Deal Or No Deal: 8 Undervalued Stocks Under 10 Dollars With Rising EPS

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By James Dennin for Kapitall

These undervalued stocks under 10 dollars all have EPS/Price mis-matches, which could signal more growth in the future.

We've written a lot about how good economic news can often be bad for stocks. Particularly in periods of historically low interest rates, like we're in now, the stock market usually declines on good news.

Good economic news usually signals that other assets classes will start to get more valuable.

That's possibly why the market has been so confused in the last couple of days. GDP numbers were pretty bad, and suggested slowing growth. As a result stocks are moving without much of a discernable pattern.

However that was also expected to a certain extent as the winter slowed consumer spending. In addition, the lingering situation in Ukraine has made predicting the Fed's next move even more difficult than usual.

Are things so bad that Janet Yellen could start to backtrack on the tapering program? Or will rates go up assuming the economy will start kicking over the summer?

If you're bullish on stocks going foward now's a good time to take advantage of valuations that have come down since January. We decided to screen for undervalued stocks under $10 dollars by looking for EPS/Price mis-matches.

Mis-matches happen when a company grows its earnings per share faster than its stock price. Since stocks trade heavily on earnings, a mis-match can often suggest that a stock might be undervalued. Starting with a universe of all the companies trading between $5-10, we screened for EPS/Price mismatches, and found 8. Click on the image to view data over time.

Are these stocks undervalued or on their way down? Use the list below to begin your analysis and let us know what you think in the comments.

1. SeaChange International Inc. (SEAC, Earnings, Analysts, Financials): Develops, manufactures, and markets digital video systems, as well as provides related services to cable system operators, and telecommunications and broadcast television companies worldwide. Market cap at $402.62M, most recent closing price at $12.27.

The EPS estimate for the company's current year increased from 0.32 to 0.35 over the last 30 days, an increase of 9.37%.

This increase came during a time when the stock price changed by -3.19% (from 10.36 to 10.03 over the last 30 days).

2. Skullcandy, Inc. (SKUL, Earnings, Analysts, Financials): Develops and distributes headphones and other audio accessories to retailers in the United States and to distributors in various countries worldwide. Market cap at $222.4M, most recent closing price at $8.01.

The EPS estimate for the company's current year increased from 0.12 to 0.13 over the last 30 days, an increase of 8.33%.

This increase came during a time when the stock price changed by -13.36% (from 9.73 to 8.43 over the last 30 days).

3. Rite Aid Corp. (RAD, Earnings, Analysts, Financials): Operates retail drugstores in the United States. Market cap at $6.13B, most recent closing price at $6.53.

The EPS estimate for the company's current year increased from 0.35 to 0.39 over the last 30 days, an increase of 11.43%.

This increase came during a time when the stock price changed by 4.22% (from 6.87 to 7.16 over the last 30 days).

4. Yamana Gold, Inc. (AUY, Earnings, Analysts, Financials): Engages in gold and other precious metals mining, and related activities, including exploration, extraction, processing, and reclamation. Market cap at $7.82B, most recent closing price at $10.38.

The EPS estimate for the company's current year increased from 0.32 to 0.35 over the last 30 days, an increase of 9.37%.

This increase came during a time when the stock price changed by -16.56% (from 9.54 to 7.96 over the last 30 days).

5. Concord Medical Services Holdings Limited (CCM, Earnings, Analysts, Financials): Operates a network of radiotherapy and diagnostic imaging centers in the People's Republic of China. Market cap at $132.02M, most recent closing price at $8.80.

The EPS estimate for the company's current year increased from 0.4 to 0.45 over the last 30 days, an increase of 12.5%.

This increase came during a time when the stock price changed by -10.42% (from 8.25 to 7.39 over the last 30 days).

6. Cumulus Media Inc. (CMLS, Earnings, Analysts, Financials): Engages in the acquisition, operation, and development of commercial radio stations in the United States. Market cap at $1.19B, most recent closing price at $6.62.

The EPS estimate for the company's current year increased from 0.41 to 0.45 over the last 30 days, an increase of 9.76%.

This increase came during a time when the stock price changed by 6.1% (from 6.23 to 6.61 over the last 30 days).

7. Commercial Vehicle Group Inc. (CVGI, Earnings, Analysts, Financials): Designs and manufactures integrated system solutions for the commercial vehicle markets worldwide. Market cap at $254.15M, most recent closing price at $8.82.

The EPS estimate for the company's current year increased from 0.31 to 0.34 over the last 30 days, an increase of 9.68%.

This increase came during a time when the stock price changed by 2.21% (from 9.06 to 9.26 over the last 30 days).

8. Covenant Transportation Group, Inc. (CVTI, Earnings, Analysts, Financials): Covenant Transportation Group, Inc., together with its subsidiaries, offers truckload transportation and brokerage services primarily in the continental United States. Market cap at $151.93M, most recent closing price at $10.22.

The EPS estimate for the company's current year increased from 0.45 to 0.49 over the last 30 days, an increase of 8.89%.

This increase came during a time when the stock price changed by -12.98% (from 11.25 to 9.79 over the last 30 days).

(List compiled by James Dennin. Monthly returns sourced from Zacks Investment Research.)



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Business , Stocks


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