Aug 17, 2012, 09:30 ET
CHICAGO, Aug. 17, 2012 /PRNewswire/ -- Today, Zacks Investment Ideas feature highlights Features: Steelcase (NYSE:SCS), Hawaiian Holdings Inc. (Nasdaq:HA), OMNOVA Solutions (NYSE:OMN), Kona Grill (Nasdaq:KONA) and Outdoor Channel Holdings Inc. (Nasdaq:OUTD).
5 Fast-Growing Stocks Under $10
Ever been at a summer barbeque and have this conversation?
"Hi, do you buy stocks? I know this stock that's a sure winner. It's only $1. It's in plastics in Brazil. Expected to triple in the next year. You should get in now. I just bought some."
Who doesn't love a "cheap" stock?
By cheap I mean a stock trading under $10 a share. There is a lure to buying one of these stocks because there's something powerful to buying a bunch of shares for your money.
In your head you think, "for just $1000, I can buy 1000 shares of that stock. Imagine that? A thousand shares."
It just sounds cool.
And then there are the dreams of riches when thinking of how easily it could double or triple. After all, how hard is it for a $5 stock to go to $10? Of course, it's the same as a $40 stock going to $80- but our mind doesn't think that way.
However, unless you want to keep getting your tips from the guy at the barbecue, how do you separate the "good" stocks under $10 from the "bad"?
Use The Zacks Rank To Find Great Stocks
Earnings and earnings growth separate the men from the boys in the world of stocks.
By using the Zacks Rank, it's easy to find stocks that have rising earnings estimates. Look for Zacks #1 Rank (Strong Buy) and #2 Rank (Buy) stocks, both which will have rising earnings estimates.
Then, narrow it down further to find those stocks that are highest ranked, have double digit earnings growth AND are profitable. And, of course, they all have to be under $10.
They do exist!
5 Top Zacks Rank Buy Stocks Under $10
With my criteria, I had no trouble putting together a diverse mini-portfolio of stocks under $10.
You may be familiar with some of these companies and others may be new. But they each have the following in common:
1. A Zacks Rank of #1 (Strong Buy) or #2 (Buy)
2. Double digit earnings growth
1. Steelcase (NYSE:SCS)
Steelcase makes office furniture and interior architecture items like moveable walls and space dividers. The company is celebrating its 100th anniversary this year.
As an added bonus, shareholders are getting a 4% dividend yield.
Stock trading at: $9.40
Fiscal 2013 EPS growth expected to be 31%
Zacks #2 Rank (Buy)
2. Hawaiian Holdings Inc. (Nasdaq:HA)
Hawaiian Holdings operates Hawaiian Airlines, the longest operating airlines in Hawai'i currently in its 83rd year. It flies 170 daily flights between the islands as well as to 11 cities on the mainland.
Stock trading at: $6.09
2012 EPS growth expected to be 86.1%
Zacks #2 Rank (Buy)
3. OMNOVA Solutions (NYSE:OMN)
OMNOVA makes emulsion polymers, specialty chemicals, decorative laminates and upholstery (remember those school bus seats?).
Stock trading at: $7.62
2012 EPS growth expected to be 35%
Zacks #2 Rank (Buy)
4. Kona Grill (Nasdaq:KONA)
Kona Grill operates 23 restaurants in 16 states. Sushi sales make up 54% of the company's sales so it is less impacted by rising commodity costs compared to other restaurant chains which may be corn or grain sensitive. In the second quarter, it grew same-store sales for the 7th consecutive quarter. Margins also grew.
Stock trading at: $8.28
2012 EPS growth expected to be 77%
Zacks #2 Rank (Buy)
5. Outdoor Channel Holdings Inc. (Nasdaq:OUTD)
Outdoor Channel operates the hunting, fishing, adventure cable channel "Outdoor Channel" which is in 38 million households. You might know its popular Major League Fishing show which boosted advertising revenue by 19% in the second quarter. Sales jumped 10% in the second quarter. The company also has little debt.
Stock trading at: $6.93
2012 EPS growth expected to be 71%
Zacks #1 Rank (Strong Buy)
Buying Stocks Under $10 Is Fun
Not all stocks under $10 are created equal. Use the Zacks Rank and other solid fundamentals to separate the "good" from the "bad."
These 5 Zacks Rank Buy stocks, however, prove that investors can find stocks under $10 with strong earnings growth and a history of producing profit for shareholders. In the case of Steelcase, you have a track record of 100 years.
But don't stop with just these five. There are others that also fit the criteria. Don't limit yourself.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Len Zacks. The company continually processes stock reports issued by 3,000 analysts from 150 brokerage firms. It monitors more than 200,000 earnings estimates, looking for changes.
Then when changes are discovered, they're applied to help assign more than 4,400 stocks into five Zacks Rank categories: #1 Strong Buy, #2 Buy, #3 Hold, #4 Sell, and #5 Strong Sell. This proprietary stock picking system; the Zacks Rank, continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter Profit from the Pros. In short, it's your steady flow of profitable ideas GUARANTEED to be worth your time. Get your free subscription to Profit from the Pros at: http://at.zacks.com/?id=7298
Follow us on Twitter: http://twitter.com/ZacksResearch
Join us on Facebook: http://www.facebook.com/ZacksInvestmentResearch
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Zacks Investment Research
800-767-3771 ext. 9339
SOURCE Zacks Investment Research, Inc.
Share this article