While the digitalization and innovation industries suffered sharp losses this year, the volatility opened doors for the best tech stocks to buy. For this exercise, though, we’re going to explore the speculative side of the spectrum. Each of these names trades hands (at the time of writing) for no more than $5.
While a treacherous endeavor, these tech stocks to buy could expand 10 times over by the year 2030. Along with a ticket price no greater than a Lincoln, the market ideas below feature both an undervalued profile (based on either traditional or proprietary calculations) and low risk. To be clear, the latter attribute aligns with a relative basis. Obviously, you’re much better off engaging blue-chip securities. But the established players simply don’t offer the potential of tech stocks to buy that could turn Lincolns into Grants.
If you’re ready to play with the speculative portion of your portfolio, simply read on.
| ABANF | Automatic Bank Services | $5.00 |
| BYDIF | BYD Electronic | $2.60 |
| MCRNF | Micro-Mechanics | $2.18 |
| APPEF | Appen Ltd. | $1.69 |
| MNDO | MIND C.T.I. | $2.14 |
| NMYSF | NamSys | $0.49 |
| SCTQ | Spectra Systems | $1.63 |
Automated Bank Services (ABANF)
Based in Israel, Automated Bank Services (OTCMKTS:ABANF) provides financial technology (fintech) and credit card services. Currently, the company commands a market capitalization of 630.4 million ILS (roughly translating to $177.9 million). The average volume is extremely low, however, so prospective investors must exercise caution. On a year-to-date basis, ABANF lost 37%. Shares trade hands for exactly $5 at the time of writing.
Although Automated Bank draws significant questions, it’s also well worth consideration among speculative tech stocks to buy. Fundamentally, the company represents a relative juggernaut. For instance, on the income statement, the business features a three-year revenue growth rate of 16.7%, ranked better than nearly 72% of the competition. On the bottom line, Automated Bank’s net margin stands at nearly 30%, higher than over 95% of its peers.
Finally, the fintech firm enjoys a stout balance sheet. Most notably, it features a strong cash position, evidenced by its cash-to-debt ratio of 7.6 times. In contrast, the industry median is only 3.2 times.
BYD Electronic (BYDIF)
Based in China, BYD Electronic (OTCMKTS:BYDIF) manufactures handset components and assembles mobile phones for its customers. BYD’s customers included well-known international enterprises. Currently, BYD carries a market cap of 45.3 billion HKD (roughly $5.77 billion). Average trading volume pings low, only 1,550 shares. At the time of writing, BYDIF trades hands for $2.50 a pop. Shares lost 31% YTD.
Based on Gurufocus.com’s proprietary calculations, BYD is a significantly undervalued investment. Against traditional metrics, the company features a price-to-sales ratio of 0.45, below the industry median of 1.16. On the income statement, BYD commands a three-year revenue growth rate of 32.7%, ranking better than 94% of the industry. As well, its book growth rate during the same period is 17.8%, better than 82% of its peers. Finally, investors seeking speculative but smart tech stocks to buy should consider BYD’s balance sheet. With an Altman Z-Score of just under 4 points, it reflects low bankruptcy risk.
Micro-Mechanics (MCRNF)
Based in Singapore, Micro-Mechanics (OTCMKTS:MCRNF) designs, manufactures, and markets high-precision parts and tools used in process-critical applications. Presently, the company features a market cap of 383.73 million SGD (roughly $271.5 million). The average trading volume is only a hair above 1,000 shares. Since the start of the year, MCRNF declined 19%. At the moment, shares trade hands for $2.18 a pop.
While probably not the most popular public enterprise, Micro-Mechanics provides much bang for the buck. Fundamentally, the company enjoys a very strong balance sheet. Most notably, the precision-parts manufacturer features a cash-to-debt ratio of 12.6 times, higher than the industry median of 2.12 times. As well, Micro-Mechanics has an Altman Z-Score of nearly 20 points, reflecting extremely low bankruptcy risk.
