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: $8.92
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 Momentum in our Style Scores system. Still, FG is trading with a P/E of 7.9, 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 shares have bounced off their 52-week low and have added more than 8% in the past two months.
2. Carrols Restaurant Group, Inc. (TAST)
Prior Close: $16.25
Carrols is an American franchisee company and is the largest Burger King franchisee in the world. The company owns more than 800 Burger King locations across 20 U.S. states. TAST is a Zacks Rank #2 (Buy) stock with an “A” grade the Growth category of our Style Scores system. Carrols is projected to witness EPS growth of 80% in 2018, and that earnings growth will help its balance sheet. TAST could also be a momentum play, as the stock has gained more than 25% in the trailing 12 weeks.
3. Nikon Corp. (NINOY)
Prior Close: $18.32
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 57% this year and 12% on a long-term, annualized basis. The stock has also reversed its fortunes recently, bouncing strongly off its 52-week lows to add about 21% in the past month and a half. An improving earnings outlook could inspired a continued rebound.
4. McDermott International, Inc. (MDR)
Prior Close: $19.65
McDermott International is an engineering company focused on upstream field developments in the energy industry. It is a legacy name in the rig business and has been around for 95 years. MDR is currently a Zacks Rank #1 (Strong Buy). It is logical to think that continued expansion of the U.S. energy industry is a catalyst for McDermott’s future, but the stock does look undervalued now, too. Shares are trading at jut 13x earnings, a steep discount to the industry average, while McDermott is generating a much-better-than-average $3.13 in cash per share.
5. Armstrong Flooring, Inc. (AFI)
Prior Close: $17.62
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 “A” grades for Growth and Momentum. 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 1.9, so investors are getting a great price for that growth outlook.
6. Lenovo Group Ltd. (LNVGY)
Prior Close: $12.84
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 17.4x forward earnings, the stock hardly looks expensive. This is also a strong income play with its 7.8% dividend yield right now.
7. Magic Software Enterprises Ltd. (MGIC)
Prior Close: $9.05
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 and PEG of 2.1 are both sharp discounts to their respective industry averages, and with its earnings outlook improving on positive analyst revisions, investors can clearly capture this sentiment at an attractive valuation.
8. Photronics, Inc. (PLAB)
Prior Close: $10.80
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 Momentum categories. Shares have soared 20% in the past month and could march higher as estimate revisions continue coming in. And even with this surge, the stock’s valuation of 18.5x is within a reasonable range.
9. The Habit Restaurants, Inc. (HABT)
Prior Close: $16.20
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 “A” grades for Growth and Momentum 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 1.2, so its revenue picture appears to be reasonably priced.
10. Bridgepoint Education, Inc. (BPI)
Prior Close: $12.75
Bridgepoint Education is a provider of for-profit education services, including assessment software products and two online universities, Ashford University and
University of the Rockies. BPI has been soaring recently, adding about 85% in the past 12 weeks. Still, its Zacks Rank #1 (Strong Buy) implies that more gains could come soon. Bridgeport just crushed earnings estimates by more than 250% last quarter, and now its forward-looking outlook is improving.
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Nikon Corp. (NINOY) : Free Stock Analysis Report
Armstrong Flooring, Inc. (AFI) : Free Stock Analysis Report
Lenovo Group Ltd. (LNVGY) : Free Stock Analysis Report
Magic Software Enterprises Ltd. (MGIC) : Free Stock Analysis Report
McDermott International, Inc. (MDR) : Free Stock Analysis Report
Carrols Restaurant Group, Inc. (TAST) : Free Stock Analysis Report
The Habit Restaurants, Inc. (HABT) : Free Stock Analysis Report
Bridgepoint Education, Inc. (BPI) : Free Stock Analysis Report
Photronics, Inc. (PLAB) : Free Stock Analysis Report
FGL Holdings (FG) : Free Stock Analysis Report
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