Just because a stock is available at a low price does not mean it is a good value. A stock that trades around $ 5 or less that does not exhibit growth traits or represents a value opportunity is not worth much. But when you can find stocks in this price range that do not offer growth potential, they are worth considering. Here are two such stocks, both trading around $ 5 per share. Stock or less that is ready to rise this year and beyond.
LiveXLive: A streaming content manager
A cheap stock to keep an eye on is LiveXLive Media (NASDAQ: LIVX). The stock has risen about 147% in the past year and is up about 24% year to date. LiveXLive offers a platform for livestream and on-demand digital audio and video as well as podcasts. The platform can be accessed on the Internet or via smartphones via the LiveXLive mobile app and also allows users to create their own custom music stations.
Like some of its competitors, LiveXLive offers free ad-supported access levels as well as a subscription-free subscription service. The company gets about 53% of its revenue from subscriptions, 39% from advertising and sponsorship and 8% from pay-per-view concerts.
In the quarter ended September 30 (second quarter of fiscal year 2021), LiveXLive saw a 52% year-over-year increase in revenue to $ 14.6 million – the company’s 10th consecutive quarter of record revenue. The contribution margin, which is revenue after covering fixed expenses, also jumped from 11.8% to 29.3%. The revenue gain was driven by a 21% increase in subscriptions, which now amount to over 1 million. Subscriptions and ad revenue were both plunged by LiveXLive’s booming live streaming business.
LiveXLive has carved a wonderful niche that connects artists with fans through events, interviews, album listening parties, podcasts and more. In the last two quarters, LiveXLive live-streamed 103 concerts and other events – featuring Pitbull, Darius Rucker, K-Pop band Monsta X, Billy Joel, Billie Eilish and Bon Jovi and more – which garnered more than 95 million views. In the same period last year, the company streamed only 22 events, which generated over 60 million views. Live streaming of concerts is rapidly accelerating during the pandemic as people have been looking for an alternative to attend live shows. Since January 2020, the company has livestreamed over 1,500 artists in various forms.
Launched in May 2020, the LiveXLive pay-per-view service had already generated 8% of total revenue in just six months and is poised for strong future growth as live, personalized concerts remain dormant.
The company expects revenue of $ 63.5 million to $ 69.5 million for fiscal year 2021 with an annual contribution margin of 30% to 35% and an operating loss of $ 2.5 million to $ 5 million. That would have dropped from an operating loss of $ 7.1 million last quarter. Although the company is not currently profitable, it should come as it continues to generate revenue, improve margins and liquidity and position itself at the forefront of what CEO Rob Ellin (who owns approximately 20% of outstanding shares) calls a “paradigm switch to live streaming and one that continues well after COVID. ”
WisdomTree Investments: Growth through ETFs
WisdomTree Investments (NASDAQ: WETF) is an asset management company specializing in exchange traded funds or ETFs. The company has close to 70 different ETFs in every conceivable investment style and strategy, including domestic, international, emerging markets and ESG stocks as well as fixed income, alternative, asset allocation and theme. It has $ 68.7 billion in assets under management, including about $ 40 billion in U.S. ETFs and $ 28 billion in international ETFs.
The company had a good year in 2020, with the stock returning 14%. Assets under management increased by approx. 8% in the calendar year, and adjusted net income increased 3.7% year-over-year to $ 11 million. The company has an excellent operating margin of 23%.
WisdomTree is not only an ETF specialist, but an innovator who uses proprietary methods to create customized, transparent ETFs based on earnings and dividends, among other factors that seek to deliver “modern alpha” – the company’s term for alternative weighting and active management strategies that seek to beat passive ETFs. Many of these innovative ETFs have fared better than being among the best in their class and should be in a good position to continue the success of WisdomTrees as the ETFs gain popularity in the next decade.
While ETFs are WisdomTree’s only focus, it is a niche that is expected to continue to grow. A late report from 2019 by analysts on Bank of america ETF assets are expected to grow to $ 50 trillion by 2030. Assets are currently at approx. $ 5 trillion.
Keep in mind that these are both small equity portfolios that generally have higher risk levels. However, both LiveXLive and WisdomTree investments both appear to be ready for sustained growth.