It isn't often that you find tech stocks priced below $20. There is a psychological component to investing for value investors, which favors stocks priced below their values. Value investors gravitate toward affordably priced stocks that have the potential to increase in value. This means low-priced tech stocks that have the potential to pop.
In some cases, the mere fact that a tech stock is priced around or below the $20 benchmark is enough to attract new investor dollars. After all, an ownership share in a business in which you own hundreds or even thousands of shares has that much potential to increase in value simply because the prospective investor pool is much larger than that of the industry's high-flyers.
Below, we provide a look at two intriguing tech stocks priced below $20: Box (BOX) and Absolute Software Corporation (ABST).
Box (BOX)
BOX was incorporated half a dozen years ago. Based in Redwood City, CA, BOX provides a platform for the management of cloud content. The BOX platform empowers users who are both internal and outside of a business to collaborate. BOX's platform is useful for content creation, automation, data security, and creating custom-tailored applications. Companies in all sorts of different sectors ranging from energy to education, financial services, government, construction, life sciences, and healthcare pay for BOX's cloud content management platform.
BOX has an overall POWR Ratings grade of A, indicating it is a Strong Buy. BOX has an A grade in the Value component of the POWR Ratings along with B grades in the Quality and Growth components. If you would like to know how BOX fares in the Sentiment and Stability components, you can find out by clicking here. Of the 80 publicly traded companies in the Technology - Services industry, BOX is ranked 5th. Click here to find other top stocks in the Technology - Services space.
Based on nine analysts covering the stock, the average analyst price target for BOX is $23.33, indicating a potential 25% upside. The highest analyst price target is $28. Of the dozen analysts issuing BOX recommendations, six consider it a Buy, three consider it a Hold, and two consider it a Strong Buy.
Box has a reasonable forward P/E ratio of 25.89, especially considering it is a tech stock. At the moment, BOX is priced a mere $3.50 away from its 52-week high of $22.09.
BOX blasted past its fourth-quarter earnings estimates, beating the Street consensus estimate by nearly 30%. The company made 22 cents per share compared to 7 cents per share in the same quarter one year ago. Part of BOX's success lies in the fact that it provides more than mere cloud storage. For example, BOX's Box Shield empowers users to tailor digital security classifications to their needs with the assistance of machine learning, making it that much easier to identify digital threats. Add in the fact that BOX acquired Docusign (DOCU) rival SignRequest and there is even more reason to hop on the BOX bandwagon.
Absolute Software Corporation (ABST)
ABST offers endpoint security solutions and management industry services. Examples of ABST services and products include data protection, data loss prevention, IT service management, enterprise mobility management, and lifecycle management.
ABST has a comparably high forward P/E ratio of 87, meaning there is an argument to be made that it is overvalued. However, the stock's 52-week high is $19.99. ABST is currently trading around $14.50.
ABST has an A grade in the Quality component of the POWR Ratings and B grades in the Momentum, Value, and Stability components. Investors who are curious about how ABST performs in the Growth and Sentiment components can do so by clicking here. All in all, ABST is ranked 14th of more than 110 stocks in the Software - Application industry. You can find other top stocks in the industry by clicking here.
Click here to check out our Software Industry Report for 2021
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BOX shares were trading at $18.20 per share on Thursday afternoon, down $0.47 (-2.52%). Year-to-date, BOX has gained 0.83%, versus a 0.67% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management.
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