Stocks have struggled for direction over the past few months, and that presents a certain amount of risk to investors right now. But those willing to meet that risk have watched valuations shrink and per-share price tags diminish, which could mean new buying opportunities for those with specific strategies.
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 ten stocks that are currently trading for under $20 per share. These stocks currently have seen positive earnings estimate revisions, and a variety of other factors make these companies stand out as having strong upside potential.
1. Cleveland-Cliffs (CLF)
Prior Close: $9.59
Cleveland-Cliffs is an iron ore mining company and key supplier of iron ore pellets to the steel industry. The firm’s CEO recently made negative headlines for lashing out at analysts, but that doesn’t necessarily change the fundamentals here. CLF sports a Zacks Rank #2 (Buy) and an “A” grade in the Value category of our Style Scores system. Earnings are expected to improve a whopping 248% this year, and estimates have moved up for next year, but investors are undervaluing the stock at just 5.3x forward 12-month earnings.
2. AVX Corporation (AVX)
Prior Close: $16.67
AVX is a global supplier of electronic components, primarily capacitors and connectors used in the automotive, mobile phone, and medical industries. The firm is majority owned by Kyocera and is a member of the Russell 2000. AVX holds a #1 (Strong Buy) coming off its impressive earnings beat, and growth prospects now look better than ever. In fact, earnings are projected to expand by 59% and 79% in the next two quarters. Plus, with a P/E of 11.4 and a P/S of 1.6, AVX looks to be reasonably priced.
3. Ericsson (ERIC)
Prior Close: $8.76
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 sports a Zacks Rank #1 (Strong Buy) and an “A” grade for Growth. Trading has been choppy since its strong beat last month, but the earnings trend is moving in the right direction, and shares should respond soon. Bottom-line growth is expected to hit triple-digit percentages over the next two quarters.
4. KT Corporation (KT)
Prior Close: $14.94
KT Corporation is a telecom services company based in South Korea. It is one of the country’s largest phone and internet providers. Shares of KT sport a Zacks Ranks #1 (Strong Buy) thanks to positive earnings estimate revisions. The stock also has an “A” grade for Value and is trading at just 11.6x earnings. KT presents a dividend yield of 2.6% and has a beta of 0.6, meaning that it could be an outlet for stability and income, which is not always found in low-priced stocks.
5. International Consolidated Airlines Group SA (ICAGY)
Prior Close: $15.38
ICAGY is the holding company for British Airways, Iberia, and several other international airlines. The stock is currently sporting a #1 (Strong Buy) and an “A” grade in our Value category. It has a P/E ratio of 5.7, which is a steep discount to the industry average of 12.9. High fuel costs battered airline stocks earlier this year, but recent declines in oil should make the earnings picture better here. There is some Brexit uncertainty in this stock, but the company is looking for special protection in case of a “no deal” and could rally hard if the situation is resolved.
6. Canadian Solar Inc. (CSIQ)
Prior Close: $16.49
Canadian Solar is a solar module producer. The company makes wafers, cells, portable home systems, battery chargers, and many other solar products. CSIQ has a #1 (Strong Buy), an “A” grade for Value, and “B” grades for Growth and Momentum. The stock has surged 25% in the past month but is still trading at just 6.7x earnings. CSIQ also has long-term projected earnings growth rate of 32%, with earnings growth expected to reach nearly 45% in the current fiscal year. Investors should also that the “Solar” industry is currently in the top 16% of the Zacks Industry Rank.
7. On Deck Capital, Inc. (ONDK)
Prior Close: 7.37
On Deck Capital provides an online platform that uses big data and analytics to source, underwrite, and fund loans to small businesses. The firm provides capital to dentists, restaurants, medical practices, and online companies. ONDK is a #1 (Strong Buy) with interesting Value and Growth characteristics. Shares are trading at just 14x earnings, but EPS growth rates have been staggering recently. Full-year estimates have ONDK’s bottom line surging from just a penny last year to $0.53 in 2018. Revenue growth is expected to be around 13% in the current and next year. Its P/S ratio, a key metric for smaller tech firms, is 1.5, which is a discount to the industry’s average of 1.9.
8. AU Optronics Corp. (AUO)
Prior Close: $4.10
AU Optronics is one of the world’s largest makers of LCD panels used for computers, monitors, TVs, cameras, and more. AUO has struggled for momentum this year, but the stock found a bottom and rallied 7% in the past month after beating earnings. Now, AUO has a #1 (Strong Buy) and is still looking undervalued. Shares have a P/E of just 10.3 and a P/S of 0.4. These are both steep discounts to the industry average. Plus, its industry is in the top 28% of our Zacks Industry Rank.
9. Altice USA, Inc. (ATUS)
Prior Close: $17.70
Altice USA is a spin-off of Netherlands-based Altice NV. The company provides cable TV services in 21 states. ATUS has had just over a year on U.S. exchanges but is looking attractive to our models. It currently has a Zacks Rank #1 (Strong Buy), “B” grades for Value and Momentum, and an “A” grade for Growth. Shares found a hard bottom in October’s selling and have since rallied 21%. Still, the stock has a P/S ratio of just 1.3. It also has a beta of 0.8, making it another rare low-price, low-volatility option.
10. Air France-KLM SA (AFLYY)
Prior Close: $10.25
Air France-KLM is the holding company for Air France, KLM, and a handful of other European airlines. The airline’s biggest challenge has been pilot pay strikes, but new CEO Ben Smith has a plan to cut costs, and the company’s latest union vote resulted in the defeat of its pro-strike leader. Moreover, AFLYY has a #1 (Strong Buy) and looks undervalued as fuel prices remain muted. The stock is trading at just 4.7x earnings and has a P/B ratio of 1.4.
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