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.
Today we've highlighted five stocks that are currently trading for under $10 per share. These stocks are also showing signs for solid growth throughout 2017, and all of them currently hold a Zacks Rank #1 (Strong Buy).
1. Molecular Templates Inc. (MTEM)
Prior Close: $5.85
Molecular Templates is a developer of next-generation immunotoxins called Engineered Toxin Bodies for the treatment of cancers and other serious diseases. The company is currently sporting an "A" grade for Growth in our Style Scores system, which is underscored by its expected EPS growth of 72.5% in the current fiscal year. Molecular Templates merged with Threshold Pharmaceuticals earlier this year, and the new company is hoping to benefit from improved efficiencies. The stock has gained nearly 20% year-to-date and is looking to continue its momentum of eight-straight earnings beats.
2. Mazda Motor Corp. (MZDAY)
Prior Close: $7.34
Mazda Motor Corp. engages in the manufacture and sale of passenger cars, commercial vehicles and automotive parts. Interestingly enough, the "Automotive - Foreign" industry is currently in the top 2% of our Zacks Industry Rank, and Mazda is currently one of the stronger stocks in this group. Shares have gained about 7% over the past 12 weeks and Mazda is also displaying "A" grades for Value and Growth. Earnings are expected to grow by over 18% this year, but the company's Forward PE is still just 7.56. Mazda also has a better-than-industry-average RoE, and its current P/E and P/B ratios also come in better than its peers.
3. PFSweb, Inc. (PFSW)
Prior Close: $7.91
PFSWeb is a provider of transaction management services for both traditional commerce and e-commerce companies. After posting two strong earnings beats in a row, PFSWeb has witnessed two positive revisions to its full-year estimates. Now, we expect to see the company record EPS growth of more than 263% this fiscal year. The stock also has "A" grades for Value and Growth, as well as an overall VGM grade of "A." Moreover, with a beta rating of just 0.88, PFSWeb should hypothetically be less volatile than the market average, which is especially intriguing given its impressive growth prospects.
4. IEC Electronics Corp. (IEC)
Prior Close: $4.27
IEC Electronics is a provider of electronic contract manufacturing services, including the circuit cards, cable loads, and wire harness assemblies. The company is currently sitting near the top of an "Electronics - Miscellaneous Components" industry that is in the top 11% of the Zacks Industry Rank right now. IEC has also soared more than 18.5% over the past 12 weeks. Furthermore, the company is coming off a massive earnings beat of 800%, and its beta rating of 0.27 should make investors feel particularly comfortable with its low volatility.
5. Neos Therapeutics (NEOS)
Prior Close: $8.30
Neos Therapeutics is engaged in the development and sale of ADHD medicines, including its brand-new product, an extended-release tablet known as Cotempla XR-ODT. The company has surpassed our consensus earnings estimates in four-straight quarters, and although we expect to see it post EPS growth of nearly 42% this fiscal year, the real story here is its strong sales growth. In fact, our current consensus revenue estimates are calling for sales growth of 231% this fiscal year and 255% next fiscal year. This strong growth should help the stock continue its strong momentum, as it has already gained more than 40% year-to-date.
Bottom Line
A stock's market price is certainly not the most important factor to consider when considering whether or not to add it to your portfolio, and sales and earnings growth projections can prove to be tough to live up to.
Nevertheless, we can always use Zacks' proven methods of finding quality stocks, and these five companies just happen to be showing strength while also trading for under $10 per share. If you would like to check out more of these low-priced stocks, look no further than our Stocks Under $10 portfolio service!
Want morestock market analysisfrom this author? Make sure to follow @ Ryan_McQueeney on Twitter!
Zacks' 10-Minute Stock-Picking Secret
Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.
But here's something even more remarkable: You can master this proven system without going to a single class or seminar. And then you can apply it to your portfolio in as little as 10 minutes a month. Learn the secret >>
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
PFSweb, Inc. (PFSW): Free Stock Analysis Report
Mazda Motor Corporation (MZDAY): Free Stock Analysis Report
IEC Electronics Corp. (IEC): Free Stock Analysis Report
Neos Therapeutics, Inc. (NEOS): Free Stock Analysis Report
Threshold Pharmaceuticals, Inc. (MTEM): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
