Investors are always on the lookout for the best stock purchase, but the signs that indicate the ‘right’ stocks are an inconsistent lot. A high or rising share price, upside potential, or dividend payment have all been used – but all have their exceptions. Some investors say to keep away from low-cost stocks, as a price under $5 gets that low for good reason – but some ‘penny’ stocks are fundamentally sound and show the best upsides in the market.
With this in mind, we used TipRanks’ database to find compelling stocks with bargain price tags. The platform steered us towards three tickers sporting share prices under $5 and Moderate or Strong Buy consensus ratings from the analyst community. Not to mention substantial upside potential is on the table.
LiveXLive Media (LIVX)
We’ll start in digital media, a tech niche that has gained from the various lockdown policies and the larger turn toward remote work and schooling. LiveXLive is a music and streaming company, offering platforms to deliver the digital music experience on live stream. The company also offers digital audio, music-on-demand, and a social music network.
The stay-at-home policies helped LIVX in 1H20, as the stock saw strong gains and peaked in value in early July. Since then, however, the share price has fallen even as LiveXLive has reported a record-breaking first fiscal quarter, with the $10.5 million in revenue being its highest-ever quarterly result. Better yet, the quarter saw a 20% year-over-year increase in paid subscribers. Preliminary data for the calendar year third quarter (the company’s fiscal second) shows an additional 6% increase in subscriber numbers.
Based on recent growth as well as the company’s $2 share price, Ladenburg analyst Jon Hickman thinks that now is the right time to pull the trigger.
“With LIVX’s dominant position as the industry leader in streaming live events, we believe the company continues to move rapidly to capture an increasing market share with its remote production/distribution platform for artists. We are pleasantly surprised by the early success of the Pay-pay-View initiative given the $1.35 million in ticket sales to date in 2020. Going forward, we note that the current revenue sources are now much more diversified and predictable and we are encouraged by the increasing number of well-known brands as sponsors and advertisers. In light of our expectation for positive adjusted EBITDA early in fiscal 2022 and a much-improved balance sheet, we continue to base our valuation on a 5x on expected revenues out to 2022.” Hickman wrote.
To this end, Hickman rates LIVX shares a Buy, and his $6.50 price target implies a whopping 222% upside for the coming year. (To watch Hickman’s track record, click here)
Other analysts also take a bullish approach. LIVX’s Strong Buy consensus rating breaks down into 4 Buys and zero Holds or Sells. Additionally, the $6 average price target puts the potential twelve-month gain at 197%. (See LIVX stock analysis on TipRanks)
Rimini Street (RMNI)
Software is big business in today’s digital world – but it doesn’t always work as advertised, making support a necessity. Rimini Street is a leader in third-party software support, offering customers support for some of the big names in business software.
While Rimini offers an essential product, the company’s EPS is notoriously low despite strong revenue numbers. At the top line, Rimini has reported $77 million to $78 million for the past three quarters – but EPS has remained below 8 cents. The first quarter of this year saw a net loss of 1 cent per share.
Subsequently, Rimini found itself on the losing end of a legal battle with Oracle over copyright infringement. As a result, RMNI shares are down over 40% since August highs.
That was the bad news. Mark Schappel, 5-star analyst with Benchmark, summarizes the possible silver lining.
“While we are not attorneys, and understanding complex legal matters is not one of our strengths, the stock’s reaction since the ruling — down about 20% — strikes us as a bit of an overreaction since RMNI’s business remains on track, the court ruling doesn’t create operational downside, and the shares currently trade at a ‘going out of business’ valuation,” Schappel wrote.
Accordingly, Schappel rates the stock a Buy and gives it a $10 price target suggesting an impressive 222% growth potential. (To watch Schappel’s track record, click here)
This is another stock with a unanimous Strong Buy analyst consensus rating, this time based on 3 recent reviews. Rimini Street’s share are selling for $3.10 after the recent price collapse, but Wall Street sees potential here. The average price target, $7.67, suggests a one-year upside potential of 147%. (See RMNI stock analysis on TipRanks)
The proliferation of mobile devices, and improvements in battery technology, have brought a focus on charging technologies. Energous holds a leading position in the wireless power and charging niche. The company’s WattUp system supports fast, efficient charging using RF-based wireless tech. The system can be tailored for home or office use, based on the number and type of devices to be charged. It has found applications in the automotive, industrial, medical, and retail industries.
In specific advantages, Energous has the world’s first FCC Part 18 certification for wireless charging technology, an important lead in the industry. The company also holds 215 patents, with more on the way. This past September, the company received regulatory approval for a 1-meter ranged wireless charging broadcast.
Like many companies specializing in emerging technologies, Energous regularly posts quarterly net EPS losses – but for the past two years, the trend in the company’s net loss has been steadily improving. The EPS loss has fallen by more than half in that time, moving from 49 cents n 3Q18 to 20 cents in the most recently report, for 2Q20.
Despite an improving fiscal situation, WATT shares are down 37% in the past two months. The low share price, however, opens up opportunities for investors, according to Roth Capital analyst Suji Desilva. The 5-star analyst rates the stock a Buy, and his $7 price target indicates a possible 182% in upside potential. (To watch Desilva’s track record, click here)
Supporting his stance, Desilva notes, “We believe WATT is experiencing increasing new customer engagement activity. As an example, management indicated that four Tier-1 customers are evaluating use of WATT technology and that the company is making inroads into newer military engagement opportunities. We believe the recently launched WattUp PowerHub development kit is helping drive charging application interest across fitness bands, smartwatches, hearables, smart glasses and medical devices to benefit. Wecontinue to expect a volume ramp in 2H20.”
Overall, the Moderate Buy analyst consensus on WATT shares is based on two recent Buy ratings. The stock has an average price target of $6, suggesting a 152% upside from the current share price of $2.38. (See WATT stock analysis on TipRanks)
To find good ideas for penny stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.