As the holidays wind down, consumers often hit the stores and Internet to hunt for good bargains. Similarly, despite the stock market's climb to record highs, there are still some compelling buys out there.
Let's take a look at a few of the more intriguing sub-$20 stocks that have the growth drivers to potentially double in the coming months.
What is Driving BlackBerry's Resurgence?
Veteran investors will recall BlackBerry (NYSE:BB) as the old mobile phone maker that went the way of the dinosaurs as Apple's iPhone came onto the scene. Long left for dead, the company has since reinvented itself and become relevant again in the technology world.
Now a diversified security software developer, Canada-based BlackBerry is piling up new business wins and high-profile partnerships with big tech players. In the last few months alone, it announced an integration of its critical event management platform with Microsoft Teams, formed a similar alliance with ServiceNow, and revealed a collaboration with autonomous driving truck technology company providerPlus to integrate its QNX technology.
At beginning of the month, BlackBerry announced the signing of a multi-year deal with Amazon Web Services (AWS) to develop a connected vehicle software platform. The plan is to integrate BlackBerry's real-time operating system with AWS's Internet of Things (IoT) services in cars and to then market it to major car manufacturers.
Investors can expect the positive headlines to keep flowing for BlackBerry as it expands the reach of its well-regarded technology. BlackBerry has risen from the ashes to become a leader some of the fastest growing areas of technology—enterprise mobility management and IoT. This is expected to result in solid demand from enterprise and government customers worldwide.
From a technical standpoint, the gap up in the stock in massive volume this month suggests there is plenty more where that came from. Since spiking on December 1st when more than 300 million shares traded hands, BlackBerry has pulled back towards its 50-day moving average in relatively light volume. This is shaping up to be an ideal pullback scenario as the stock prepares to make its next climb.
Is The Container Store a Good Stay-at-Home Play?
The Container Store (NYSE:TCS) stock has more than doubled year-to-date but has the momentum to rise further. The specialty retailer of storage and organization products is an unlikely comeback story. After its stock flatlined for the better part of the last four years, investors have been buying in.
The catalyst here has been and will continue to be homebound consumers spending money on home improvement projects. People are directing their attention like never before towards setting up home offices, organizing closets, and remodeling kitchens to get their most out of their abodes. This is translating into strong demand for The Container Store goods and in-home design services through both its retail and online channels. Meanwhile, an improved cost structure and supply chain efficiencies are driving higher operating margins.
As the only retailer focused on storage and organization, The Container Store lacks a direct competitor. This along with the pandemic-related tailwinds should make for a clear path to revenue growth. Plus, at 15x forward earnings, the stock offers a nice blend of growth and value.
Last week a symmetrical continuation triangle pattern formed on The Container Store's chart. The bullish intermediate pattern suggests the stock could run up to as much as $15 over the next couple months. If it does, this would get it about halfway to double territory.
The timing looks good for an entry in this stock. After touching close to $14 in above average volume, it has dipped back a few bucks. But without any major news or change to the fundamentals, investors should make space for this surging stay-at-home play.
What Does Luna Innovations Do?
Luna Innovations (NASDAQ:LUNA) is a small but mighty technology company that makes a range of products for the defense, energy, health care, and communication sectors. This includes sensors, instruments, and materials that measure and protect its customers critical processes.
The prospects for growth both organically and inorganically are interesting. Luna's core Lightwave segment that serves the $2.5 billion sensing and testing markets is forecast to grow 18% to 20% with roughly half of revenue derived outside the Americas region.
Mostly focused on the military and defense industries, the Luna Labs division is more of a mid-single digit growth business. However, having been recently selected by Lockheed Martin to supply corrosion sensors for the company's NASA Artemis mission, things are quite literally looking up.
On the acquisition front, Luna strategically targets complementary companies that are accretive to earnings. After acquiring General Photonics in 2019, it recently announced the buyout of OptaSense to solidify its strength in the global fiber sensing market.
The appeal with Luna is that its fiber measurement technology offers provides speed and accuracy to customers in growth markets like infrastructure and automotive. Its communications testing products make it a player in the global buildout of 5G networking while its sensing solutions have growth applications in vehicle lightweighting, smart infrastructure, and IoT. As more is asked of broadband capacity and data centers, Luna's solutions are expected to be in demand.
Luna's chart also formed a bullish symmetrical continuation triangle pattern last week. This points to a possible ascent to the $11.70 to $12.10 range within just a few weeks. If Luna shares continue to take a breather as they have the last few days, investors should sense a buy opportunity.
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8 Stocks That Robinhood Investors Got Right
The online investing app Robinhood has been a clear pandemic winner. As more Americans were forced to work from home, many made the decision to begin testing their investing skills by trading stocks. Robinhood appeals to millennial and/or novice investors for several reasons. First, the app makes it fun. You might say it “gamefies” stock trading. With commission-free trades, investors have an incentive to trade frequently. And many users of the app do just that.
The second reason is that it allows investors to buy partial (or fractional) shares. Although Robinhood is often associated with penny stocks, the app lets investors buy shares of “pricey” stocks like Tesla (NASDAQ:TSLA) without having to pay for a full share right away.
And data shows that Robinhood investors have a healthier risk appetite than other investors. And that appetite has increased since the start of the pandemic. This lines up to the time when investors had more time on their hands.
With that said, many Robinhood investors have been, quite frankly, using the app to engage in a legal form of gambling. I say this because trying to dive quickly in and out of the market in an attempt to capture a profit may work. But historically, it’s a path to ruin.
However there are two sides to every story. And the same is true of Robinhood investors. There are many examples of where these investors have gotten it right. In this presentation, we’ll show you eight examples of stocks that the market and Robinhood investors have gotten exactly right.
View the "8 Stocks That Robinhood Investors Got Right".