9 Undervalued Stocks Under $10

Tickers in this article: AWC BITA DSGX EGY EJ FCH FIG GFA HRG

Are you looking for undervalued stocks at a low price? This list could be just what you’re searching for. [Related Lists:  2 Drug Stocks Under $10 to Pick as Favorites ]

To create the list below we started with a universe of stocks trading below $10 with a market cap above $300M. This helps us to avoid the higher risk penny stocks. Our next step was to search for companies that are potentially undervalued, and we did this by looking for an Earnings Per Share/Price mismatch. 

EPS/Price Mismatch

EPS (Earnings Per Share) is the measure of the total profit associated with one share after dividend distribution. Higher EPS and faster EPS growth are both positive signs of profitability.

What our screen did was analyze companies whose projected EPS has increased over the last 30 days at a higher rate than its price. A mismatch in price and EPS trend  signals the stocks may be undervalued.

For example, Vaalco Energy ( EGY) over the last 30 days has seen its EPS estimate for the year increase 6.11%, but its price has declined 6.77% during that same time span. What this tells us is that the price is going down while the company is predicted to be more profitable. 

Do you think the mismatches explained in the list below represent a good buy-in opportunity for value investors?

(This screen assumes that P/E is equal to a constant, k. For another explanation check this  post

The List

INTERACTIVE CHART: Use the Compar-O-Matic to see average analyst recommendations over the last 2 years for the companies listed below:

Read descriptions for all companies mentioned

1. Alumina Ltd. ( AWC): Alumina, through its 40 % equity interest in Alcoa World Alumina and Chemicals, engages in the bauxite mining, alumina refining, and aluminum smelting businesses. Market cap at $3.38B, most recent closing price at $4.82.

The EPS estimate for the company's current year increased from 0.07 to 0.08 over the last 30 days, an increase of 14.29%. This increase came during a time when the stock price changed by -3.21% (from 4.98 to 4.82 over the last 30 days).
 

2. Bitauto Holdings Limited ( BITA): Provides Internet content and marketing services for the automotive industry in the People's Republic of China. Market cap at $401.83M, most recent closing price at $9.65.

The EPS estimate for the company's current year increased from 0.7 to 0.84 over the last 30 days, an increase of 20%. This increase came during a time when the stock price changed by 13.66% (from 8.49 to 9.65 over the last 30 days).
 

3. Descartes Systems Group Inc. ( DSGX): Provides federated network and logistics technology solutions. Market cap at $593.92M, most recent closing price at $9.48.