Wall street has grown even more bullish of late in anticipation of increased government spending under the Biden administration and a return to national economic health with an accelerated coronavirus vaccine rollout. While many stocks are riding very high price wise, not all are. On close examination, there are several high-quality stocks that are still trading at affordable prices and could yield high returns.
While investing in low-priced stocks is typically riskier than investing in large-cap companies, the potential returns from some of these companies more than offset the investment risks. In fact, taking a position in stocks at affordable prices can benefit an investor significantly from the company’s long-term growth.
We think Alliance Resource Partners (ARLP), Rimini Street, Inc. (RMNI), and Orion Group Holdings, Inc. (ORN) are three such stocks. They are trading at less than $10 despite witnessing a solid run over the past year. These companies have proven business models and the required fundamental strength to continue driving the performance of their stocks.
Alliance Resource Partners (ARLP)
ALRP produces and markets coal to enterprise and industrial consumers in the U.S. The company has coal mines in Kentucky, Maryland, Indiana, Illinois, and West Virginia. ALRP’s stock has gained 91.3% over the past six months to close yesterday’s trading session at $6.12.
The company recently opened a new mining operation in Appalachia. It has also booked commitments for the supply of 9.9 million tons of coal until 2025.
For the quarter ended December 31, 2020, ALRP reported an increase in revenue of 3.1% sequentially. Its EBITDA rose 28.8% during the same period.
ARLP is expected to see a revenue growth of 26.9% for the quarter ended March 31,2021 and 14.7% in 2021. Its EPS is estimated to grow 15.9% in 2021 and at a rate of 13.6% per annum over the next five years.
The POWR Ratings are also high on ARLP. It has an Overall Rating of A, which translates to a Strong Buy. The POWR Ratings are calculated by considering 118 different factors with the weighting of each optimized to improve overall performance.
In total, we rate ARLP on eight different levels. Beyond what we stated above, we also have given ARLP grades for Stability, Value, Momentum, and Growth. Get all the ARLP ratings here.
It is also good to know that the MLPs – Other industry is ranked #35 out of 124 industries. And in this top-rated group, RPM is ranked #2 out of 13 MLPs – Other stocks.
Rimini Street, Inc. (RMNI)
RMNI delivers software support services to enterprise clients. The company’s services include support for PeopleSoft, Oracle Database, Oracle Retail, Hyperion, and many others. RMNI’s stock has returned 79.3% over the past year to close yesterday’s trading session at $8.5.
RMNI recently became an approved supplier in New Zealand’s open marketplace. This means new clients there can more easily obtain RMNI’s services without incurring the cost of negotiating their own contract. Also of note, Pulse Electronics, a leading provider of automotive components, recently signed with RMNI to provide SAP software support services.
For the quarter ended September 30, 2020 RMNI reported an increase in revenue of 19.3% year-over-year. The company’s calculated billings were up 33.3% during the same period.
RMNI’s revenue is estimated to increase 9.4% for the quarter ended December 31, 2020 and 13.7% in 2021. Its EPS is expected to rise 20.8% in 2021 and at the rate of 15% per annum over the next five years.
It’s no surprise that RMNI has an overall rating of A, which equates to Strong Buy in our POWR Ratings system. RMNI has an A grade for Quality. In the 60-stock Software – Business industry, it is ranked #2.
Click here to see the additional POWR Ratings for RMNI (Growth, Value, Stability, Momentum, and Sentiment).
Orion Group Holdings, Inc. (ORN)
ORN is a marine infrastructure contractor that services the civil marine industry. The company has operations in the U.S. , Canada, and the Caribbean. ORN’s stock price has increased 23.2% over the past year to close yesterday’s trading session at $6.11.
ORN recently announced that it had been awarded contracts totaling $27 million. The company also recently elected Austin J. Shanfelter as the chair of its board of directors as a part of the company’s board refreshment process.
For the quarter ended September 30, 2020, the company’s operating income increased 114% versus the same period last year. Its EBITDA increased 14% during the same period.
ORN’s revenue is expected to grow 1.7% for the quarter ended March 31, 2021. Its EPS growth is expected to be 700% for the quarter ended December 31, 2020.
ORN’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 ratings system. ORN has an A grade for Sentiment and Value. In the B-rated, 86-stock Industrial – Services industry, it is ranked #2.
Beyond what we stated above we also have given ORN a grade for Growth, Quality, Stability, and Momentum. Get all the ORN ratings here.
The POWR Ratings are calculated by considering 118 different factors with the weighting of each optimized to improve overall performance.
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ARLP shares were trading at $6.52 per share on Friday afternoon, up $0.40 (+6.54%). Year-to-date, ARLP has gained 45.54%, versus a 4.65% rise in the benchmark S&P 500 index during the same period.
About the Author: Aaryaman Aashind
Aaryaman is an accomplished journalist that’s passionate about providing in-depth insights about investing and personal finance. Recently he has been focused on the stock market and he specializes in evaluating high-growth stocks. More...
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