In this article, we discuss the 10 best low cost tech stocks to buy right now. If you want to skip our detailed analysis of the tech sector, go directly to 5 Best Low Cost Tech Stocks to Buy Right Now.
Over the last two decades, the stock market has owed much of its gains to the technology sector. Even in the pandemic-stricken economy of 2020, investors received a positive return on investments (ROI) from bets made in the tech sector, according to a survey by Fortune. This survey also mentions how these tech companies are increasingly adopting the use of robotics and AI, and have tripled the deployment of these technologies since 2018.
In the third quarter of 2021, the technology sector of the S&P 500 was second best at beating earnings estimates, according to a report by FactSet, with growth rate increasing from 28.6% to 32.1% over this period. A very crucial statistic in understanding the significance of tech stocks is that they represent 46% of the S&P 500’s total market capitalization, and the growth of sales is reported at two times the rate of non-tech companies.
However, at the close of 2021, figures showed that the tech-heavy Nasdaq gained 23% in the year, whereas the S&P 500 gained 28%. For the first time since 2011 and 2016, S&P 500 has finished the year above the Nasdaq Composite. This trend was driven by a return to pre-pandemic ease in business activities, and a loss of enthusiasm in tech stocks that skyrocketed during the pandemic as the stay/play/work-from-home trend shows signs of subsiding. CEO of Longbow Asset Management, Jake Dollarhide talked about this to CNBC:
“I pointed out to clients, if you’re heavy tech, you’re likely to underperform the overall market, but keep in mind how much you’ve overperformed the market the last three to four years,”
However, this trend should not worry investors. Global Marketing Strategist at JP Morgan Asset Management, David Lebovitz recently affirmed the trajectory of tech stocks, saying how they were well-positioned to generate better profit margins across the entire broader market. With increased focus on AI, robotics, cloud computing and 5G technology, tech stocks will continue to be important drivers of the economy, and present compelling investment opportunities for hedge funds and amateur investors alike. Some of the most noteworthy tech stocks include Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), Apple Inc. (NASDAQ:AAPL), and Microsoft Corporation (NASDAQ:MSFT). However, in this article, we focus on the 10 best tech stocks under $50.
Source:unsplash Our Methodology
We picked tech stocks trading below $50 that have long-term growth potential. We focused on companies working on exciting, disruptive products, and have the business acumen for explosive growth. We also used analyst ratings and hedge fund sentiment to paint a clear picture for our readers.
10 Best Low Cost Tech Stocks to Buy Right Now
10. HP Inc. (NYSE:HPQ)
Number of Hedge Fund Holders: 34
Share Price (as of January 4): $39.17
Starting off this list is HP Inc. (NYSE:HPQ), a company that deals in the provision of personal computers, printers, imaging and related solutions and services around the globe. In the third quarter, HP Inc. (NYSE:HPQ) posted an EPS of $0.94, beating consensus estimates by $0.06. Quarterly revenue of $16.68 billion beat analysts’ forecasts by $1.25 billion.
On November 24, Deutsche Bank analyst Sidney Ho kept a ‘Hold’ rating on HP Inc. (NYSE:HPQ) shares, raising the price target to $36 from $32. The analyst noted that the company showed improved performance in its supply chain, as demand grew for both its technology and enterprise businesses.
34 hedge funds reported owning HP Inc. (NYSE:HPQ) shares at the close of the third quarter. The company boasts a unique advantage as a dominant name in an industry with a high barrier to entry, and has shown high levels of competence with an impressive 5 years of EPS expansion. With share repurchases and the constant increases in dividend, HP Inc. (NYSE:HPQ) possesses room for adequate long-term compounding.
Unlike expensive tech stocks like Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), Apple Inc. (NASDAQ:AAPL), and Microsoft Corporation (NASDAQ:MSFT), HP Inc. (NYSE:HPQ) is a low cost tech stock with long-term growth potential.
9. Canon Inc. (NYSE:CAJ)
Number of Hedge Fund Holders: 8
Share Price (as of January 4): $24.37
Canon Inc. (NYSE:CAJ) is a Tokyo-based company that provides cameras, printers, copying machines and a host of other devices through its segments: Office Business Unit (BU), Imaging Systems, Medical Systems and Others. The company is the third biggest owner of active patents worldwide, and is awarded with more than 3,000 new US patents every year.
As of September, 8 hedge funds were bullish on Canon Inc. (NYSE:CAJ), holding stakes worth $64.34 million. The same number of hedge funds had long bets on the company a quarter earlier as well. On November 30, CAJ SMBC Nikko analyst Ryosuke Katsura upgraded Canon Inc. (NYSE:CAJ) to ‘Neutral’ from ‘Underperform’, setting a 2,600 yen price target.
