Deal or no deal: Three undervalued stocks under 5 dollars with EPS growth

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By James Dennin for Kapitall.

US stocks retreated this week , as consumer confidence unexpectedly fell.

The S&P has had a pretty good year so far, climbing about 4% and quickly recovering from a large sell-off of small-cap and tech stocks. Concerns about Ukraine have started to abate as well, putting to rest geopolitical woes. 

One indication of growing confidence is the price of gold, which had its worst week of the year. Gold prices had climbed about 8% through April. But growing stability in Europe decreased the allure of the haven asset

For our screen today, we decided to look for undervalued stocks that were trading at steep discounts and had share prices of less than $5. Regardless of how we oriented the screen, we saw lots of companies involved in gold. 

All three of the stocks on our list have experienced earnings growth that outpaced growth in the share price. Sometimes earnings grow while a stock price declines. Since stocks  mostly trade on earnings, this is called an EPS/Price mis-match. 

Two of the three stocks in our screen work in gold, indicating that now could be a good time for investors looking to snap up some leverage on gold at a nice discount.

Do you think these companies are undervalued? Use the list below to begin your analysis and let us know what you think in the comments.

Click on the interactive chart to view data over time. 

1. Harmony Gold Mining Co. Ltd. ( HMY , Earnings , Analysts , Financials ): Engages in underground and surface gold mining operations in South Africa and Papua New Guinea. Market cap at $1.14B, most recent closing price at $2.61.  

The EPS estimate for the company's current year increased from 0.16 to 0.18 over the last 30 days, an increase of 12.5%.

This increase came during a time when the stock price changed by -8.9% (from 3.37 to 3.07 over the last 30 days).

2. IAMGOLD Corp. ( IAG , Earnings , Analysts , Financials ): Engages in the exploration, development, and production of mineral resource properties worldwide. Market cap at $1.14B, most recent closing price at $3.04.  

The EPS estimate for the company's current year increased from 0.15 to 0.16 over the last 30 days, an increase of 6.67%.

This increase came during a time when the stock price changed by -8.27% (from 3.75 to 3.44 over the last 30 days).  

3. Teekay Tankers Ltd. ( TNK , Earnings , Analysts , Financials ): Engages in the ownership and operation of oil tankers. Market cap at $302.92M, most recent closing price at $3.62.  

The EPS estimate for the company's current year increased from 0.16 to 0.17 over the last 30 days, an increase of 6.25%.

This increase came during a time when the stock price changed by -8.09% (from 4.08 to 3.75 over the last 30 days).  

(List compiled by James Dennin. Monthly returns sourced from Zacks Investment Research. EPS data sourced from Yahoo! Finance.)

Kapitall Wire is a division of New Kapitall Holdings, LLC. Kapitall Generation, LLC is a wholly owned subsidiary of New Kapitall Holdings, LLC. Kapitall Wire offers free investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by New Kapitall Holdings, LLC, and its affiliate companies.


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.



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 , Stocks

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