5 Low-Priced Tech Stocks With Great Potential
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You don’t have to focus on high-priced tech stocks to win
Given their surge over the last few years, tech stocks aren’t cheap — at least when it comes to their actual share prices. Top leaders like Amazon (NASDAQ:AMZN) and Google (NASDAQ:GOOG, NASDAQ:GOOGL) can be had for north of a grand per share, while even smaller tech stocks like ServiceNow (NASDAQ:NOW) can be had for over $100 per share. And while, as we said before, “price is what you pay, value is what you get,” there is something about buying cheap stocks that can result in higher returns.
So, if it was possible to combine the potential of tech stocks with the financial advantages of low-priced ones, you’d have very powerful weapon indeed.
Luckily, you can do just that. There are several cheap tech stocks that can be had for under $15 per share, and many of them have plenty of catalysts to propel them forward. They aren’t without risk, but they do have plenty of reward potential. So which ones should you focus on?
Here are five cheap tech stocks to buy for your portfolio.
Cheap Tech Stocks to Buy: Fitbit (FIT)
Share Price: $5.85
It’s no surprise that former wearable device superstar Fitbit (NYSE:FIT) is now a low-priced tech stock. The device marker spent much of 2017 and 2018 in freefall as wearable device growth has failed to catch up with lofty expectations. And as fellow InvestorPlace contributor Josh Enomoto has mentioned, the segment has been a victim of the dreaded “C” word — commoditization.
So, why be bullish on the floundering device maker?
It comes down to healthcare, health insurance and FIT’s low prices for devices.
John Handcock made waves last year when it announced that it was no longer underwriting traditional life insurance policies and will only be issuing more dynamic policies tied to a wearable device. Corporate America is getting in on the act as well and has started to offer incentives/breaks on health insurance to employees wearing fitness trackers.
For FIT, this could be its opportunity. A low price, a name brand and a huge data set of active users makes it an ideal partner in these instances. With healthcare costs rising, firms and employees are going to be doing everything they can to get insurance premiums lower. Already, sales at FIT seem to be picking up. With tracking requirements becoming the norm, Fitbit could be a major winner.
And at less than $6 per share, it’s worth that gamble.
Glu Mobile (GLUU)
Share Price: $11.28
One-hundred and twenty-two percent. That’s a great yearly return for any stock, yet one that makes mobile games for your smart-phone. But for Glu Mobile (NASDAQ:GLUU), its 2018 return may just be a drop in the bucket. That’s because GLUU’s turnaround is finally paying off.
A few years ago, mobile gaming was super hot — and then the bottom dropped out. GLUU and its rivals were hit hard. In that downturn, the game developer’s management undertook a big turnaround plan. For starters, they focused more on games they fully owned rather than celebrity licensed properties. This allowed them to reap higher margins from in-app purchases and downloads. With bookings rising for these so-called growth games, Glu was actually able to be cash flow positive during the fourth quarter.
GLUU was also able to reduce its debt load and build a strong cash balance over the last year.
With that, GLUU stock has surged. The best part is that the firm’s development pipeline still seems robust, with several potential hits coming over the next few quarters. This includes a new World Wrestling Entertainment (NYSE:WWE) game as well as a title under license from Walt Disney’s (NYSE:DIS) Pixar. Moreover, several other games in development are targeted at female gamers — an underrepresented niche. That gives Glu a potentially huge market all to itself.
With the firm now firing on all cylinders and gaming still going strong, the $12 per share tech stock seems like a bargain at a P/E of 26.
Nokia Oyj (ADR) (NOK)
Share Price: $5.92
Ask many people what they think about handset maker Nokia Oyj (ADR) (NYSE:NOK) and odds are, they say “washed up.” And that may be true to a point — when it comes to devices. But Nokia still remains one of the most important tech stocks in the entire wireless world. The reason comes down to one letter and one number.
We’re talking about 5G.
As its handset leadership position was fading, Nokia made two shrewd buyouts: industrial conglomerate Siemens‘ networking business and the Alcatel-Lucent assets. With those two buys, Nokia became an equipment maker that brings all the data, voice and video to the end users. Who cares about what device it’s on?
This switch has been wonderful for NOK stock. Current 4G networks aren’t cutting it with all the streaming video, mobile commerce and gaming we’re now doing on our phones and tablets. Because of that, telecom firms are now spending some big bucks to upgrade their networks. And a lot of it is coming NOK’s way.
Sales at Nokia continue to rise, clocking in at 6.87 billion euros last quarter. The bulk of that was networking and 5G hardware.
And yet, NOK shares remain a castaway among cheap tech stocks. At under $6 and with a 3.8% dividend yield, it’s worth a buy.
TeleNav (TNAV)
Share Price: $5.95
Sometimes partnering with a larger firm can boost the fortunes smaller tech stocks. For TeleNav (NASDAQ:TNAV), that means being buddies with Amazon (NASDAQ:AMZN). Amazon has been looking for ways to get its A.I. voice assistant Alexa into more devices and into every American’s home. A big push in that is into automobiles. This is where TNAV comes in.
TeleNav provides several location-based systems to create a smarter, safer & more personalized user experience for drivers. This includes routing, guidance, positioning and search. The kicker is that TNAV’s systems are much more than just your normal GPS. They use A.I. and voice assistants, allow advertisers and in-car commerce — such as go-ahead ordering — and the like. Amazon joined with TNAV in a deal that would make Alexa front and center in its units.
What TNAV is really doing is building a portfolio of data that Amazon or other firms could potentially massage and exploit later on. What it gets is a huge platform to build on for future real-time advertising, sales and infotainment options. It’s a win-win for TNAV, AMZN and other future partners.
The opportunity is huge. And yet, TNAV trades at just around $6 per share. That’s a huge bargain for its potential — even more so when considering that firm continues to grow its revenues like weeds and finally has achieved positive cash flows at the end of last quarter.
In the end, this one tech stock that won’t stay low-priced for much longer.
3D Systems (DDD)
Share Price: $11.27
One of the biggest trends in industrial manufacturing, healthcare and even tech itself is 3D printing. The ability to create three-dimensional objects out of metals, plastics or even biopolymers is truly exciting. And over the years, 3D printing has gone from a niche hobby to mainstream production. Leading the way has been top tech stock 3D Systems (NYSE:DDD).
However, lately, DDD has been a shell of its former self. The former high flyer and triple-digit-priced tech stock can now be had for around $11. At that price, 3D may be a big-time buy.
For one thing, the firm is growing. Last year, DDD’s revenues jumped 6.4% year-over-year to $687.7 million. At the same time, the growth in several key areas allowed 3D to realize a profit. Adjusted earnings per share for all of 2018 came in at 15 cents. That was versus a loss per share of 2 cents recorded in 2017. So, things have gotten a bit better at DDD now that 3D printing has gained significant steam.
And the firm has more levers to pull. DDD continues to push harder into healthcare and the dental sector. Being able to print out prosthetics, implants and braces has the potential to a massive market for the firm. One that is being tapped just now.
For investors, DDD stock’s fall from grace has more to do with it simply losing its momentum and fad status. Which means, value hunters can snag shares of this low-priced tech stock for basement-level prices.
At the time of writing on April 3, 2019, Aaron Levitt was long AMZN.
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Category: Cheap Stocks
