A company’s stock price is a function of its market cap. But the share price determines if the stock is accessible to retail investors who have a small amount of capital. Before its stock split, Amazon was trading at more than $3,000, which is quite high for the average investor.
A few brokers allow investors to buy fraction shares, where you could purchase 0.1 shares of Amazon for $300 in 2021. But the functionality of fractional shares is not widely available as yet, resulting in multiple stock splits this year. For instance, top tech stocks such as Apple, Alphabet, and Shopify have reduced share prices via stock splits in 2022.
Here we look at three cheap stocks you can buy for less than $30 per share. Each of these stocks is trading at a discount compared to historical valuations and offers massive upside potential to investors on the rebound.
A cybersecurity stock
The first company on my list is Magnet Forensics (TSX: MAGT), a cybersecurity stock that provides enterprises with tools to investigate online attacks and cybercrimes. It develops digital investigation software that analyzes and manages evidence from digital services such as mobile devices, laptops, cloud services, and IoT (Internet of Things) devices.
MAGT stock is priced at $22, which is 66% below all-time highs. Valued at a market cap of $927 million, the company is forecast to increase sales from $91 million in 2021 to $166 million in 2023.
Magnet Forensics is part of a rapidly expanding market. Research reports forecast the global cybersecurity market to touch US$270 billion in 2026, up from US$173 billion in 2020. The global shift towards digital has resulted in rising cybercrimes, which is a challenge for governments, companies, and law enforcement agencies. In fact, damages attributable to cybercrimes may surpass US$10 trillion by 2026, up from US$1 trillion in 2020.
MAGT stock is trading at a discount of 75% to analyst price target estimates.
A gold miner
The second TSX stock is a gold miner known as Eldorado Gold (TSX: ELD). With a diversified portfolio of long-life high-quality assets, Eldorado Gold has mining and development operations in Canada, Turkey, Greece, and Romania, with gold reserves totaling 15.3 million ounces.
Gold has been viewed as a hedge against inflation and a store of value, making miners of the yellow metal viable bets during periods of volatility.
In the second quarter (Q2), Eldorado Gold produced 113,462 ounces of gold, increasing 22% on a sequential basis. Gold sales totaled 107,631 ounces at an average realized gold price per ounce sold of US$1,849. Its production costs stood at US$109 million for Q2, with an all-in sustaining cost of US$1,270 per ounce.
ELD stock is priced at $8.62 and trades at a discount of 65% compared to consensus price target estimates.
A high-growth tech stock
The final stock on my list is Dye & Durham (TSX: DND), a company that provides legal software and data technology solutions to enterprises. These solutions should improve operational efficiencies for legal and business-facing companies.
Dye & Durham has a customer base of over 50,000 in Canada, Australia, and the United Kingdom. Further, in the last two years, it has acquired 11 companies allowing Dye & Durham to increase sales from $43.84 million in fiscal 2019 (ended in June) to $474.8 million in fiscal 2022. Analysts tracking DND stock expect sales to surpass $615 million in fiscal 2024.
DND stock is priced at $15.5 and trades at a discount of 100% compared to Bay Street estimates.
