The Dow, S&P 500, and the Nasdaq closed lower Tuesday after a busy day of news. Despite impeachment hanging over Washington, House Democrats struck a deal to support the new United States–Mexico–Canada Agreement, which pleased President Trump and should help provide some more economic stability amid historically low U.S. unemployment.
On top of that, the Wall Street Journal reported that the U.S. and China are planning to delay the new tariffs that are scheduled to start on December 15. Plus, the S&P 500 has climbed 18% in the last year and 2% in the past month.
So, as we head into 2020, things still appear to be set up well for Wall Street. With this in mind, investors might want to add a few low-priced stocks to their portfolios.
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 ‘cheap’ tech stocks with the help of our Zacks Stock Screener that investors might want to buy heading into 2020…
The Rubicon Project, Inc. RUBI
Prior Close: $7.99 USD
The Rubicon Project is an advertising exchange firm that helps sell advertisement space more efficiently in the digital age. The tech company helps execute “tens of billions” of ad transactions every month and RUBI has carved out space in an industry dominated by Google GOOGL. The Los Angeles, California-headquartered firm enables advertisers to reach consumers across giant outlets like Spotify SPOT, eBay EBAY, and countless others and stands to benefit as more ad spending shifts to digital.
The Rubicon Project saw its sales jump 30% during the first nine months of 2019, after they fell in 2018. Our current Zacks estimates call for the firm’s Q4 sales to pop over 15%, with full-year fiscal 2019 revenues expected to surge 25%. RUBI’s fiscal 2020 sales are then expected to jump another 13% higher, in a sign of stable expansion.
Perhaps more importantly, RUBI’s adjusted Q4 earnings are projected to skyrocket to help it report a much smaller loss in 2019 than it did last year ($-0.09 vs. -$0.85). Plus, RUBI’s 2020 earnings are expected to soar to +$0.10 per share. RUBI’s strong earnings revision activity also helps it hold a Zacks Rank #2 (Buy) and it has crushed our quarterly estimates recently. RUBI shares have also surged from under $2 to their current price over the last two years.
And as Google faces more pressure in Washington for its perceived anticompetitive practices, The Rubicon Project and other ad exchanges like the Trade Desk TTD might see a boost.
Gogo Inc. GOGO
Prior Close: $5.40 USD
Gogo is one of the world’s largest providers of in-flight Wi-Fi services for both commercial airlines and private jets. The Chicago-based firm was one of the pioneers of internet at 30,000 feet and works with giants such as United UAL, Delta DAL, American AAL, and many others, and announced in November a new inflight connectivity deal with Qatar Airways.
Gogo went public back in 2013 and saw some early success, but the company’s stock price has tumbled as it struggles to turn a profit due to high costs. The firm also suffered from setbacks due to the quick expansion of smartphones, where its user experience wasn’t initially strong. Gogo has, however, worked to improve both of these issues.
Gogo is expected to experience a pullback on both the top and bottom lines this year, based on our current Zacks estimates. Things are then expected to turn around in 2020, with its adjusted loss expected to be cut in half. Gogo is currently a Zacks Rank #2 (Buy) that sports an “A” grade for Growth in our Style Scores system.
The company is also part of our Wireless National industry that rests in the top 21% of over 250 Zacks industries. Shares of Gogo have jumped over 80% in 2019 and investors might view it as a bet that airlines will be able to figure out better Wi-Fi pricing to entice greater adoption.
NeoPhotonics Corporation NPTN
Prior Close: $7.65 USD
NeoPhotonics designs and makes optoelectronic solutions utilized in high-speed communications networks across telecom and datacenters. The San Jose, California-based firm blew by our quarterly estimates at the end of October, as it continues to expand as datacenters become more important in the cloud computing age. Chief executive Tim Jenks noted at the time that the “macro trends of the industry favor our core capabilities.”
NPTN shares have soared over 80% since June from roughly $4 per share. The stock surged again after its Halloween report but has slipped nearly 10% in the last month. This might actually set up a better buying opportunity for investors high on NeoPhotonics, which is currently a Zacks Rank #1 (Strong Buy). The stock also holds an “A” grade for Growth.
Peeking ahead, NeoPhotonics’ full-year fiscal 2019 sales are expected to jump 9%, with 2020 expected to come in 7% higher. NPTN’s consensus fiscal 2019 earnings estimate jumped from -$0.15 to break-even after it reported its Q3 2019 results, which marks a strong improvement from 2018’s -$0.45 per share loss. Plus, NPTN’s bottom-line is expected soar from break-even earnings this year to +$0.24 in fiscal 2020.
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