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Stocks just posted one of their best months in recent memory, as investors piled back into discounted stocks just after the Christmas Eve lows. Calling a bottom on a selloff is a difficult task, but those willing to meet that risk were rewarded with lower valuations and per-share price tags. It’s also likely that some with specific strategies are still finding plenty of buying opportunities.
Here at Zacks, we don’t generally classify stocks as “cheap” or “expensive” based on their share price. Rather than looking at a 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. On Deck Capital, Inc.
Prior Close: $7.52
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 13x earnings, but EPS growth rates have been staggering recently. For the soon-to-be-reported quarter, On Deck is expected to post earnings of $0.17 per share, up from just $0.10 last year. Moreover, sales 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 1.8.
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) as well as an “A” grade in the Value category of our Style Scores system. Shares have rallied over 14% in the past month, but the valuation is still in check. For instance, ATUS has a reasonable P/S of just 1.5. It also has a beta of 1.0, making it a rare low-price, low-volatility option.
BlackBerry is best known to the public for its once-iconic brand of smartphones, but the company ditched hardware manufacturing recently and now serves as an enterprise software and services company. This transition is finally getting the attention of analysts, and positive earnings estimates have earned the stock a Zacks Rank #1 (Strong Buy). The company has also managed to surpass EPS estimates in 12 consecutive quarters. Still, this is one for the long haul, with earnings expected to expand at an annualized rate of nearly 19% over the next three to five years.
4. Rent-A-Center, Inc.
Prior Close: $17.50
Rent-A-Center is a leader in the rent-to-own retail segment. The company just exited a proposed merger deal, and after a brief pullback from the deal price, the stock has actually surged higher. Now, with its #1 (Strong Buy) rank, RCII looks to move even higher. For instance, RCII has a P/E ratio of just 9.9, which is a discount to the industry’s 12.5 average. It looks like analysts and investors are in agreement that this retailer is better off without the deal, and that’s a great sign heading forward.
Funko makes pop culture-tinged toys and collectibles. It is best known for its Pop! vinyl figures, a line of bobblehead-sized toys featuring original and licensed characters. FNKO shares are up over 150% since the company’s IPO in late 2017, and it doesn’t look to be stopping now. Funk has a Zacks Rank #2 (Buy) and a “B” grade in our Growth category. For the soon-to-be-reported quarter, earnings are expected to be up 55%, bringing full-year growth to nearly 92%. Moreover, analysts have slapped Funko with a long-term earnings growth target of 22%. The stock has a PEG of just 0.8, so investors are getting a great price for that growth right now.
JetBlue is a low-fare, low-cost passenger airline based in New York's John F. Kennedy International Airport. The company carries more than 38 million customers a year to 101 cities in the U.S., Caribbean, and Latin America with an average of 1,000 daily flights. JBLU is a #2 (Buy)-rated stock right now. As of late, it has benefitted from lower fuel prices than during the peak summer months. JetBlue is also pulling off impressive cost-reduction initiatives. It will expand its capacity this year, ushering in even more growth opportunity. Finally, the stock is trading at just over 8.5x earnings, which marks a discount to the airline industry’s average.
Radian Group provides private mortgage insurance and risk management services to mortgage lenders nationwide. RDN has a Zacks Rank #1 (Strong Buy) rating. It is expected to report earnings next week, and analysts are looking for sturdy bottom-line growth of 29%. Earnings estimates for the period have also trended higher recently, suggesting bullish sentiment ahead of the report. Radian hasn’t missed EPS estimates in nearly two years. The stock has rallied more than 24% since its Christmas Eve low and should keep driving forward on the back of a healthy report.
Steelcase is a designer and manufacturer of high-quality office furniture. The stock is one of a few dividend-paying options on this list. It yields more than 3.3% right now, and management has a solid track record of increasing the payout. Steelcase also has a payout ratio of around 50%, which suggests its dividend is relatively safe, especially as earnings growth for the current fiscal year is expected to reach nearly 30%. SCS sports a Zacks rank #1 (Strong Buy).
9. AVX Corporation
Prior Close: $17.75
AVX Corporation is a U.S.-based manufacturer of passive electronic components. It primarily makes and sells capacitors and connectors for automotive braking, cell phones, and medical devices. Earnings estimates are on the rise for the current fiscal year ending in March, as well as the following fiscal year. This has earned the stock a #1 (Strong Buy) listing. AVX also has an “A” grade in the Value category of our Style Scores system. It trades at under 11.5x earnings, which is a noticeable discount to its industry’s average.
10. Lumber Liquidators Holdings, Inc.
Prior Close: $11.75
Lumber Liquidators is a retailer of hardwood flooring. It owns about 400 stores around the nation. LL is sporting a Zacks Rank #2 (Buy) and an “A” grade in our Momentum category. The stock has moved nearly 28% higher in the past month. The category also factors in earnings momentum. Earnings estimates for LL’s ongoing quarter are up over 43% in the past month alone. EPS growth is now expected to be 28% for that period. Growth for the soon-to-be-reported quarter is projected to be even hotter.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
Top 10 Stocks Under $20
Stocks just posted one of their best months in recent memory, as investors piled back into discounted stocks just after the Christmas Eve lows. Calling a bottom on a selloff is a difficult task, but those willing to meet that risk were rewarded with lower valuations and per-share price tags. It’s also likely that some with specific strategies are still finding plenty of buying opportunities.
