Some investors are drawn to lower-priced stocks, with the idea that they’ll own more shares for less money. That’s one reason penny stocks hold allure for some investors. However, the price of a stock matters far less than whether the company’s business model has a track record of success.
But if you’re looking to stay under $20 a share, these three Motley Fool contributors believe you should check out…
A smart play for the smart home
Daniel Miller (Control4): One stock flying under the radar as a long-term play for the future of smart homes is Control4. The company is a leading global provider of automation and networking systems for homes and businesses that can consolidate hundreds of smart-home products and platforms — anything from music and video to security and communications. After a rocky 2018, the company is now trading under $20.
What catalysts make Control4 an intriguing stock? Well, there’s plenty of room for growth in the U.S., with management estimating its current market penetration at about 1.6%, and its certified showroom program should help drive interest and sales leads. There are 200 certified showrooms, with about 30 more coming online in the first half of 2019, enabling more consumers to see the vast number of products and solutions in an environment built to impress and wow them. The showrooms should increase traffic, increase sales leads, improve lead conversions, and build a referral network for future sales.
Beyond the U.S. remains a tantalizing global opportunity that’s just getting started. In early February, Control4 announced an expansion into New Zealand, Switzerland, and Ireland. The expansion into Switzerland went hand in hand with the company’s acquisition of NEEO, known for the industry-acclaimed NEEO remote control, and further established its engineering and footprint in Europe.
Control4 is currently trading lower than $20 per share, with a price-to-earnings ratio of 10, and it’s far below its 52-week high of $37 per share. If the showrooms generate more interest and sales leads as the U.S. slowly increases the number of smart homes needing comprehensive solutions, and the company expands internationally, then the future remains lucrative for investors.
An inexpensive Southeast banking franchise
Jordan Wathen (Regions Financial): Regions Financial is an outlier, in that it generates the bulk of its deposits from individuals’ small-dollar accounts but makes most of its loans to business and commercial customers. In that sense, it looks more like a massive community bank than a run-of-the-mill regional bank….
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