The market is starting to feel a bit "toppy" here and it is definitely becoming a stock picker's market. I am looking at stocks right now that are not followed much by Wall Street, have solid valuations and good growth prospects. Here are two $3 stocks that meet these criteria.
"Innodata Inc. (NASDAQ:INOD) engages in the provision of business process, technology, and consulting services, as well as products and solutions that help to create, manage, use, and distribute digital information." (Business description from Yahoo Finance)
Four reasons INOD is a bargain at just over $3 a share:
- Several insiders have bought over 40,000 shares in numerous transactions over the last two weeks.
- The company has a solid balance sheet with almost $25mm in net cash (30% of market capitalization) on its books.
- The stock is selling at just over 9 times forward earnings (just over 6 times subtracting cash), a discount to its five year average (16.9).
- The stock is selling at the bottom of its five year valuation range based on P/B, P/S, P/E and P/CF. INOD has a miniscule five year projected PEG (.41).
Four reasons Lionbridge has solid value at $3 a share:
- The stock is selling near the bottom of its five year valuation range based on P/S, P/E and P/CF.
- Earnings are going in the right direction. The company made just 3 cents a share in FY2011 but is on track to have that jump to 16 cents this year and analysts project 28 cents a share in FY2013.
- The company has easily beat earnings estimates the past five straight quarters and the stock is selling at under 11 time forward earnings, a discount to its five year average (25.9).
- Analysts expect 7% to 8% revenue growth for both FY2012 and FY2012 and LIOX has a five year projected PEG of under 1 (.96).