Worries about inflation trends, higher interest rates, and the market’s rising valuations in the face of a challenging pandemic economy have recently pushed many investors away from high-priced tech stocks and into safer value stocks…
But rather than selling all their tech stocks in a blind panic, investors should calm down and take a closer look at the low-priced stocks in the expensive tech sector. Today, we’ll review three high-quality technology businesses with deceptively low share prices. Here’s why you should consider starting a position in Skillz (NYSE:SKLZ), TTM Technologies (NASDAQ:TTMI), or FireEye (NASDAQ:FEYE) right now for less than $20 per share.
1. Skillz: $13.73 per share
Skillz has monetized the idea of playing mobile games against other people, where the winners walk away with some extra cash in their pocket. Much like fellow gaming platform operator Roblox (NYSE:RBLX), Skillz doesn’t develop the actual gaming experiences itself. These companies leave the game design to third-party companies or ordinary users, which creates a whole new level of user engagement. At the same time, Roblox and Skillz benefit from vibrant game portfolios with minimal development costs of their own.
As the manager and operator of a gaming platform with real-money winnings, Skillz focuses its business operations on ensuring a level playing field with cheat-detection algorithms, prize fulfillment processes, and customer support. The growth story has only just begun, with about half a million paying users on the Skillz platform in the first quarter. In that report, top-line sales nearly doubled year over year, and Skillz reported a gross profit margin of 95%.
The company is still unprofitable because every available penny is reinvested in growth-promoting activities such as platform development and an expensive marketing program. The company is expanding its user base as quickly as possible, setting the stage for robust profits a few years down the line.
The classic growth-stock strategy ensured that Skillz was tangled up in the spring’s retreat from high-flying tech stocks. The stock is trading 37% below February’s 52-week highs. For growth-minded investors, Skillz is the low-priced tech stock of choice right now.
2. TTM Technologies: $14.88 per share
TTM Technologies, a maker of printed circuit boards, is a different story. This isn’t a high-powered growth stock but a rock-solid value play. TTM’s shares can be bought for just 10 times forward earnings or 0.7 times trailing sales, and the analyst consensus points to average annual earnings growth of 20% over the next five years.
The company recently unloaded its volatile and barely profitable mobility business. The sale of four China-based mobility product factories bolstered TTM’s balance sheet with a…
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