Here at Zacks, we don’t generally classify stocks as “cheap” or “expensive” based on their share price. Rather than looking at a 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. On Deck Capital, Inc.
Prior Close: $7.52
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 13x earnings, but EPS growth rates have been staggering recently. For the soon-to-be-reported quarter, On Deck is expected to post earnings of $0.17 per share, up from just $0.10 last year. Moreover, sales 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 1.8.
2. Altice USA, Inc. (ATUS - Free Report)
Prior Close: $19.64
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) as well as an “A” grade in the Value category of our Style Scores system. Shares have rallied over 14% in the past month, but the valuation is still in check. For instance, ATUS has a reasonable P/S of just 1.5. It also has a beta of 1.0, making it a rare low-price, low-volatility option.
3. BlackBerry Limited (BB - Free Report)
Prior Close: $8.07
BlackBerry is best known to the public for its once-iconic brand of smartphones, but the company ditched hardware manufacturing recently and now serves as an enterprise software and services company. This transition is finally getting the attention of analysts, and positive earnings estimates have earned the stock a Zacks Rank #1 (Strong Buy). The company has also managed to surpass EPS estimates in 12 consecutive quarters. Still, this is one for the long haul, with earnings expected to expand at an annualized rate of nearly 19% over the next three to five years.
4. Rent-A-Center, Inc.
Prior Close: $17.50
Rent-A-Center is a leader in the rent-to-own retail segment. The company just exited a proposed merger deal, and after a brief pullback from the deal price, the stock has actually surged higher. Now, with its #1 (Strong Buy) rank, RCII looks to move even higher. For instance, RCII has a P/E ratio of just 9.9, which is a discount to the industry’s 12.5 average. It looks like analysts and investors are in agreement that this retailer is better off without the deal, and that’s a great sign heading forward.
5. Funko, Inc. (FNKO - Free Report)
Prior Close: $17.34
Funko makes pop culture-tinged toys and collectibles. It is best known for its Pop! vinyl figures, a line of bobblehead-sized toys featuring original and licensed characters. FNKO shares are up over 150% since the company’s IPO in late 2017, and it doesn’t look to be stopping now. Funk has a Zacks Rank #2 (Buy) and a “B” grade in our Growth category. For the soon-to-be-reported quarter, earnings are expected to be up 55%, bringing full-year growth to nearly 92%. Moreover, analysts have slapped Funko with a long-term earnings growth target of 22%. The stock has a PEG of just 0.8, so investors are getting a great price for that growth right now.
6. JetBlue Airways Corporation (JBLU - Free Report)
Prior Close: $17.99
JetBlue is a low-fare, low-cost passenger airline based in New York's John F. Kennedy International Airport. The company carries more than 38 million customers a year to 101 cities in the U.S., Caribbean, and Latin America with an average of 1,000 daily flights. JBLU is a #2 (Buy)-rated stock right now. As of late, it has benefitted from lower fuel prices than during the peak summer months. JetBlue is also pulling off impressive cost-reduction initiatives. It will expand its capacity this year, ushering in even more growth opportunity. Finally, the stock is trading at just over 8.5x earnings, which marks a discount to the airline industry’s average.
7. Radian Group Inc. (RDN - Free Report)
Prior Close: $19.24
Radian Group provides private mortgage insurance and risk management services to mortgage lenders nationwide. RDN has a Zacks Rank #1 (Strong Buy) rating. It is expected to report earnings next week, and analysts are looking for sturdy bottom-line growth of 29%. Earnings estimates for the period have also trended higher recently, suggesting bullish sentiment ahead of the report. Radian hasn’t missed EPS estimates in nearly two years. The stock has rallied more than 24% since its Christmas Eve low and should keep driving forward on the back of a healthy report.
8. Steelcase Inc. (SCS - Free Report)
Prior Close: $16.50
Steelcase is a designer and manufacturer of high-quality office furniture. The stock is one of a few dividend-paying options on this list. It yields more than 3.3% right now, and management has a solid track record of increasing the payout. Steelcase also has a payout ratio of around 50%, which suggests its dividend is relatively safe, especially as earnings growth for the current fiscal year is expected to reach nearly 30%. SCS sports a Zacks rank #1 (Strong Buy).
9. AVX Corporation
Prior Close: $17.75
AVX Corporation is a U.S.-based manufacturer of passive electronic components. It primarily makes and sells capacitors and connectors for automotive braking, cell phones, and medical devices. Earnings estimates are on the rise for the current fiscal year ending in March, as well as the following fiscal year. This has earned the stock a #1 (Strong Buy) listing. AVX also has an “A” grade in the Value category of our Style Scores system. It trades at under 11.5x earnings, which is a noticeable discount to its industry’s average.
10. Lumber Liquidators Holdings, Inc.
Prior Close: $11.75
Lumber Liquidators is a retailer of hardwood flooring. It owns about 400 stores around the nation. LL is sporting a Zacks Rank #2 (Buy) and an “A” grade in our Momentum category. The stock has moved nearly 28% higher in the past month. The category also factors in earnings momentum. Earnings estimates for LL’s ongoing quarter are up over 43% in the past month alone. EPS growth is now expected to be 28% for that period. Growth for the soon-to-be-reported quarter is projected to be even hotter.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>