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. We are also keenly aware of the latest sector trends and make sure to cover all of the hottest industries.
Today we've highlighted three stocks that fall into the broad "technology" sector. Each of these three stocks is currently trading for less than $10 per share and holds a Zacks Rank #2 (Buy) or better. Take a look at the strong estimate revision activity and other factors that make these tech companies stick out right now:
1. IEC Electronics Corp. ( IEC )
Prior Close: $6.50
IEC Electronics is a provider of electronic contract manufacturing services, including circuit cards, cable loads, and wire harness assemblies. The stock obviously sticks out because of its Zacks Rank #1 (Strong Buy), but investors might also believe it is undervalued at current share prices for a number of other reasons.
Notably, IEC is trading at just 13x forward earnings, which is sharp discount from its industry's average of 19.6x. Meanwhile, IEC has a P/S ratio of 0.6, which is also a discount to its industry peers. We should also note that IEC is expected to witness quadruple-digit EPS growth in 2018, and its earnings estimates have trended significantly higher over the past quarter.
2. 21Vianet Group, Inc. ( VNET )
Prior Close: $9.91
21Vianet is one of China's leading carrier-neutral internet data center services providers. The firm provides hosting and related services, managed network services, and cloud computing infrastructure. VNET is currently holding a Zacks Rank #2 (Buy) and looks like an interesting pick for anyone trying to find strong Chinese tech stocks.
Shares have added a staggering 54% in the past three months but could break higher if 21Vianet lives up to its growth expectations, with current estimates calling for earnings to improve by 83% in 2018. Meanwhile, the company is seeing cash flow growth of 103% right now. Still, with the stock sporting a P/S ratio of just 2.2, investors are clearly getting a solid price at the moment.
3. Vuzix Corporation ( VUZI )
Prior Close: $7.80
Vuzix is a supplier of smart-glasses and augmented reality (AR) technologies and products for the consumer and enterprise markets. Its wearable displays are used for 3D gaming, manufacturing training, and military tactical equipment. VUZI is a obviously a member of a trendy growth industry, but the stock is also interesting right now due to its Zacks Rank #2 (Buy).
Vuzix is still in the red, but the company is inching toward profitability and is expected to improve EPS figures by 31% this year and 29% next year. Meanwhile, revenue growth is expected to touch nearly 200% in 2018 and 93% in 2019.
New products and mainstream adaption should continue to fuel these estimates. VUZI still feels like a speculative growth stock that could be volatile, but an improving outlook is signaling that now is a solid time to buy.
A stock's market price is not a clear indicator of whether it is a good investment. However, the nice thing about the Zacks Rank is that it can be applied to stocks of any price. For smaller investors looking to find solid tech stocks at lower prices, this list is a great place to start.
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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 21Vianet Group, Inc. (VNET): Free Stock Analysis Report Vuzix Corporation (VUZI): Free Stock Analysis Report IEC Electronics Corp. (IEC): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research