytics and ongoing services. Vertiv's capabilities in uninterruptible power supply, thermal management, power distribution, infrastructure monitoring and modular solutions are key catalysts for top-line growth in 2021.
The company’s collaboration with Honeywell HON will create an intelligent power management solution to empower data center operators with remote monitoring and maintenance option, apart from helping them to reduce costs, avoiding downtime and boosting power usage effectiveness.
Vertiv Holdings has a market cap of $5.9 billion. The stock is currently priced at $18.2 per share. Notably, the Zacks Consensus Estimate for 2021 earnings has increased 2.4% to 86 cents per share over the past 60 days.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Honeywell International Inc. (HON) : Free Stock Analysis Report
Himax Technologies, Inc. (HIMX) : Free Stock Analysis Report
CommScope Holding Company, Inc. (COMM) : Free Stock Analysis Report
Cloudera, Inc. (CLDR) : Free Stock Analysis Report
Zuora, Inc. (ZUO) : Free Stock Analysis Report
Vertiv Holdings Co. (VRT) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
