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. All of these stocks currently have at least a Zacks Rank #2 (Buy), and a variety of other factors make these companies stand out as having strong upside potential.
1. FGL Holdings (FG)
Prior Close: $8.79
FGL is a holding company offering fixed annuities and life insurance products, forming after the merger of CF Corp. and Fidelity & Guaranty Life was completed late last year. The stock is sporting both a Zacks Rank #2 (Buy) and an “A” grade for Vale in our Style Scores system. FG is trading with a P/E of 7.8, which marks a discount to its industry average. Value investors will also love its P/B ratio of just 1.4. It was not a great start to the year for FG, but the stock bounced from its 52-week low and has since found support above the $8.60 level.
2. Cleveland-Cliffs Inc. (CLF)
Prior Close: $12.91
Cleveland-Cliffs is an iron ore mining company and key supplier of iron ore pellets to the steel industry. CLF sports a Zacks Rank #1 (Strong Buy) and “B” grades in both our Value and Growth categories. Earnings are expected to improve a whopping 248% this year, but investors are undervaluing the stock at just 7.4x forward 12-month earnings. Meanwhile, shares have surged more than 25% in the past month as value investors pile in.
3. Nikon Corp. (NINOY)
Prior Close: $19.19
Nikon is one of the most recognizable names in the world of cameras, camera lenses, and other optical instruments. NINOY holds a Zacks Rank #1 (Strong Buy) and sports interesting growth and momentum characteristics. For instance, the company is expected to see EPS growth of nearly 65% this year and 12% on a long-term, annualized basis. The stock has also reversed its fortunes recently, rebounding strongly off its 52-week lows to add about 23% in the past three months. An improving earnings outlook could inspire a continued rebound.
4. Tilly’s, Inc. (TLYS)
Prior Close: $18.47
Tilly’s is a specialty retailer popular among skateboarders and surfers, as well as trendy young fashion purveyors who love “streetwear” brands. Shopping at Tilly’s would yield everything from legacy apparel makers like The North Face and Adidas to forward-thinking brands such as LRG and Primitive. Tilly’s recently reported a great quarter and now has a Zacks Rank #1 (Strong Buy). Shares have added more than 60% in the past six months but are trading at just over 20x forward earnings. This is a hot retail stock to buy while it’s still cheap.
5. Armstrong Flooring, Inc. (AFI)
Prior Close: $18.53
Armstrong Flooring is engaged in the design and manufacture of flooring solutions. It was incorporated in 2016 after a spin-off from construction supplier Armstrong World Industries. Right now, the stock has a Zacks Rank #1 (Strong Buy), as well as an “A” grade in our Growth category. Shares skyrocketed after the company’s most recent earnings report, but this stock has room to surge higher on the back of 105% projected EPS growth. AFI also has a PEG of 2.0, so investors are getting a great price for that growth outlook.
6. Lenovo Group Ltd. (LNVGY)
Prior Close: $13.49
Lenovo is a consumer technology company focused on PCs and mobile devices. The world’s largest PC vendor as recently as 2015, this Chinese is a major player in domestic and foreign markets. LNVGY is sporting a Zacks Rank #2 (Buy) and could be a good fit for those seeking growth and value traits. Analysts are calling for Lenovo’s earnings to improve by 100% this fiscal year, but at just 18.2x forward earnings, the stock hardly looks expensive. This is also a strong income play with its 7.5% dividend yield right now.
7. Magic Software Enterprises Ltd. (MGIC)
Prior Close: $12.93
Magic Software is an Israeli enterprise software company that builds products to accelerate the process of deploying applications within existing systems. The stock has a Zacks Rank #2 (Buy), as well as an “A” grade for Value in our Style Scores system. Its P/E of 15.2 is a sharp discount to its industry average, and with its earnings outlook improving on positive analyst revisions, investors can clearly capture this sentiment at an attractive valuation. At current levels, MGIC also sports a dividend yield of 3.4%.
8. CNX Resources (CNX)
Prior Close: $14.05
CNX Resources is one of the largest independent natural gas exploration and production companies. It operates primarily in the major shale formations of the Appalachian basin. CNX is sporting a Zacks Rank #1 (Strong Buy) and is projected to see earnings growth of 193% in the current quarter and 588% in the current year. The stock also has an overall VGM grade of “B” and trades at just 18.5x forward earnings. CNX’s P/S ratio is a reasonable 1.5 right now.
9. Photronics, Inc. (PLAB)
Prior Close: $9.60
Photronics is of one the world’s leading producers of photomasks, which are high-precision quartz plates that contain images of electronic circuits. These photomasks are a piece in the production of computer semiconductors and flat-panel displays. Photronics currently holds a Zacks Rank #2 (Buy) and “A” grades in our Value and Growth categories. Shares have soared 22% in the past three months and could march higher as estimate revisions continue coming in. And even with this surge, the stock’s valuation of 16.4x is within a reasonable range.
10. The Habit Restaurants, Inc. (HABT)
Prior Close: $15.85
The Habit Burger is a fast casual restaurant chain known for its char-grilled burgers, sandwiches, and salads. The chain is based in California and notably popular on the West Coast. HABT sports an “A” grade for Growth and a “B” grade for Value in addition to its Zacks Rank #2 (Buy). This trendy spot has an interesting revenue growth trend, with sales expected to improve by 19% this year and 13% next year. Plus, the stock has a P/S of 1.1, so its revenue picture appears to be reasonably priced.
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Nikon Corp. (NINOY) : Free Stock Analysis Report
Armstrong Flooring, Inc. (AFI) : Free Stock Analysis Report
CNX Resources Corporation. (CNX) : Free Stock Analysis Report
Lenovo Group Ltd. (LNVGY) : Free Stock Analysis Report
Magic Software Enterprises Ltd. (MGIC) : Free Stock Analysis Report
Cleveland-Cliffs Inc. (CLF) : Free Stock Analysis Report
Tilly's, Inc. (TLYS) : Free Stock Analysis Report
The Habit Restaurants, Inc. (HABT) : Free Stock Analysis Report
Photronics, Inc. (PLAB) : Free Stock Analysis Report
FGL Holdings (FG) : Free Stock Analysis Report
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