Stocks were up again Thursday, until a late afternoon selloff, as more economies start to reopen around the world and U.S. states continue rolling back lockdown measures. The Dow on Wednesday closed above 25000 for the first time since early March and it posted its largest two-day climb in over a month. Meanwhile, the S&P 500 popped above 3000 and is now up over 35% since the market’s March 23 lows.
Thursday’s U.S. jobless claims data highlighted the devastating impact the coronavirus is still having on the U.S. economy. Yet the numbers are trending downward and more businesses are reopening.
The market is still clearly well ahead of the actual economy. But this makes sense given the nature of the market, the Fed’s interventions, and the U.S. government’s support. Therefore, Wall Street might keep looking ahead to better days, while riding the massive ‘don’t fight the Fed’ wave.
With this in mind, let’s look at three ‘cheap’ stocks trading under $20 a share that investors might want to buy as the market’s reopening rally grows…
Box, Inc. BOX
Prior Close: $19.49 USD (end of regular trading Thursday, May 28)
Box is a cloud-focused content management firm that crushed our Q1 fiscal 2021 estimates on Wednesday. The firm posted adjusted earnings of $0.10 per share, after reporting a loss of -$0.03 a share in the year-ago period. Box’s sales climbed 13%, while its free cash flow jumped from $13.4 million in the year-ago period to $39.8 million. “The need for more organizations to develop remote work and digital transformation strategies on modern cloud platforms has never been greater,” CEO Aaron Levie said in prepared remarks.
The cloud storage firm’s stock price jumped following its Q1 release, and Box shares briefly jumped over our $20 threshold. Box stock has soared nearly 65% since the market’s March lows to top stay-at-home standouts Netflix NFLX and Zoom ZM, as its file-sharing and collaboration software seems tailor-made for the current remote-work environment. Shares of Box are now up 18% in 2020 and in the green over the last 12 months.
Box is currently a Zacks Rank #2 (Buy) that holds a “B” grade for Growth in our Style Scores system and is part of an industry that rests in the top 13% of our more than 250 Zacks industries. Plus, Box’s full year FY21 revenue guidance of between $760 to $768 million tops our current estimate that would have marked 9% growth. And the company’s bottom line is expected to soar from adjusted earnings of +$0.03 in FY20 to between $0.47 to $0.52 a share.
Glu Mobile Inc. GLUU
Prior Close: $8.68 USD (end of regular trading Thursday, May 28)
Glu Mobile is a mobile video game firm. The company’s portfolio includes MLB Tap Sports Baseball, Deer Hunter, and Kim Kardashian: Hollywood, Disney Sorcerer’s Arena DIS, and more. The company stands to grow within the booming global gaming space that is expected to explode from $151 billion in 2019 to nearly $200 billion by 2022. And mobile gaming is expected to account for nearly half of this market.
Shares of Glu have surged 53% in 2020 to crush its peer group’s 11% average. This group includes Electronic Arts EA, Nintendo NTDOY, Hasbro HAS, Take-Two Interactive TTWO, Activision Blizzard ATVI, and more. The stock is also up over 250% in the last three years. And Glu shares soared in after-hours trading Thursday after the company provided updated Q2 guidance.
Glu is currently a Zacks Rank #2 (Buy) and is part of a highly-ranked industry. The company was already expected to see its Q2 revenue jump over 44% to help lift its full-year sales by 20.5%. Glu on Thursday then upped its Q2 bookings range to between $162.5 and $167.5 million, up from its prior $150 to $155 million guidance. “We’ve seen significant momentum in the business and broad-based growth across our live game portfolio… with several setting new records for daily bookings along the way,” CEO Nick Earl said in prepared remarks.
Amcor plc AMCR
Prior Close: $10.00 USD (end of regular trading Thursday, May 28)
Amcor completed its purchase of Bemis in June 2019 to create a global packaging powerhouse that services an array of industries, from food and beverage to pharmaceuticals and personal care. The company’s offerings include flexible and rigid packaging, specialty cartons, and more. Amcor has also started to focus on making what it calls “increasingly light-weighted, recyclable and reusable” products that are made “using a rising amount of recycled content.”
Amcor’s push toward sustainability could prove key amid growing backlash to plastic and other forms of waste. More importantly, packaging of all types will remain a vital part of the global economy for years, if not decades to come. Looking ahead, our Zacks estimates call for Amcor’s fiscal 2020 revenue to climb 33% to reach $12.58 billion—driven by its Bemis deal.
AMCR’s adjusted earnings are projected to pop in the next two years and its earnings revisions activity helps it earn a Zacks Rank #2 (Buy) right now. Amcor, which also sports a “B” grade for Value and Growth in our Style Scores system, boasts a 4.57% dividend yield. This easily tops its industry’s 2.92% average and the S&P 500’s 1.91%. And investors should note that Amcor’s yield isn’t super artificially inflated, with the stock up 13% in the last three years.
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Activision Blizzard, Inc (ATVI) : Free Stock Analysis Report
TakeTwo Interactive Software, Inc. (TTWO) : Free Stock Analysis Report
The Walt Disney Company (DIS) : Free Stock Analysis Report
Netflix, Inc. (NFLX) : Free Stock Analysis Report
Hasbro, Inc. (HAS) : Free Stock Analysis Report
Electronic Arts Inc. (EA) : Free Stock Analysis Report
Nintendo Co. (NTDOY) : Free Stock Analysis Report
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Zoom Video Communications, Inc. (ZM) : Free Stock Analysis Report
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