For courageous investors willing to take the chance, looking for oversold stocks during a bull market can be a golden opportunity to buy a stock before it bounces back. While a contrarian approach is a high-risk strategy, you can win big if you get the timing right.
The question now is which stock to choose. Companies performing poorly with trading prices but showing earnings growth might be attractive picks €” and I have three for your consideration.
OppFi (OPFI)
AI may be the darling of the tech sector, but fintech will always have its place in an evolving economy. For example, companies like OppFi (NYSE:OPFI) help Americans gain access to credit through its specialty products. The company uses an AI-powered proprietary algorithm that helps its customers opt into its programs, like the OppFi TurnUp Program, which helps them find affordable credit options in the market.
OppFi offers a payroll deduction scheme for its customers under its SalaryTap as part of its secured installment loan offering.
OppFi ended FY’23 strong, with nine consecutive positive net income years.
For 2023, the company reported a respectable 12.4% revenue growth, a massive 1082% net income growth, and another excellent 763.0% adjusted EPS growth.
Its CEO, Todd Schwartz, emphasized OppFi’s commitment to maintaining a strong balance sheet and profitability and scaling its expenses efficiently for FY’24. While it may be underperforming in the market, it’s consistent profitability and strong management make OPFI stock worth adding to your tech stocks to buy list.
Lantronix (LTRX)
The Internet of Things (IoT) is a high-potential technology that could shape the future. Companies like Lantronix (NASDAQ:LTRX) are some of the players in the market that want to take advantage of this potential. The tech could be a game changer for various industries, enterprises, and smart cities.
Lantronix offers remote environment management Software as a Service (SaaS) and turnkey solutions for the IoT. The company recently announced the release of Percepxion, an easy-to-deploy pre-configured IoT solution that allows customers to connect to its existing connect and compute products. It also expanded the M110 Mobility Solutions family, which is pre-configured with Percepxion IoT Software.
LTRX stock is down about 44% YTD, offering investors a chance to pick it up at a nice discount and ranking it as one of the potential tech stocks to buy. Meanwhile, the company’s financial report shows a different trend.
Lantronix reported a record revenue of $37 million for Q2 ’24, representing an 18% YOY increase, doubling its non-GAAP EPS from $0.04 the prior year to $0.08.
In addition, the company anticipates continued growth with full-year revenue ranging from $155-$165 million and non-GAAP EPS in the range of $0.35-$0.45 per share.
With a growing portfolio of products and impressive financial results, its current price performance weakness may be the best time for investors to take advantage of Lantronix’s growth potential.
Calix (CALX)
Calix (NYSE:CALX) offers its subscribers various managed services that enable broadband service providers to innovate and transform their businesses. Its platform includes Calix Cloud, Revenue EDGE and Intelligent Access EDGE, which helps gather data that uses machine learning to provide real-time insights to its customers.
The company previously announced that it remains the sole company with the TR-369 and TR-398 Broadband Forum certifications. Having sole certification on these broadband protocols highlights the strength of Calix’s business.
The company ended FY’23 with excellent numbers, benefitting from its strong cloud and managed services portfolio. Revenue grew 19.8% YOY and Calix expects Q1 ’24 EPS to end between $0.17 and $0.23 with revenues around $225-$231 million. Despite its short-term challenges and underperformance, its growth expectations and upcoming surge in broadband investment can be worthy catalysts for picking it up when it finds a bottom.
On the date of publication, Rick Orford did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Rick Orford is a Wall Street Journal best-selling author, investor, influencer, and mentor. His work has appeared in the most authoritative publications, including Good Morning America, Washington Post, Yahoo Finance, MSN, Business Insider, NBC, FOX, CBS, and ABC News.