However, the star of the show for the enterprise centers on profitability. For example, Micro-Mechanics features a net margin of 24%, ranking better than nearly 83% of its rivals. Also, it’s a high-quality business, demonstrated by its return on equity of 34.3%, beating out 91% of sector players. Thus, it’s worth speculators’ time to tech stocks to buy.
Appen (APPEF)
Based in Australia, Appen (OTCMKTS:APPEF) provides or improves data used for the development of machine learning and artificial intelligence products. Data types include speech and natural language data, image and video data, text and alphanumeric data, and relevant data to improve search and social media engines.
Currently, Appen features a market cap of nearly 315 million AUD (almost $202 million). At the time of writing, APPEF trades hands for $1.69 a share. Average trading volume runs extremely low, presenting tactical risks for prospective participants. Since the start of the year, APPEF dropped 78% in equity value.
Fundamentally, Appen’s strengths center on its income statement. On the top line, its three-year revenue growth rate stands at 14.9%, ranking better than nearly 69% of the industry. Its book growth rate during the same period is also a lofty 51.3%. On the bottom line, the company enjoys seven years of consecutive profitability. Thus, while risky, it’s worth considering for tech stocks to buy.
Mind C.T.I. (MNDO)
Headquartered in Israel, Mind C.T.I. (NASDAQ:MNDO) is a global provider of billing and customer care solutions for voice, data, video, and content services. Presently, Mind carries a market cap of $42.6 million. At the time of writing, shares trade hands for $2.13. As well, the average volume is quite high for a speculative investment at 26,200 shares. Since the start of the year, MNDO slipped 32%.
Fundamentally, Mind brings fiscal stability and strong margins to the table, making it an intriguing idea among tech stocks to buy under $5. Primarily, the company enjoys a strong cash position, evidenced by its cash-to-debt ratio of 12.7 times. In contrast, the industry median is 3.2 times. Additionally, its Altman Z-Score is 4.73, reflecting low bankruptcy risk.
Regarding the bottom line, Mind features a net margin of nearly 24%. That’s far above the industry median of 1.92 times, better than over 93% of its peers. Plus, the company commands a return on equity of over 26%, reflecting a high-quality business.
NamSys (NMYSF)
Based in Ontario, Canada, NamSys (OTCMKTS:NMYSF) is a fully integrated cash management software. It claims to put control in the users’ hands and cost savings in the bank. Currently, NamSys features a market cap of 16.9 million CAD (translating to about $12.4 million). Since the start of the year, NMYSF (which trades hands at 49 cents a pop) dropped approximately 22%.
As noted by Gurufocus.com, NamSys is a significantly undervalued business. As of this writing, NMYSF trades at 13.7 times trailing-12-month earnings. However, the industry median is 24.2 times. Further, NamSys’ price-to-FCF is 11 times, well below the sector median of 21.5 times.
However, during these uncertain times, investors may most appreciate NamSys’ balance sheet. Specifically, the company carries zero debt, providing it tremendous flexibility should troubles sprout. Also, NamSys is another speculative name with a high-quality business, as reflected by its return on equity of 26%. This stat ranks higher than 90.5% of its sector peers.
Spectra Systems (SCTQ)
Headquartered in Rhode Island, Spectra Systems (OTCMKTS:SCTQ) is an established world leader in providing security technology that includes software and advanced materials for use in banknotes, product authentication, and gaming, per its website. Currently, the company carries a market cap of 69.8 million GBP (roughly $80.7 million). At the moment, SCTQ trades hands for $1.63 a pop. Since the January opener, shares dropped 18.5%.
Before moving any further, investors should realize that SCTQ represents an unregistered security. Per Investopedia, “Only qualified investors, or individuals who have a net worth of at least one million dollars or an annual income in excess of $200,000, are able to buy and sell unregistered securities.” Still, for those that do qualify, Spectra brings a lot to the table regarding tech stocks to buy.
Primarily, the company enjoys outstanding profitability metrics. Its operating and net margins are 34.9% and 27.3% respectively. Each of these stats represents levels much higher than industry norms. Also, the company has a strong balance sheet, with a cash-to-debt ratio of over 20 times.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
