Buy the Dip in These 4 Buy-Rated Tech Stocks Under $10 The technology industry has garnered significant investor attention since the onset of the COVID-19 pandemic. And the industry is expected to continue benefiting from increasing spending on tech upgrades and...
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The technology industry has garnered significant investor attention since the onset of the COVID-19 pandemic. And the industry is expected to continue benefiting from increasing spending on tech upgrades and ongoing digitization across industries. However, the broader market sell-off since the beginning of the year has caused fundamentally sound tech stocks Wipro (WIT), Epson (SEKEY), Brightcove (BCOV), Computer Task Group (CTG) to dip in price lately. We think this offers attractive entry points for these low-priced stocks. Read on.
The Tech industry has been in the limelight since the onset of the COVID-19 pandemic, with a dramatic increase in demand for digitization and cloud-based solutions. Gartner projects global end-user spending on public cloud services to grow 21.7% year-over-year to $482 billion in 2022. Considering the broader picture, the organization projects worldwide IT spending to reach $4.50 trillion this year, an increase of 5.5% from 2021. The industry is expected to continue benefiting from the priority organizations have now placed on digital transformation, and the hefty investments they are making to accommodate hybrid work structures.
The tech-heavy NASDAQ Composite notched multiple record highs last year, fueled by investors' optimism. However, it appears that the index has entered correction territory because it has slumped 13.5% year-to-date. In addition, 2022 is expected to be a year of normalization for the technology sector.
Therefore, we think fundamentally sound tech stocks, Wipro Limited (WIT), Seiko Epson Corporation (SEKEY), Brightcove Incorporation (BCOV), Computer Task Group, Incorporated (CTG), which have dipped in price due to the broader market sell-off, could be solid picks now. These under-$10 stocks are rated Buy in our proprietary rating system.
Wipro Limited (WIT)
Bengaluru, India-based WIT, is an IT consulting and business process services company. It operates through three segments: IT Services; IT Products; and India State-Run Enterprise Services (ISRE). It also offers digital strategy advisory, customer-centric design, and technology consulting to enterprises worldwide.
Last month, WIT agreed to acquire Austin, Texas-based Edgile, a cybersecurity consulting provider. WIT had earlier acquired Ampion, a leading provider of cybersecurity services in Australia, and the cybersecurity practice at Capco, a leading consultancy in the BFSI sector in Europe and the U.S. These acquisitions should strengthen its cybersecurity business and allow WIT to provide enhanced cybersecurity solutions across sectors and regions.
Also in December, WIT announced its agreement to acquire LeanSwift Solutions, e-commerce, ERP, and mobile solution provider for Infor customers. "This acquisition will establish a strong, industry-focused Infor Practice that will help us win large deals in the Cloud ERP space," said Harish Dwarkanhalli, President – Applications & Data, iDEAS, WIT.
WIT's revenues increased 29.6% year-over-year to $2.73 billion in the third quarter, ended December 31. Its results from operating activities grew 5.1% from the year-ago value to $477 million, while its gross profit improved 15.2% year-over-year to $812 million. Its EPS increased 4.8% from its year-ago value to $0.07.
The $2.80 billion consensus revenue estimate for its fiscal fourth quarter, ending March 2022 indicates an increase of 28.8% year-over-year. Analysts expect WIT's EPS to come in at $0.08 for the same quarter, reflecting an 8.9% rise year-over-year.
The stock has declined 21.7% in price over the past month to close its last trading session at $7.40. The stock is currently trading 34.6% below its 52-week high of $9.96.
WIT's POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each other weighted to an optimal degree.
WIT is also rated a B in Stability, Sentiment, and Quality. Within the A-rated Outsourcing – Tech Services industry, it is ranked #6 of 11 stocks.
In addition to the POWR Ratings grades I've just highlighted, one can see the WIT ratings for Growth, Value, and Momentum here.
Seiko Epson Corporation (SEKEY)
Headquartered in Suwa, Japan, SEKEY provides services for products in printing solutions, visual communications, wearable and industrial products, and other businesses worldwide. It operates through three segments: Printing Solutions; Visual Communications; and Wearable & Industrial Products segments.
This month Epson announced a new addition to its ColorWorks® on-demand color label printer portfolio–the ColorWorks C4000. Given the demand for dynamic label printing solutions, and high quality, and the company's brand popularity, this new addition with a comprehensive suite of features and tools should be widely in demand.
On Nov. 16, 2021, Epson signed on Gibson Engineering, a leading solutions provider for world-class manufacturers of industrial automation products, as an official distributor of Epson Robots automation solutions. With a diverse customer base in the Northeast and Mid-Atlantic regions, from life sciences and plastics manufacturers to OEM machine builders, Gibson could help SEKEY enhance its market reach for its robot solutions.
SEKEY's revenues increased 9.2% year-over-year to ¥268.44 billion ($2.40 billion) in the second quarter, ended September 30. Its profit from operating activities grew 238.2% from its year-ago value to ¥24.46 billion ($218.55 million), while its total comprehensive income improved 300.4% year-over-year to ¥20.90 billion ($186.80 million). Its EPS increased 324.3% from its year-ago value to $0.49.
Analysts expect the company's revenue to increase 51.2% year-over-year to $9.95 billion in its fiscal period ending March 2022.
