Navigating the stock market was and always will be a complex pursuit. This is especially true when seeking high-growth potential within a budget and in an adverse macro environment.
Here are three affordable stocks under $15 that could skyrocket by 2028, offering significant returns. Identifying the right and affordable stocks to buy is vital for maximizing an investment portfolio’s potency.
These companies have delivered remarkable improvements with solid financial fundamentals, making them prime candidates for substantial market price appreciation.
The first company on the list has enhanced profitability through effective cost management and reduced warranty expenses. The second one’s strategic debt management and robust cash position highlight its financial stability and growth potential.
Meanwhile, the third one has significantly improved its operating income and gross margins, showcasing its operational efficiencies.
Understanding the fundamentals behind these stocks may provide clear insights into their upcoming price performance. By exploring their recent financial achievements and strategic initiatives, one can understand why these stocks are poised for remarkable growth and what makes them worthy considerations for those aiming for massive returns.
Power Solutions International (PSIX)
Power Solutions International (OTCMKTS:PSIX) leads in advanced, emission-certified engines and power systems. The company’s warranty costs for Q1 were $1.5 million, a sharp improvement of $3.5 million against $5.1 million in Q1 2023.
Lower adjustments to pre-existing warranties reduce warranty costs, indicating improved product quality and reliability.
Meanwhile, Power Solutions’ interest expense dropped to $3.3 million in Q1, down from $4.7 million in Q1 2023. This reduction is primarily due to lower average outstanding debt.
This move was executed despite higher overall effective interest rates. Hence, the decrease in interest expense further uplifts the company’s bottom line. As a result, adjusted EBITDA increased to $11.9 million in Q1, which is up from $10.1 million in Q1 2023.
The growth in adjusted EBITDA reflects Power Solutions’ core operational strength. The adjusted net income for Q1 2024 was $7 million, an adjusted EPS of 31 cents. This is 2X of $3.8 million, an adjusted EPS of 16 cents in Q1 2023.
Overall, Power Solutions has demonstrated solid cost management with improved product quality, which makes it a solid mark among affordable stocks.
Inseego (INSG)
Inseego (NASDAQ:INSG) specializes in mobile and fixed wireless solutions. The company’s cash improved significantly, as the unrestricted cash rose to $12.3 million by Q1 2024, up by $4.8 million from the previous quarter.
This solid liquidity is supplemented by a $15 million prepayment from a major Tier 1 carrier customer. These elements allowed Inseego to repay its drawn credit facility.
As a result, the company reduced interest expenses. Further, Inseego terminated its asset-based lending facility in April 2024, following the repayment of $4.7 million drawn on it. This provides greater financial flexibility.
Moreover, the fixed wireless access business constitutes about a third of the company’s top-line, up from 23% in Q1 2023, demonstrating strong carrier demand and significant annual revenue growth.
Additionally, the mobile hotspot business, driven by the uptake of 5G products, performed better than expected despite the transition from 4G products. This rebound in the mobile business is a positive indicator of Inseego’s ability to adapt and capitalize on new market opportunities.
Inseego’s strategic debt management and improving liquidity and cash position make it a promising choice among affordable stocks.
Daktronics (DAKT)
Daktronics (NASDAQ:DAKT) prevails in electronic displays and digital billboards. Daktronics’s fiscal 2024 operating income quadrupled to $87.1 million against fiscal 2023
This significant increase indicates strong underlying profitability driven by improved operational edge and strategic pricing actions. For 2024, the gross margin rose to 27.2% from 20.1% in fiscal 2023, the highest level since 2009.
This 7.1% increase reflects stabilization in input costs and enhanced manufacturing efficiencies.
Moreover, the 2024 operating margin reached 10.6%, a substantial increase from 2.8% in 2023. This demonstrates Daktronics’ strategic focus on high-margin projects and operational improvements.
Further, Daktronics derived over $63 million in cash flow from operations in fiscal 2024. The year-end cash improved massively to $81.7 million from $24.7 million in 2023, highlighting strong cash management and operational edge.
The working capital ratio improved to 2.1:1 at the end of Q4 2024. This is up from 1.6:1 in Q4 2023, reflecting enhanced liquidity and the company’s ability to meet short-term obligations comfortably.
Daktronics’s solid operating income, margin growth margin and working capital improvements solidify its presence among the top affordable stocks.
On the date of publication, Yiannis Zourmpanos did not hold (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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.