Stock-ing Stuffers: 5 High-Growth, Profitable Stocks Under 10 Dollars

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Looking for holiday deals? We found several stocks under 10 dollars that look poised for high growth.

Tis the season for down-to-the-wire shopping and lots of money spending. According to the National Retail Foundation's most recent holiday survey, 49.9% of holiday consumers plan to complete their shopping online in the last week before Christmas.

A late Thanksgiving that overlapped with Hanukkah has led to a shortened and more stressful holiday season, so we're taking a break from the holiday hoopla with a list of inexpensive, increasingly profitable stocks with long-term growth potential. It's the most wonderful time of the year, indeed.

Investing ideas

We began by creating a universe comprised of US stocks with rising diluted normalized earnings per share (EPS) for the past three consecutive years.

EPS refers to the amount of profit allocated per outstanding share of common stock. Diluted normalized EPS differs from normalized EPS by taking convertible securities into consideration. Examples of convertible securities include options, warrens, and convertible preferred shares that could be exercised, as well as lower net income. As a result, diluted normalized EPS tends to be both lower and more conservative than normalized EPS.

We then screened that group for stocks with 5-year projected earnings per share (EPS) growth above 15%. And for our final step, we narrowed down that group to stocks under 10 dollars. After all, those holiday gifts don't pay for themselves!

We were left with five stocks on our list.

Click on the interactive chart below to see sales data over time.

chart

Do you believe in the long-term growth potential of these stocks? Use this list as a starting point for your own analysis.

1. Lionbridge Technologies Inc. (LIOX, Earnings, Analysts, Financials): Provides language, development, and testing services.

Market cap at $335.71M , most recent closing price at $5.64.

Diluted normalized EPS increased from 0.01 to 0.07 during the first time interval (12 months ending 2010-12-31 vs. 12 months ending 2009-12-31).

For the second time interval, diluted normalized EPS increased from 0.07 to 0.07 (12 months ending 2011-12-31 vs. 12 months ending 2010-12-31).

And for the last time interval, the EPS increased from 0.07 to 0.27 (12 months ending 2012-12-31 vs. 12 months ending 2011-12-31).

EPS growth over the next 5 years at 20.00%.

2. InnerWorkings Inc. (INWK, Earnings, Analysts, Financials): Provides managed print and promotional procurement solutions to corporate clients in the United States.

Market cap at $371.92M, most recent closing price at $7.27.

Diluted normalized EPS increased from 0.12 to 0.19 during the first time interval (12 months ending 2010-12-31 vs. 12 months ending 2009-12-31).

For the second time interval, diluted normalized EPS increased from 0.19 to 0.28 (12 months ending 2011-12-31 vs. 12 months ending 2010-12-31).

And for the last time interval, the EPS increased from 0.28 to 0.35 (12 months ending 2012-12-31 vs. 12 months ending 2011-12-31).

EPS growth over the next 5 years at 24.38%.

3. General Communication Inc. (GNCMA, Earnings, Analysts, Financials): Provides communication services to residential and business customers under the GCI and Alaska Wireless brand names in Alaska.

Market cap at $406M, most recent closing price at $10.00.

Diluted normalized EPS increased from 0.06 to 0.16 during the first time interval (12 months ending 2010-12-31 vs. 12 months ending 2009-12-31).

For the second time interval, diluted normalized EPS increased from 0.16 to 0.2 (12 months ending 2011-12-31 vs. 12 months ending 2010-12-31).

And for the last time interval, the EPS increased from 0.2 to 0.23 (12 months ending 2012-12-31 vs. 12 months ending 2011-12-31).

EPS growth over the next 5 years at 16.00%.

4. Higher One Inc. (ONE, Earnings, Analysts, Financials): Provides technology and payment services to the higher education industry in the United States.

Market cap at $472.83M, most recent closing price at $10.08.

Diluted normalized EPS increased from 0.27 to 0.44 during the first time interval (12 months ending 2010-12-31 vs. 12 months ending 2009-12-31).

For the second time interval, diluted normalized EPS increased from 0.44 to 0.54 (12 months ending 2011-12-31 vs. 12 months ending 2010-12-31).

And for the last time interval, the EPS increased from 0.54 to 0.59 (12 months ending 2012-12-31 vs. 12 months ending 2011-12-31).

EPS growth over the next 5 years at 17.50%.

5. The Wendy's Company (WEN, Earnings, Analysts, Financials): Operates as a quick-service hamburger company in the United States.

Market cap at $3.34B, most recent closing price at $8.51.

Diluted normalized EPS increased from 0.06 to 0.12 during the first time interval (52 weeks ending 2011-01-02 vs. 52 weeks ending 2010-01-03).

For the second time interval, diluted normalized EPS increased from 0.12 to 0.15 (52 weeks ending 2012-01-01 vs. 52 weeks ending 2011-01-02).

And for the last time interval, the EPS increased from 0.15 to 0.24 (52 weeks ending 2012-12-30 vs. 52 weeks ending 2012-01-01).

EPS growth over the next 5 years at 21.23%.

(List compiled by Mary-Lynn Cesar. EPS data sourced from Yahoo! Finance. Quarterly sales data sourced from Zack's Investment Research. All other data sourced from Finviz.)

Analyze These Ideas: Getting Started



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 , Stocks , US Markets

Referenced Stocks: GNCMA , INWK , LIOX , ONE , WEN

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