In July 2021, Canon Inc. (NYSE:CAJ) announced a partnership with IBM, where both companies would team up to create volumetric digital video content for the entertainment industry. The AR (Augmented Reality) and VR (Virtual Reality) industry is worth $35 billion, and volumetric recording is a critical component of the technology used by this rapidly-growing industry.
8. A10 Networks, Inc. (NYSE:ATEN)
Number of Hedge Fund Holders: 14
Share Price (as of January 4): $15.63
A10 Networks, Inc. (NYSE:ATEN) is a tech company based in California, which offers cybersecurity, cloud storage and enterprise solutions to clients around the globe. As businesses and governments around the globe face a heightened risk from cyberattacks, firms like A10 Networks, Inc. (NYSE:ATEN) have benefited from increased spending on cybersecurity.
In Q3 2021, A10 Networks, Inc. (NYSE:ATEN) posted an EPS of $0.17, surpassing estimates by $0.03. Quarterly revenue of $65.36 million was also above estimates by $2.86 million. The company has recently reoriented its products and sales team towards security add-ons, and this has put the firm in a better position to meet the demands of the cybersecurity market. A10 Networks, Inc. (NYSE:ATEN)’s ADCs (Application Delivery Controllers) are becoming popular in data centers to control application delivery, amounting to record revenues despite tough competition.
In late October, BWS Financial analyst Hamed Khorsand maintained a ‘Buy’ rating on A10 Networks, Inc. (NYSE:ATEN) shares, upping the price target to $20 from $17. The firm was recorded in the portfolio of 14 hedge funds at the end of the third quarter, with combined stakes worth $188.83 million.
7. United Microelectronics Corporation (NYSE:UMC)
Number of Hedge Fund Holders: 13
Share Price (as of January 4): $11.41
United Microelectronics Corporation (NYSE:UMC) deals in semiconductor wafer foundry, and is based in Taiwan. The firm posted a revenue of $2 billion for the third quarter, exceeding expectations by $43.53 million.
As the effects of the pandemic eased around the globe and tech industry saw solid growth, global semiconductor sales increased 24% year on year in October to reach $48.8 billion, according to data from the Semiconductor Industry Association. This is good news for semiconductor companies including United Microelectronics Corporation (NYSE:UMC), which trades at a lower valuation in comparison to competitors, and also boasts advantages in several areas.
As of the end of September, United Microelectronics Corporation (NYSE:UMC) was seen in the portfolio of 13 hedge funds, showing a bullish trend from last quarter where 10 hedge funds reported owning shares of the company. Of all the hedge funds tracked by Insider Monkey, Jim Simons’ Renaissance Technologies is the leading shareholder of United Microelectronics Corporation (NYSE:UMC) shares, holding 7.3 million shares worth $83.5 million at the end of the third quarter.
In December, United Microelectronics Corporation (NYSE:UMC) announced that it was expanding its business relationship with Micron Technology (MU), providing the storage solutions company with supply chain security for its operations, and increasing collaboration across the semiconductor industry.
6. OppFi Inc. (NYSE:OPFI)
Number of Hedge Fund Holders: 11
Share Price (as of January 4): $4.62
Up next we have OppFi Inc. (NYSE:OPFI), which utilizes artificial intelligence instead of traditional credit ratings to offer loan and credit services to around 60 million American consumers who are underserved by mainstream banks. The firm operates SalaryTap, which offers payday loans targeting the subprime market. Revenue for FY2021 is recorded at $353.92 million, which is a 21.62% increase year over year. In the third quarter, OppFi Inc. (NYSE:OPFI) reported an EPS of $0.21, exceeding consensus estimates by $0.06.
OppFi Inc. (NYSE:OPFI) currently shows solid growth and increasing revenue, and reported a compound annual growth rate (CAGR) of 50% in the five years before its IPO in 2021. Owing to its focus on customer service and policy of fully disclosing all fees, the company maintains a high-level of customer satisfaction, proven with a net promoter score of 85, which is quite better than its main competitor Upstart.
In November, OppFi Inc. (NYSE:OPFI) announced reaching the milestone of facilitating 2 million plus instalment loans through its OppLoans product. The firm has collected more than 7 billion informative data points to further build its AI-powered proprietary scoring algorithm, increasing its auto approvals to 58% for Q3 2021. In order to retain its customers, OppFi Inc. (NYSE:OPFI) plans to launch new lending, saving and investing products down the road.
As of the third quarter, 11 out of 867 hedge funds tracked by Insider Monkey held stakes in OppFi Inc. (NYSE:OPFI) worth $12.84 million. Driehaus Capital was the leading shareholder of the firm in the third quarter, holding approximately 720,000 shares worth $5.67 million.
Like Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), Apple Inc. (NASDAQ:AAPL), and Microsoft Corporation (NASDAQ:MSFT), OppFi Inc. (NYSE:OPFI) is a tech stock attracting the attention of investors.
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Disclosure: None. 10 Best Low Cost Tech Stocks to Buy Right Now is originally published on Insider Monkey.