After a disappointing first half of the year, the stock market has recovered significantly since July. Better-than-expected corporate earnings, a red-hot-job market, improved consumer sentiment, and a slight decline in the consumer price index last month have driven investor confidence in the market.

However, some analysts remain skeptical about the market’s momentum as soaring inflation and monetary tightening risks persist. Minutes from the Federal Reserve’s recent policy meeting indicate that the central bank would continue with the interest rate hikes until inflation comes down to its target level. Therefore, the market is expected to remain under pressure.

Given the uncertainty surrounding the market, investors can consider buying under $10 stocks Assertio Therapeutics, Inc. (ASRT), Rackspace Technology, Inc. (RXT), and LSI Industries Inc. (LYTS), which have enough fundamental strength to rebound.

Assertio Therapeutics, Inc. (ASRT)

ASRT is a specialty pharmaceutical company that offers medicines in different treatment areas, including neurology, pain, and inflammation. The company provides INDOCIN, an oral solution to treat moderate to severe rheumatoid arthritis, and CAMBIA, a non-steroidal anti-inflammatory drug (NSAID).

On March 31, 2022, ASRT partnered with BlinkRx to support healthcare professionals and patients undergoing treatment with Otrexup with a unique access solution. Dan Peisert, President and CEO of ASRT, said, “This builds upon our existing pharmacy hub capabilities with a new direct-to-patient model for those who prefer a convenient digital option.”

For the fiscal second quarter ended June 30, 2022, ASRT’s total revenue increased 38.5% year-over-year to $35.13 million. Its adjusted EBITDA grew 4,636.8% from the year-ago value to $22.91 million, while its adjusted earnings increased 291.9% year-over-year to $13.42 million. The company’s adjusted EPS increased 275% from the year-ago value to $0.28.

For the quarter ending September 30, 2022, ASRT’s revenue is expected to increase 25.7% year-over-year to $32.01 million. Street expects its EPS to increase marginally year-over-year to $0.08 for the current quarter. ASRT has gained 276.2% over the past year to close the last trading session at $3.57.

ASRT’s POWR Ratings reflect these solid prospects. The stock has an overall rating of B, equating to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

It has an A grade for Value and a B for Growth, Sentiment, and Quality. Within the Medical – Pharmaceuticals industry, it is ranked #21 out of 170 stocks. To see the other ratings of ASRT for Momentum and Stability, click here.

Rackspace Technology, Inc. (RXT)

RXT is a multi-cloud technology services company. The company’s multi-cloud services segment offers public and private cloud services and professional services to design and build cloud-native applications and multi-cloud solutions. Its Apps & Cross Platform segment includes managed applications, managed security services, privacy and protection services, and data services.

On July 20, 2022, RXT entered into a GOLD partnership with Datadog, Inc. (DDOG), the monitoring and security platform for cloud applications. This partnership enables the company to leverage DDOG’s platform to diagnose problems in application environments and minimize the impact of business-disrupting events on customers’ operations.

RXT’s revenues increased 3.8% year-over-year to $772.20 million in the second quarter ended June 30, 2022. Its income from operations increased 37.9% year-over-year to $4 million. The company’s total current assets increased 2.5% to $1.01 billion, compared to $989.50 million for the fiscal year ended December 31, 2022.

The consensus revenue estimate of $773.19 million for the fiscal third quarter (ending September 30, 2022) represents a marginal improvement year-over-year. The company has an excellent earnings surprise history; it surpassed the consensus EPS estimates in each of the trailing four quarters.

Over the past month, the stock has declined 9.3% to close the last trading session at $5.46.

RXT’s POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to a Buy in our proprietary rating system.

It has a B grade for Growth and Value. It is ranked #15 of 53 stocks in the Technology – Communication/Networking industry. To see the additional POWR Ratings of RXT for Momentum, Stability, Sentiment, and Quality, click here.

LSI Industries Inc. (LYTS)

LYTS provides non-residential lighting and retail display solutions in the United States, Canada, Mexico, Australia, and Latin America. It operates in two segments: Lighting and Display Solutions.

On April 28, 2022, the company’s Board of Directors authorized a new share repurchase program to repurchase up to $15 million of its outstanding shares of common stock from the open market. This reflects the company’s strong cash flows and ability to boost shareholder returns.

During the fiscal 2022 fourth quarter (ended June 30, 2022), LYTS’s net sales increased 31.4% year-over-year to $127.47 million. Its adjusted operating income grew 74.6% from the year-ago value to $8.11 million, while its adjusted net income increased 81.2% year-over-year to $6 million. The company’s adjusted EPS came in at $0.21, representing a 75% increase year-over-year.

Analysts expect LYTS’s EPS and revenue to increase marginally year-over-year to $0.55 and $458.85 million in fiscal 2023 (ending June 2023). It has surpassed the EPS estimates in three of the trailing four quarters, which is impressive. Over the past month, the stock has gained 28.9% to close the last trading session at $7.45

The company has an overall rating of A, equating to a Strong Buy in our POWR Ratings system. LYTS has an A grade for Growth and a B for Value and Sentiment. The stock is ranked #3 of 90 in the Industrial – Equipment industry. Click here to see the other ratings of LYTS for Momentum, Stability, and Quality.

shares were trading at $423.21 per share on Friday morning, down $4.68 (-1.09%). Year-to-date, has declined -10.23%, versus a % rise in the benchmark S&P 500 index during the same period.

About the Author: Shweta Kumari

Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions. More...

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