2 Buy-Rated Tech Stocks Under $15 According to POWR Ratings The growing adoption of cloud computing and artificial intelligence solutions for hybrid working, and businesses' continuing digitization, are propelling the technology industry's growth. So, we think it could be wise...
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The growing adoption of cloud computing and artificial intelligence solutions for hybrid working, and businesses' continuing digitization, are propelling the technology industry's growth. So, we think it could be wise to bet on low-priced tech stocks LG Display (LPL) and GoPro (GPRO) which are well-positioned to capitalize on the industry tailwinds. These stocks are rated "Buy' in our proprietary rating system.
Businesses have strengthened their hybrid working models by integrating cloud computing, artificial intelligence, and other advanced technologies. This, along with the expansion of data centers and business automation, is driving the technology industry's growth. Also, the growing need for data and analytics capabilities and the 5G rollout should keep the industry's products, services, and solutions in demand. According to a Forrester report, the U.S. tech spending is expected to grow by 7.4% in 2021 and by 6.7% in 2022.
Investors' interest in the technology industry is evidenced by the iShares Global Tech ETF's (IXN) 34.2% returns over the past year versus the SPDR S&P 500 ETF Trust's (SPY) 30% gains.
Therefore, we think fundamentally sound tech stocks LG Display Co., Ltd. (LPL) and GoPro, Inc. (GPRO) could be solid bets now. These two stocks are currently trading at less than $15 but hold significant upside potential. They are rated "Buy' in our proprietary rating system.
LG Display Co., Ltd. (LPL)
Headquartered in Seoul, South Korea, LPL manufactures and sells display panels for televisions, smartphones, monitors, notebooks, and tablets. The company's TFT-LCD and OLED technology-based display panels are used primarily in its gadgets. Also, LPL provides display panels for industrial and other applications, including entertainment systems, portable navigation devices, and medical diagnostic equipment.
LG's sales increased 7% year-over-year to KRW7.22 trillion ($6.1 billion) for the third quarter. The company's operating profit grew 222% from its year-ago value to KRW528.9 billion ($446.98 million). Its EBITDA rose 32% from the prior-year quarter to KRW1.7 trillion ($1.43 billion), and the company's net income came in at KRW463.5 billion ($391.71 million).
Analysts expect LPL's revenue to increase 22.5% year-over-year to $25.18 billion in its fiscal year 2021. In addition, the company has an impressive earnings surprise history; it beat the consensus EPS estimates in three of the trailing four quarters. Also, its EPS is expected to increase 900% in the current year. The stock has gained 27.2% in price over the past year to close yesterday's trading session at $8.57.
LPL's strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
LPL is also rated an A grade for Value, and a B grade for Stability and Sentiment. Within the Technology – Electronics industry, the stock is ranked #7 of 44 stocks.
To see additional POWR Ratings for Growth, Quality, and Momentum for LPL, click here.
GoPro, Inc. (GPRO)
GPRO is a camera and mountable and wearable accessories producer. The San Mateo, Calif.-headquartered concern offers cloud-connected HERO7 Silver, HERO7 Black, HERO8 Black, and HERO9 Black waterproof cameras; MAX, a 360-degree waterproof camera; Quik, a video editing application; and GoPro App that allows users to share and edit their photos and videos. GPRO markets and sells its products through retailers, distributors, and through its websites.
Last month, GPRO launched a new high-performance battery for HERO10 and HERO9 Black cameras. With it, users can benefit from an increase in cold temperature performance and extension in video recording times in all conditions. Also, the firmware for HERO10 Black should allow users longer video recording times and extend battery life in their existing camera's standard battery.
During the third quarter, ended September 30, 2021, GPRO's revenue increased 12.9% year-over-year to $316.67 million. The company's operating income grew 75.8% from its year-ago value to $58.8 million. Its net income rose 78.2% from the prior-year quarter to $55.32 million. Also, the company's EPS increased 70% year-over-year to $0.34.
GPRO's revenue is expected to increase 30% year-over-year to $1.16 billion in its fiscal year 2021. The company has an impressive earnings surprise history; it beat the consensus EPS estimates in three of the trailing four quarters. The company's EPS is expected to increase 937.5% in the current year and 9.6% next year. The stock has gained 27.9% in price over the past nine months and 49.4% over the past year to close yesterday's trading session at $10.46.
GPRO's POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. The stock also has a B grade for Value and Quality.
In addition to the POWR Rating grades I have just highlighted, one can see GPRO's ratings for Growth, Stability, Momentum, and Sentiment here. The stock is ranked #17 of 51 stocks in the Technology – Hardware industry.
LPL shares rose $0.03 (+0.35%) in premarket trading Friday. Year-to-date, LPL has gained 1.90%, versus a 25.66% rise in the benchmark S&P 500 index during the same period.
About the Author: Priyanka Mandal
Priyanka is a passionate investment analyst and financial journalist. After earning a master's degree in economics, her interest in financial markets motivated her to begin her career in investment research.
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