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5 Quality Stocks Under $15 - 36474 views
In July I listed five stocks under $15 based on a combination of value and technical factors.
The primary purpose of this screen/system is to seek low-priced stocks still trading at reasonable valuation ratios with price momentum and a positive trend.
The second goal is to be long high-beta, riskier stocks when the market is fundamentally and technically favorable. This is accomplished by:
• investing in stocks with price momentum
• investing when the S&P 500 EPS estimate is trending upward
• investing when the S&P 500 risk premium is above 1%
• investing only when the underlying benchmark is above the 200-day moving average on the day of rebalancing/screening
As of today, the above four requirements are being met. The current top five stocks under $15 based on quality, value and momentum are UFP Technologies (UFPT), SL Industries (SLI), LJ International (JADE), ADDvantage Technologies Group (AEY) and RCM Technologies (RCMT).
Each company has a price-to-sales ratio below 1, low price-to-earnings and low long-term debt-to-equity. (ADDvantage has the highest long-term debt-to-equity ratio at 0.39.)
The drawback of the qualifying stocks is that they are all small- or micro-cap stocks that may have relatively thin trading volumes. However, all have a minimum daily volume of at least 10,000 shares.
Of special note is that RCM Technologies is currently fighting a hostile bid takeover from CDI (CDI) at $5.20 share. The outcome of this takeover attempt could affect the share price in the near future.
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