Over the past month, the stock has slumped 2.9% in price to close its last trading session at $8.70. The stock is currently trading 25.6% below its 52-week high of $10.93.
It is no surprise SEKEY has an overall A rating, which translates to Strong Buy in our proprietary rating system.
SEKEY is rated an A in Value, Stability, and Quality. It is ranked #4 of 48 stocks in the Technology - Hardware industry. Click here to see the SEKEY ratings for Growth, Momentum & Sentiment.
Brightcove Incorporation (BCOV)
Boston-based BCOV provides cloud-based services for video. Its flagship product includes Video Cloud, an online video platform that enables its customers to publish and distribute video to Internet-connected devices. The company was formerly known as Video Marketplace, Inc.
This month, Riverside.fm, an online video capture tool for creating podcasts, interviews, and virtual event content, announced its partnership with BCOV. The collaboration should enable joint customers to create high-quality audio, video content, and deliver it on BCOV's video platform. Given the growing content creator space, this integration should help BCOV's video platform thrive.
Last October, BCOV announced its plans to acquire HapYak technology, a leading content platform, to enable its clients to incorporate interactivity quickly and easily into virtually any video. "Video delivers content in the most powerful way, and adding interactivity dramatically enhances viewer engagement, on-boards employees more effectively, inspires stronger passions, and closes more sales faster," said Namita Dhallan, Chief Product Officer, Brightcove.
BCOV's total revenue increased 6.3% year-over-year to $52.16 million in the third quarter, ended September 30, 2021. Its non-GAAP gross profit increased 8.2% from its year-ago value to $34.12 million. In addition, its cash and cash equivalents balance increased 49.3% year-over-year to $45.29 million for the nine months ended September 30.
The Street expects the company's revenue to increase 4.1% year-over-year to $218.53 million in its fiscal period ending December 2022. The $0.36 consensus EPS estimate indicates a rise of 9% year-over-year in the same period. Also, BCOV beat the Street's EPS estimates in each of the trailing four quarters, which is impressive.
BCOV's shares have slumped 7.6% over the past month to close its last trading session at $9.25. The stock is currently trading 63.4% below its 52-week high of $25.26.
BCOV's POWR Ratings reflect its solid fundamentals. The company has an overall B rating, which translates to Buy in our proprietary rating system.
BCOV is rated an A in Value and a B in Sentiment and Quality. It is ranked #19 of 165 stocks in the Software-Application industry. To see additional BCOV ratings for Growth, Stability & Momentum, click here.
Computer Task Group, Incorporated (CTG)
CTG is a Buffalo, N.Y.-based IT-based services provider worldwide. It offers business process transformation solutions, including strategic advisory, data strategy, digital workplace. It also provides IT and other staffing services, including managed staffing, staff augmentation, and volume staffing services.
Last month, CTG expanded its strategic partnership agreement with Micro Focus to include CTG France. Micro Focus has delivered mission-critical technology to around 40,000 customers around the globe. By leveraging its expertise in Application Lifecycle Management (ALM) software, CTG France expects to provide the highest levels of ALM solutions to its clients and to help ensure quality and application performance at every stage of the digital application lifecycle.
In October, CTG announced the commencement of a multi-million-dollar contract with a large regional healthcare system client to manage the go-live and provide associated training for a major Epic implementation. This marks CTG's third go-live engagement over the past year, demonstrating the company's technological prowess in this space.
CTG's revenue increased 2.2% year-over-year to $90.60 million in the third quarter, ended October 1. Its non-GAAP operating income grew 26.9% from its year-ago value to $2.98 million, while its gross profit improved 3.8% year-over-year to $20.29 million. Its adjusted EBITDA increased 12.5% from its year-ago value to $3.75 million.
The $113 million consensus revenue estimate for its fiscal fourth quarter, ending December 31, 2021, indicates an increase of 11.5% year-over-year. CTG's EPS is expected to come in at $0.17, indicating a 21.4% rise year-over-year.
The stock has declined 10.5% in price over the past month to close its last trading session at $8.23. The stock is currently trading 29.5% below its 52-week high of $11.68.
CTG has an overall B rating, which translates to Buy in our proprietary rating system. CTG is rated an A in Value and a B in Stability and Sentiment. In the Technology-Services industry, it is ranked #3 of 74 stocks. Get CTG's Growth, Momentum, and Quality ratings here.
What To Do Next?
If you'd like to see more top stocks under $10, then you should check out our free special report: 3 Stocks to DOUBLE This Year
What gives these stocks the right stuff to become big winners?
First, because they are all low priced companies with explosive growth potential, that excel in key areas of growth, sentiment and momentum.
But even more important is that they are all top Buy rated stocks according to our coveted POWR Ratings system. Yes, that same system where top-rated stocks have averaged a +31.10% annual return.
Click below now to see these 3 exciting stocks which could double (or more!) in the year ahead:
WIT shares were trading at $7.40 per share on Wednesday morning, down $0.00 (0.00%). Year-to-date, WIT has declined -24.07%, versus a -7.21% rise in the benchmark S&P 500 index during the same period.
About the Author: Subhasree Kar
Subhasree's keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master's degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics.
The post Buy the Dip in These 4 Buy-Rated Tech Stocks Under $10 appeared first on StockNews.com
