Things seem to start looking up this year finally. The United States economy added 467,000 jobs in January, contrary to the expectations of job losses amid a record-breaking surge of COVID-19 cases. While the January job growth was remarkable in itself, it was associated with major upward revisions of November and December’s employment gains.
On top of it, the S&P 500 and the Nasdaq Composite jumped on Friday to finish its best week this year, driven by strong earnings reports rolling in. The broad market index rose 0.5% to 4,500.53, while the tech-heavy Nasdaq climbed 1.6% to 14,098.01. For the week, the S&P 500 is 1.5% higher, and the Nasdaq rose 2.4%.
Investing in low-priced, high-quality stocks remains a noteworthy method of investing, providing investors the advantages of low initial investment and owning more shares to amplify their returns. That’s why today we're highlighting 3 stocks from our Top 10 Under $10 screen, which is just 1 of the 10 outperforming screens in our POWR Screens 10 service (more on that below). I believe investors should consider buying fundamentally sound stocks under $10, such as ICL Group Ltd (ICL), Information Services Group, Inc. (III), and TransGlobe Energy Corporation (TGA).
ICL Group Ltd (ICL)
ICL, formerly known as Israel Chemicals Ltd., is a specialty mineral and chemicals firm operating worldwide through the segments of Industrial Products; Potash; Phosphate Solutions, and Innovative AG Solutions (IAS). The Israel-based company markets its product portfolio through agents, distributors, and marketing enterprises.
On December 22, ICL announced that it would be supplying clear brine fluids to the United Arab Emirates directly from Israel. The company expected to supply $6 million of materials by the end of 2021 and to further increase its clear brine fluids sales to the country over 2022.
On December 3, ICL declared that the North York Moors Park Authority Planning Committee approved the ICL Boulby Mine’s application to continue polyhalite and salt production for further 25 years, which is expected to begin in 2023 when the current planning permission expires. This should prove to be beneficial for the company.
On December 2, ICL opened its newest alternative-protein production facility in St. Louis, aiming to transform plant protein into meat-like fibers that can be used in various foods. The new facility should expand the company’s operational capability by catering to the growing demand for plant-based food and meat alternatives.
For the fiscal third quarter ended September 30, ICL’s sales increased 48.7% year-over-year to $1.79 billion. Gross profit improved 88.8% from the prior-year quarter to $689 million. Net income and EPS came in at $242 million and $0.17, respectively, up 310.2% and 325% from the same period the prior year.
The consensus EPS estimate of $0.51 for fiscal 2022 indicates an 8.5% year-over-year increase. Likewise, the consensus revenue estimate for the same year of $6.67 billion reflects an improvement of 3.9% from the prior year. Moreover, ICL has an impressive surprise earnings history, as it has topped consensus EPS estimates in three out of the trailing four quarters.
The stock has gained 76.2% over the past year and 31.6% over the past six months to close Friday’s trading session at $9.46.
ICL’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
ICL has a Growth grade of A and a Stability, Sentiment, and Quality grade of B. In the 89-stock Chemicals industry, it is ranked #7. The industry is rated A. Click here to see the additional POWR Ratings for ICL (Value and Momentum).
Information Services Group, Inc. (III)
III is a technology research and advisory company operating in the Americas, Europe, and the Asia-Pacific. The company’s offerings include digital transformation services, sourcing advisory, market intelligence, technology research, and analysis services.
On January 25, III announced the launch of ISG Executive Insights™, a market intelligence and data analytics platform that can address the challenges of managing increasingly complex supplier ecosystems. About this new platform, Todd Lavieri, Vice Chairman and President, ISG Americas, and the Asia Pacific said, “ISG Executive Insights turns the data we gather and analyze in the course of advising on more than $18 billion of annual contract value every year into actionable intelligence for global clients and all ecosystem participants across all sectors of the marketplace.”
On January 5, III declared the expansion of its partner ecosystem by forming a partnership with Soroco, a work-graph-based process discovery provider. Under the partnership, the company is expected to provide its clients Soroco solutions. The alliance aligns with III’s strategy of partnering and leveraging automation software and service providers to offer its clients automation solutions.
III’s revenues increased 15.3% year-over-year to $71.10 million in the fiscal third quarter ended September 30. Operating income rose 144.2% from the same period the prior year to $7.26 million. Adjusted net income and adjusted EPS improved 14.1% and 20% from the prior-year quarter to $5.95 million and $0.12, respectively.
Street EPS estimate for fiscal 2021 of $0.43 indicates a 53.6% year-over-year rise. Likewise, Street revenue estimate of $276.22 million for the same year reflects an increase of 10.9% from the prior year. In addition, III has beaten consensus EPS estimates in each of the trailing four quarters, which is impressive.
Over the past year, III’s shares have gained 82.8% to close Friday’s trading session at $6.80. It has gained 14.5% over the past six months.
It’s no surprise that III has an overall A rating, which translates to Strong Buy in our POWR Rating system. The stock has an A grade for Sentiment and a B grade for Growth, Value, and Quality. III is ranked #1 in the 5-stock Outsourcing – Management Services industry. The industry is rated A. To see the additional POWR Ratings for Momentum and Stability for III, click here.
TransGlobe Energy Corporation (TGA)
TGA and its subsidiaries acquire, explore, produce, and develop crude oil and natural gas in Egypt and Canada. It holds 100% working interests in four Production Sharing Concessions (PSCs) in West Gharib, North-West Gharib, West Bakr, and South Ghalazat in Egypt. It also owns working interest assets in Cardium and Ellerslie formation in the Harmattan area of Western Canada.
On January 20, TGA announced the execution of its concession agreement, consolidating and amending its three existing Eastern Desert concession agreements (West Gharib, West Bakr, and North West Gharib). The Egyptian Parliament ratified the agreement in December 2021 and is expected to give the company added time to exploit its existing producing fields in the region to their utmost potential.
For the fiscal third quarter ended September 30, TGA’s revenue increased 243.3%% year-over-year to $57.87 million. Net earnings came in at $37.08 million, while net earnings per share stood at $0.51, both up substantially from their negative year-ago values.
The consensus EPS estimate of $0.70 for fiscal 2022 indicates a 363.2% year-over-year increase. Likewise, the consensus revenue estimate for the same year of $146.62 million reflects an improvement of 0.6% from the prior year.
TGA’s stock has gained 165.4% over the past year to close Friday’s trading session at $3.37. It has gained 104.2% over the past six months.
This promising outlook is reflected in TGA’s POWR Ratings. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system. TGA has an A grade for Momentum, Sentiment, and Quality and a B grade for Growth and Value. It is ranked #3 in the A-rated, 46-stock Foreign Oil & Gas industry. To see the additional POWR Rating for Stability for TGA, click here.
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ICL shares were trading at $9.70 per share on Monday afternoon, up $0.24 (+2.54%). Year-to-date, ICL has gained 0.31%, versus a -5.23% rise in the benchmark S&P 500 index during the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research.
3 Best Stocks to Buy Under $10 in February: ICL Group, Information Services Group, and TransGlobe Energy StockNews.com
