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3 “strong buy” shares under $ 10 that are ready to explode

Let’s talk a little bit about growth and potential. The two are not always the same, but both are vital to a successful investment. After all, the goal of all equity investments is to achieve growth – and that means finding stocks with the greatest potential. It is natural to gravitate towards the giants that attract attention in the headlines; they have huge market ratings and made their first investors very happy. But there is an unfortunate truism in the markets, based on the iron rules of mathematics, that the bigger a company gets, the less likely it is to show big returns. A $ 200 million company is much more likely to double in value than a $ 200 billion giant. And that leads us to low capitalization stocks. For investors looking for the best combination of high growth potential and low entry costs, small caps may be just the ticket. We used the TipRanks database to find several that fit a profile: a market capitalization below $ 400 million and a share price below $ 10. Better yet, these small cap tickers have strong buy consensus ratings of the analyst community and have strong upside potential. PowerFleet, Inc. (PWFL) The Internet of Things is transforming a range of industries, from factory floors to warehouses and truck fleets. PowerFleet, the first small-cap inventory we’re looking at, applies IoT and M2M technology to the security, control, tracking and management of high-quality assets, including trailers, containers, industrial trucks and cargo, vehicles, and truck fleets. PowerFleet’s first quarter revenue was consistent with the previous quarter and included an improvement in earnings. On the top line, reported revenue of $ 29 million was only 1.3% of the fourth quarter’s result. The reported 9-cent EPS loss was a 25% improvement over the 12-cent loss reported in the previous quarter. Compared to the previous year, EPS improved by 40%. Earlier this month, PowerFleet won two major new contracts. On May 10, the company announced a 4-year contract with the Israeli Police to deploy a fleet management system and driver solution for more than 7,500 vehicles of 61 different types. The contract includes a 4-year renewal option. Two days later, PowerFleet announced a smaller deal with Alabama-based White Oak Transportation to provide tracking services for the transport company’s fleet of 850 vehicles, especially its cargo trailers. Covering PowerFleet for Canaccord, 5-star analyst Michael Walkley sees a clear path ahead for the company’s continued growth. “With more than 600,000 subscribers, PowerFleet has the scale and international presence to compete in global tenders against leading fleet and asset tracking competitors. For fleet management, PowerFleet is one of the only true end-to-end solutions on the market, covering cabins, refrigerated trailers, dry vans and containers, “said Walkley. The analyst added:” We believe that PowerFleet has a strong product portfolio and a leading solutions platform to increase your market share. This strength is demonstrated by its broad global customer base … We believe that PowerFleet has the leadership team ready to execute its growth strategy and anticipate sales recovery and margin expansion as global economies recover ” . To this end, Walkley assesses the PWFL at Buy, and its $ 12 target price implies an 84% year-on-year upside. (To view Walkley’s track record, click here) In general, Strong Buy’s unanimous consensus rating here, based on 4 recent positive reviews, shows that Wall Street agrees with Walkley about this action. The shares are trading at $ 6.51, and the average target price of $ 11.13 indicates a potential increase of 71% in the next 12 months. (See PWFL stock analysis at TipRanks) AXT, Inc. (AXTI) AXT is a materials science company that inhabits the semiconductor industry supply chain. AXT develops and manufactures the high performance rare metal substrate wafers needed in the construction of semiconductor chips and optoelectronic devices. AXT has operations in California and China, remaining close to Silicon Valley customers and Chinese raw materials. The company has a vital niche in the chip industry, and its revenue and earnings have reflected that. In the first quarter of 2021, revenue reached US $ 31.4 million, exceeding the US $ 30 million mark for the first time with a growth of 51% year on year. Earnings per share reached 8 cents, a dramatic turnaround from the 1 cent loss recorded in the previous year’s quarter. Along with the results for the first quarter, AXT also announced its first deliveries of gallium arsenide (GaAs) substrates 8 inches in diameter to an important customer. AXT has received “significant interest” from potential customers of GaAs products and expects demand to increase as the products find more applications. Analyst Richard Shannon, who covers this stock for Craig-Hallum, especially notes the growing demand for the company’s products. “The demand profile of InP (optics, health monitoring) and GaAs (5G, optics, 3DS, microLED) are as powerful as anyone we can find in small cap technology. With an ever-improving set of customers (tier 1 is driving much of the future growth), GM that can still grow and the potential for improving the rating of a listing on the STAR stock in mid-2022, investors have several ways to earn with these shares, “wrote Shannon. Comments confirm his purchase rating, and his $ 17 target price suggests a 90% growth potential next year. (To view Shannon’s history, click here) Wall Street on AXTI divides into 3-to-1 in favor of purchases versus retentions, giving the stock its strong consensus buy rating. AXTI shares are selling for $ 8.95 each, and the average target of $ 16 indicates a possible increase of ~ 79% from that level. (See AXTI’s stock analysis in TipRanks) CECO Ambiental (CECE) For the last stock on our list, we will switch to the green economy, where CECO Ambiental develops , supplies and installs air quality and fluid handling. In short, the company deals with air pollution control technology, a niche that has been in demand since the 1970s. CECO provides know-how and systems in a wide range of industries, including building materials such as bricks, cement, steel and glass; and manufacturing, in the automotive, aerospace, pharmaceutical, chemical and fuel refining sectors. In the company’s most recent financial launch, for 1Q21, net revenue was $ 71.9 million, just below the $ 80.5 million reported in the previous year’s quarter, while EPS fell 10 cents a share a year ago to 3 cents in the current report. On more positive notes, the company reported a year-over-year increase in reserves, from $ 75.7 million to $ 92.1 million, and the $ 203.1 million working portfolio increased 11% over the previous year. A few days after the results were released, CECO announced that it had won a large-scale contract with a major semiconductor chip manufacturer. The chip industry regularly works with a variety of rare metals and other polluting chemicals – and the new CECO contract covers purifier and exhaust systems, as well as recirculation pumps – items required for the chip maker to meet or exceed environmental regulations . Turning to the analyst community, H.C. Wainwright analyst Amit Dayal believes the company has a lot to offer and a bright future. “The company appears to be recovering from the headwinds of COVID-19, with reserves growing to $ 92.1 million during the quarter … The last time reserves were at these levels or above was in mid-2019…. Over the next few quarters, we expect to see higher Engineered Systems revenues as the broader energy markets improve. Management highlighted that the company’s bidding environment has improved, with an order backlog of more than US $ 2.0 billion, which we believe should support the continuous improvement of orders in the coming quarters ”, explained the 5-star analyst. Based on the above, Dayal estimates that CECE shares a Buy rating, and its target price of $ 15 indicates confidence in a 100% rise for next year. (To view Dayal’s track record, click here) Once again, we are looking at an action with a strong unanimous buying consensus rating – this based on 3 positive Wall Street ratings. The shares are selling for $ 7.50 and have an average price target of $ 12, suggesting an increase of 60% in 12 months. (See CECE’s stock analysis at TipRanks) To find good ideas for trading low capitalization stocks with attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that brings together all TipRanks stock perceptions. Disclaimer: The opinions expressed in this article are exclusively those of the analysts presented. The content should be used for informational purposes only. It is very important to do your own analysis before making any investment.

Paula Fonseca