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 a Zacks Rank #1 (Strong Buy), and a variety of other factors make these companies stand out as having strong upside potential.
1. JSR Corp. (JSCPY)
Prior Close: $19.05
JSR Corp. engages in the manufacture and sale of synthetic rubber and chemical materials. This Tokyo-based company is showing signs of being undervalued, as its P/E ratio of 14.65 and P/S ratio of 1.20 are both well below their respective industry averages. JSR is also expected to improve its EPS figures by 13% this year, on the back of respectable 4.4% sales growth. The company appears to be a strong pick in our “Chemical – Plastic” group, which currently sits in the top 8% of the Zacks Industry Rank.
2. Konica Minolta (KNCAY)
Prior Close: $18.43
Konica Minolta is engaged in the manufacture and sale of imaging products including printers, lenses, and display materials. With a P/E ratio of 16.03, a P/S ratio of 0.52, and a P/B ratio of 0.96, KNCAY is showing strong signs of being undervalued right now. The stock is also sporting a beta rating of just 0.66, which means that it should hypothetically be less volatile than the market average. Overall, the company is sporting a VGM grade of “B,” which pairs well with its strong Zacks Rank and solid valuation metrics.
3. Rosetta Stone (RST)
Prior Close: $11.06
Rosetta Stone is a leading provider of technology-based language learning solutions consisting of software, online services and audio practice tools. A series of better-than-expected earnings reports has helped the stock gain some momentum, and shares have now moved more than 20% higher over the past 12 weeks. Rosetta Stone is still in the red, but the company looks to improve its EPS figures by nearly 55% this fiscal year. That expansion is expected to continue next year, with current estimates calling for EPS to improve another 52% in the period. Overall, the stock is sporting an “A” grade for Growth and a “B” grade for Momentum.
4. Sucampo Pharmaceuticals (SCMP)
Prior Close: $10.55
Sucampo is an emerging pharmaceutical company focused on drugs based on prostones, a class of compounds derived from functional fatty acids. The company is really interesting because of its cash flow. Right now, Sucampo is generating $2.41 in cash per share and growing its cash flow 106%, both of which significantly outpace their respective industry averages. The stock is also sporting a P/E ratio of 9.24 and a P/S ratio of 1.96, so it could be attractive to value investors. Overall, SCMP is rocking an “A” grade in the weighted-average VGM category.
5. South32 Ltd. (SOUHY)
Prior Close: $12.53
South32 is a natural resources company which primarily produces alumina, aluminum, coal, manganese, nickel, silver, lead and zinc. The “Mining – Miscellaneous” group is in the top 32% of the Zacks Industry Rank and heating up, and South32 has been one of its strongest stocks this year. What’s more, the company is sporting an overall VGM grade of “A” and shows strong valuation and growth metrics. Investors should look for South32 to post EPS growth of 16% this year, and management is generating cash flow growth of nearly 110% right now. What’s more, with a 3.67% dividend, this stock is also a strong income play.
6. Telekom Austria (TKAGY)
Prior Close: 18.63
Telekom Austria is the principal provider of fixed, mobile, data and Internet services in Austria. This stock is unique on this list because of the company’s overall financial stability. TKAGY has an RoE of 15.5% and a net margin of 10%, and management is generating cash flow growth of 7.3%. This is all helping the company improve its top and bottom lines. Also, TKAGY offers a respectable 2.28% dividend. This stock is also an interesting momentum pick and has soared nearly 60% over the past year.
7. Groupon (GRPN)
Prior Close: $5.47
In the midst of a transition to a marketplace-first focus, Groupon is looking to solidify a strong future for its business right now. Our current consensus estimates are calling for earnings growth to eclipse 229% by the end of fiscal 2017, and that expansion is expected to continue with EPS growth of 50% in the next fiscal year. The company is on the cusp of consistent profitability, and its revenue figures are already impressive. In fact, with a P/S ratio of 1.05, Groupon’s sales are clearly strong for a young tech company.
8. Westell Technologies (WSTL)
Prior Close: $3.95
Westell Technologies designs a broad range of digital and analog products used by telcos to deliver services, primarily over telephone wires. The stock jumps off the page because of its comparatively impressive P/E ratio of 16.91 and P/S ratio of 0.96. It’s also worth noting that Westell has crushed earnings estimates this year and is on pace to improve its EPS figures by nearly 200%. The stock has also gained more than 50% year-to-date, making it an intriguing pick for momentum investors.
9. Sonus Networks (SONS)
Prior Close: $7.31
Sonus Networks is a leading provider of voice infrastructure products for the new public network, and the company offers a variety of cloud-based, VoIP, and IP-based communications solutions. Investors are looking for consistent top and bottom line expansion here. Our current consensus estimates are projecting EPS growth of 22% this year and 25% next year, with sales projections calling for revenue growth of 30% this year and 90% next year. Still, the stock is sporting a P/E of 18.00, and with a PEG ratio of 1.50, investors are getting a decent price for this earnings growth.
10. Volvo AB (VLVLY)
Prior Close: $18.75
Volvo AB is the parent company of the Volvo Group, which is a manufacturer of trucks, buses, construction equipment, diesel engines, and marine and industrial engines. For a company this size, the fact that our consensus estimate is calling for EPS growth of 63% this year is quite impressive. On top of this, momentum investors will notice that Volvo has soared more than 80% over the past year. The company also operates with a net margin of 6.5% and an RoE of 21%, both of which crush their respective industry averages. Overall, Volvo is sporting an “A” grade in our weighted-average VGM category.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>
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
Groupon, Inc. (GRPN) : Free Stock Analysis Report
Sonus Networks, Inc. (SONS) : Free Stock Analysis Report
Westell Technologies, Inc. (WSTL) : Free Stock Analysis Report
Telekom Austria AG (TKAGY) : Free Stock Analysis Report
Volvo Ab (VLVLY) : Free Stock Analysis Report
Rosetta Stone (RST) : Free Stock Analysis Report
Sucampo Pharmaceuticals, Inc. (SCMP) : Free Stock Analysis Report
South32 Ltd. (SOUHY) : Free Stock Analysis Report
Konica Minolta Inc. (KNCAY) : Free Stock Analysis Report
JSR CP UNSP ADR (JSCPY) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research