3 âStrong Buyâ stocks under $ 10 that are about to be released
Let’s talk a bit about growth and potential. The two are not always the same, but they are both essential to a successful investment. The goal of all equity investing, after all, is to achieve growth – and that means finding stocks with the highest potential. It is natural to look to the renowned giants who make the headlines; they have huge stock valuations and made their first investors very happy. But there is an unfortunate truism in the markets, based on the iron rules of mathematics, that the more a company grows, the less likely it is to post big returns. A $ 200 million company is much more likely to double in value than it is for a $ 200 billion giant. And that brings us to small cap stocks. For investors looking for the best combination of high growth potential and low entry cost, small caps may be the perfect fit. We used the TipRanks database to find several that fit a profile: a market cap of less than $ 400 million and a stock price of less than $ 10. Better yet, these small-cap tickers benefit from consensus Strong Buy ratings from the analyst community and have strong upside potential. PowerFleet, Inc. (PWFL) The Internet of Things is transforming a multitude of industries, from factories and warehouses to fleets of trucks. PowerFleet, the first small cap stock we are reviewing, applies IoT and M2M technology to the security, control, tracking and management of high-end assets including semi-trailers, containers, industrial trucks and freight, vehicles, and truck fleets. PowerFleet 1Q revenue was in line with the prior quarter and included improved earnings. At the top line, reported revenue of $ 29 million was only 1.3% lower than the fourth quarter result. The reported 9-cent loss in EPS was a 25% improvement over the 12-cent loss reported in the previous quarter. Year over year, EPS has improved by 40%. Earlier this month, PowerFleet signed two new major contracts. On May 10, the company announced a 4-year contract with the Israel Police to implement a fleet management system and driving solution for more than 7,500 vehicles of 61 different types. The contract includes a renewal option for 4 years. Two days later, PowerFleet announced a smaller deal with Alabama-based White Oak Transportation to provide tracking services for the trucking company’s fleet of 850 vehicles, specifically its freight trailers. Covering PowerFleet for Canaccord, 5-star analyst Michael Walkley sees a clear path for the continued growth of the company. âWith over 600,000 subscribers, PowerFleet has the scale and international footprint to compete for global tenders against major competitors in fleet and asset tracking. For fleet management, PowerFleet is one of the only true end-to-end solutions in the market covering cabin trailers, refrigerated trailers, dry vans and containers, âsaid Walkley. The analyst added: âWe believe PowerFleet has a strong product portfolio and a leading solutions platform to increase its market share. This strength is demonstrated by its large global customer baseâ¦ We believe PowerFleet has the management team in place to execute its growth strategy and anticipate sales recovery and margin expansion as the global economies recover. To that end, Walkley is pricing PWFL a buy, and its price target of $ 12 implies a one-year hike of 84%. (To see Walkley’s record, click here) Overall, the unanimous Strong Buy consensus rating here, based on 4 recent positive reviews, shows that Wall Street agrees with Walkley on this stock. The shares are trading at a price of $ 6.51, and the average price target of $ 11.13 indicates a potential upside of 71% for the next 12 months. (See PWFL stock market analysis on TipRanks) AXT, Inc. (AXTI) AXT is a materials science company that inhabits the semiconductor industry supply chain. AXT develops and manufactures the high performance rare metal substrate wafers required for the construction of semiconductor chips and optoelectronic devices. AXT has operations in California and China, staying close to customers in Silicon Valley and Chinese commodities. The company occupies a vital niche in the chip industry, and its revenues and profits reflect this. In the first quarter of 2021, revenue reached $ 31.4 million, for the first time surpassing the $ 30 million mark with 51% year-over-year growth. EPS hit 8 cents, a dramatic turnaround from the 1 cent loss reported in the last year’s quarter. Along with the first quarter results, AXT also announced its first shipments of 8 inch diameter gallium arsenide (GaAs) substrates to a major customer. AXT has generated “significant interest” from potential customers for GaAs products and predicts growing demand as the products find more applications. Analyst Richard Shannon, who covers this stock for Craig-Hallum, takes special note of the growing demand for the company’s products. âThe demand profile of InP (optical, health monitoring) and GaAs (5G, optical, 3DS, microLED) is as powerful as anything we can find in small cap technology. With an improving customer base (Level 1 is the engine of much of future growth), the GM that can still grow, and the potential for improved valuation through a STAR stock market listing in mid -2022, investors have several ways to win in this stock, “Shannon wrote. Shannon is bullish. Comments support her buy rating, and her price target of $ 17 suggests potential for 90% growth in the stock. year to come. (To watch Shannon’s balance sheet, click here) Wall Street reviews of AXTI fall 3 to 1 in favor of buy over holds, giving the stock its Strong Buy consensus rating. AXTI shares are selling for $ 8.95 each, and the average target of $ 16 indicates a possible ~ 79% rise from that level. (See AXTI stock market analysis on TipRanks) CECO Environmental (CECE) For the last title on our list, we’ll move on to the green economy, where CECO Envi ronmental develops, supplies and installs air and fluid quality management systems. in demand since the 1970s. CECO provides know-how and systems in a wide range of industries, including building materials such as brick, cement, steel and glass; and manufacturing, in the automotive, aerospace, pharmaceutical, chemical and fuel refining industries. In the company’s latest financial release, for 1Q21, revenue was $ 71.9 million, just below the $ 80.5 million reported in the previous year’s quarter, while EPS fell from 10 cents per share a year ago to 3 cents in the current report. In more positive notes, the company reported a year-over-year increase in bookings from $ 75.7 million to $ 92.1 million, and backlog of $ 203.1 million. increased 11% from a year ago. A few days after the results were published, CECO announced that it had won a large-scale contract with a major semiconductor chip maker. The chip industry works regularly with a variety of rare metals and other polluting chemicals – and CECO’s new contract covers scrubber and exhaust systems, as well as recirculation pumps – items needed to ensure that the chip maker meets or exceeds environmental regulations. When it comes to the analyst community, HC Wainwright analyst Amit Dayal believes the company has a lot to offer and a bright future. “The company appears to be recovering from the headwinds of COVID-19, with bookings increasing to $ 92.1 million in the quarter … The last time bookings were at or above these levels was in mid- 2019â¦. Over the next few quarters, we expect revenues for Engineered Systems to improve as the energy markets as a whole improve. Management noted that the company’s bidding environment has improved, with an order pipeline of over $ 2.0 billion, which we believe should support continuous improvement in orders. over the next few quarters, âexplained the 5-star analyst. Based on the above, Dayal gives CECE a buy rating, and its price target of $ 15 indicates confidence in a 100% hike for the coming year. (To look at Dayal’s track record, click here) Once again, we’re looking at a stock with unanimous Strong Buy consensus rating – this one based on 3 positive reviews from Wall Street. The shares are selling for $ 7.50 and have an average price target of $ 12, which suggests a 60% 12-month increase. (See CECE Stock Analysis on TipRanks) To find great ideas for small cap stocks at attractive valuations, visit the Best Stocks to Buy from TipRanks, a newly launched tool that brings together all the information about stocks from TipRanks. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.