A low share price does not always mean a good price. Stocks trading at $ 5 or less are generally not worth much in every sense of the word. But when you can find stocks in this price range that actually offer upside potential, they are worth considering. There are two such stocks, both are trading at about $ 5 per share, and both are ready to see a sharp rise in price (possibly already this year).
LiveXLive: The Leader in Streaming Content
One of the cheap stocks to watch out for is LiveXLive Media (NASDAQ: LIVX). Last year, the company’s shares rose by about 147%, and today (February 2021) – by about 24%. LiveXLive offers a platform for live streaming, digital audio and video on demand, and podcasting. The platform can be accessed via the Internet or from smartphones via the LiveXLive mobile app.
Like many of its competitors, LiveXLive offers free access, with mandatory in-app advertising, and an ad-free subscription. The company earns about 53% of its revenue from subscriptions, 39% from advertising and sponsorship, and 8% from paid broadcasts.
In the second quarter of fiscal 2021 (ending September 30, 2020), LiveXLive’s revenue grew 52% year-on-year to $ 14.6 million (this is the 10th straight quarter of the company’s revenue increase). The revenue growth was driven by a 21% increase in subscriptions (currently over 1 million subscriptions). Plus, LiveXLive’s fast-growing live streaming business has also contributed.
LiveXLive has carved out a great niche connecting artists with fans through events, interviews, album listening parties, podcasts and more. LiveXLive has aired 103 live shows over the past two quarters – featuring Pitbull, Darius Rucker, Billy Joel, Billie Eilish, Bon Jovi and many more. These concerts have received over 95 million views. During the same period last year, the company only aired 22 events, which garnered over 60 million views. The number of live shows of concerts increased significantly during the pandemic as people looked for an alternative to attending live performances. In total, since January 2020, more than 1,500 artists have taken part in the company.
In addition, the LiveXLive pay-per-view service, launched in May 2020, has already generated 8% of total revenue in just six months and is poised for strong future growth as quarantine measures are still in place and people are still unable to attend live concerts.
The company expects revenues of $ 63.5 million to $ 69.5 million in fiscal 2021 with an operating loss of $ 2.5 million to $ 5 million, less than an operating loss of $ 7.1 million in the last quarter. And while the company is currently not profitable, this is set to change fundamentally as it continues to generate revenue, improves its bottom line and positions itself at the forefront of what CEO Rob Ellin (who owns roughly 20% of the outstanding shares) calls “ a paradigm shift towards live streaming ”that will continue beyond COVID.
WisdomTree Investments: Growth Through ETFs
WisdomTree Investments (NASDAQ: WETF) is an asset management company that specializes in exchange-traded funds, or ETFs. The company has about 70 different ETFs (including domestic, international, emerging markets and ESG equity). The company manages $ 68.7 billion in assets, including about $ 40 billion in US ETFs and $ 28 billion in international ETFs.
2020 was a successful year for the company, with a stock return of 14%. Assets under management increased by about 8% over the calendar year, and adjusted net income rose 3.7% year-on-year to $ 11 million. The company has an excellent operating margin of 23%.
WisdomTree is not only an ETF specialist in the classic sense, but also an innovator who uses patented methodologies to create customized, so-called. transparent ETFs. Many of these innovative ETFs have surpassed passive investment funds to rank among the best in their class and should continue WisdomTree’s success as exchange-traded funds continue to gain traction for at least another decade.
While ETFs are WisdomTree’s only focus, the niche is expected to continue to grow. A report from analysts at Bank of America at the end of 2019 predicted that ETF assets would grow to $ 50 trillion by 2030 (currently about $ 5 trillion). So there is room for growth.
To conclude this review, keep in mind that these are small-cap stocks, which generally carry a higher level of risk. However, both LiveXLive and WisdomTree Investments appear to be poised for sustained growth.