All three major U.S. indexes climbed Friday on the back of a solid jobs report. U.S. unemployment dipped to 3.5% in September from 3.7% in August, which marked a 50-year low. Nonetheless, as geopolitical tensions and global economic slowdown worries mount, Wall Street and Traders have placed a higher chance on additional interest rate cuts in 2019.
With this in mind, investors should likely continue to stay in stocks. So why not add a few solid low-priced picks to your portfolio. At Zacks, we do try to avoid labeling stocks as “cheap” or “expensive.” Instead, we opt to look beyond a stock’s face value, and our system puts an emphasis on earnings estimate revisions to find stocks that will hopefully be winners for investors.
Stocks trading under $10 can be more volatile than their pricier peers. But investors can still scoop up big returns with the right low-priced stocks. Today we found three stocks using our Zacks Stock Screener that fall into the broader technology sector that investors might want to buy as the fourth quarter of 2019 gets underway…
The Meet Group MEET
Prior Close: $4.00 USD
The Meet Group is a social media company that offers a portfolio of various dating and social entertainment apps, including MeetMe, Skout, and Lovoo. These apps are primarily focused on streaming video, mobile chat, photo sharing, and more. MEET shares soared roughly 23% Thursday after the company raised its third-quarter 2019 revenue guidance to between $52.0 million and $52.3 million, up from its previous $50.5 million to $51.0 million range. The firm pointed to video strength as part of the reason for its optimism and projects that its advertising business will be strong in the fourth quarter.
Looking ahead, our quarterly revenue estimates have not been updated to reflect the firm’s new guidance. But we should note that MEET’s fiscal 2019 sales were already projected to jump 17.7% to reach $210.27 million, with 2020 expected to come in 11.1% higher. Meanwhile, The Meet Group’s adjusted earnings are projected to jump 33.3% this year and another 18% in fiscal 2020. MEET stock is currently a Zacks Rank #2 (Buy) that boasts an “A” grade for both Growth and Value in our Style Scores system, and is trading at a discount against its industry. The recent positivity could help MEET shares climb after a significant post-Q1 selloff.
Telenav, Inc. TNAV
Prior Close: $4.75 USD
Telenav is a connected car and location-based services firm that works with global giants such as Ford F and AT&T T. The stock did tumble from over $10 per share in early September after one of its major clients, General Motors GM, announced that will start working with Google’s GOOGL connected-car tech in 2021. The firm did say in a statement that its contract with GM is still effective through model year 2025 and that GM’s announcement “does not alter the contract in any way. Telenav does not expect GM’s announcement to affect Telenav’s internal operating forecasts for fiscal years 2020 and 2021.”
Clearly, Wall Street fears that this will dent the company, but that impact might already be priced in, with its shares down over 50% since the September 5 announcement. Telenav still works with other firms, such as Toyota and makes money through its targeted advertising platform, utilized by the likes of Walmart WMT and Best Buy BBY. Our Zacks Consensus Estimates call for its upcoming quarter (Q1 2020) sales to surge 20%. Peeking ahead, fiscal 2020 and 2021 revenues are projected to jump 10.7% and 11.3%, respectively. This is expected to help TNAV jump from a projected adjusted loss of -$0.12 per share this year to +$0.16 in 2021. Telenav is currently a Zacks Rank #2 (Buy) that sports “A” grades for both Growth and Momentum.
Digital Turbine, Inc. APPS
Prior Close: $6.31USD
Digital Turbine connects OEMs, mobile operators, and publishers with advertisers and app developers. The firm announced in mid-August a partnership with Razer that will see Digital Turbine help the lifestyle-focused brand for gamers “power curated app recommendations to users of Razer Cortex Mobile enabled smartphones.” This could end up playing a significant role for Digital Turbine as the mobile gaming industry continues to boom. APPS shares have slipped recently, down 14% in the last month, but are still up 250% in 2019 and 370% during the last 12 months.
Looking ahead, the Austin, Texas-based company is projected to see its adjusted current-quarter (Q2 2020) earnings soar 300% on 32.3% higher revenue. The firm’s full-year EPS figure is then expected to surge 150% on 26.4% stronger sales. Digital Turbine is then expected to report 20.5% revenue growth in 2021 and 11.7% bottom-line expansion. Investors should also note that APPS has crushed our quarterly earnings estimates by an average of 125.00% in the trailing four periods. Digital Turbine is a Zacks Rank #1 (Strong Buy) right now, with “A” grades for Growth and Momentum, which helps it earn an overall “B” VGM score.
Leave a Comment