If you’re on a budget but still wanting to develop your portfolio, check out these three bargain growth stocks under $20. In the stock market, there is no other charm like bargain-basement picks. Such hidden gems not only promise bargains, but deliver substantial growth and demonstrate resilience in the face of market fluctuations.
Three stocks under $20 a share represent such hidden gems, each with the potential for triple-digit growth. These are not mere sticks of paper, after all; they are portfolios of prosperity, each with its promise of vibrant triple-digit growth.
The first stock shines with solid fundamentals, offering stability and growth through its strong financial health and consistent profitability, appealing to investors seeking growth and market resilience.
The second stock introduces Project Elevate, an ambitious initiative aimed at innovation and market expansion, potentially revolutionizing the industry and attracting investors with its promise of transformative growth.
Then there’s the third candidate, distinguished by its fintech edge. This company leverages cutting-edge technology, tapping into new markets with unprecedented speed and efficiency.
Read more to learn about their strategic expansions and transformative projects. Delve into the fundamentals behind these bargain-growth stocks under $20.
Bargain Growth Stocks Under $20
Trinity Capital (TRIN)
Trinity Capital (NASDAQ:TRIN) attained a return on average equity (ROAE) of 17.6% and a return on average assets (ROAA) of 8% based on net investment income (NII). These solid returns on equity and assets levels suggest the company’s fundamental capability to derive competitive returns on equity and assets deployed in its portfolio.
Additionally, Trinity Capital pursues strategic moves to enrich its market lead and capitalize on growth opportunities. Trinity Capital expanded its grip in the life science vertical through key hires and the opening of a new office in San Diego. This strategic move may lead to capturing high-growth industry demand and diversifying its portfolio.
Furthermore, the company leverages off-balance sheet growth potential through initiatives such as the direct lending joint venture and the Registered Investment Advisor (RIA). These off-balance sheet growth strategies provide incremental returns and enrich the company’s consolidated bottom line.
Moreover, Trinity Capital executes sharp capital allocation strategies, optimizing its capital structure and financial standing. Trinity maintains solid liquidity, with approximately $257 million in total liquidity as of Sept. 30, 2023. Hence, the company’s robust liquidity management ensures it has sufficient resources to support new investments and match its obligations.
In this direction, the net leverage ratio improved to 0.92 times in Q3, suggesting productive leverage management and a solidified balance sheet. Trinity’s disciplined approach to leverage management minimizes risk and enriches stability, supporting sustainable valuation expansion.
Finally, Trinity successfully raised $82 million in equity in August, boosting its fundamental capability to access capital markets to fund growth. The company also utilizes its At-the-Market (ATM) program to raise additional capital, further supporting its long-term growth objectives.
Harte Hanks (HHS)
Harte Hanks (NASDAQ:HHS) is improving its cost structure and operational edge through Project Elevate. This is a transformative plan aimed at balancing growth investments with cost-containment measures.
In detail, Project Elevate targets a lower cost structure and higher profitability by implementing cost and process improvements. The engagement with Kearney, a leading global management consulting firm, indicates a serious focus on this initiative. Kearney’s expertise can help identify inefficiencies, streamline operations, and derive bottom-line improvements.
Additionally, better leveraging existing technology infrastructure and identifying new solutions are part of Project Elevate. This indicates a focus on leveraging technology to enrich operational efficiency and derive advancement.
Furthermore, Harte Hanks boasts a solid financial position. As of Q3 2023, the company held $13.3 million in cash, increasing from $10.4 million in Q4 2022. The solid and growing cash reserve may continue to support various growth initiatives, such as investments in sales and marketing.
Further, the absence of debt provides flexibility and reduces interest rates and credit risk for Harte Hanks. It means the company doesn’t have to allocate considerable resources to debt servicing, allowing it to concentrate on expansion.
Despite revenue adversities in certain segments, the company managed to maintain positive operating income and EBITDA. For instance, in Q3 2023, the operating income was $2.9 million, and EBITDA was $3.9 million, demonstrating efficient cost management and operational effectiveness.
Finally, the availability of a $25 million credit facility further enriches financial flexibility. This provides additional capital for expansion, acquisitions, or other strategic initiatives.
FinVolution (FINV)
FinVolution (NYSE:FINV) has invested considerably in research and development, deploying around RMB 2.4 billion since 2018 to develop cutting-edge technologies. BLU, the AI-powered chatbot, supports operations in six different countries and five languages, leading to operational efficiency and cost savings of up to 80% in loan collection processes.
Leveraging AI-driven advertising and technology, FinVolution has attained considerable social media engagement, with milestones such as surpassing 1 million followers on Facebook and considerable growth on TikTok. The company’s focus on technology and related advancements improves operational efficiency and enriches the client experience, supporting client acquisition and retention efforts.
Furthermore, FinVolution’s international expansion efforts have yielded considerable results, with rapid growth in transaction volume, loan balances, and revenue contribution from overseas markets. The company strategically focuses on acquiring better-quality borrowers in international markets, leveraging its experience in China.
In detail, expansion efforts include increasing the population of institutional funding, strengthening local presence and networks, and exploring new licenses to support local operations. With promising macroeconomic trends in key international markets like Indonesia, FinVolution may rapidly capitalize on growing consumer spending and demand for financial services.
Financially, net revenues for Q3 2023 grew to RMB3.2 billion, up 8% year-over-year. Despite increased sales and marketing expenses, net income remained solid at RMB 575 million. FinVolution maintains a leverage ratio of 4.1x, indicating manageable risk levels and potential for future growth. Therefore, the company’s cash position is robust, with over RMB 8.5 billion of cash and short-term liquidity, providing flexibility for business expansion and returns.
— Yiannis Zourmpanos
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Source: Investor Place