3 Ultra-Cheap Tech Stocks to Consider Buying

Three ultra-cheap tech stocks are interesting picks for their favourable business outlooks and long growth runways.

| More on:

Technology isn’t the top-performing sector anymore, like in 2020, but it’s showing resiliency during the TSX’s correction of late. Nearly all of its constituents advanced to start this week. If you want exposure to tech companies and think a rebound is forthcoming, consider buying three stocks trading at ultra-cheap prices.

TELUS International (TSX:TIXT)(NYSE:TIXT), Tecsys (TSX:TCS), and Evertz Technologie (TSX:ET) have better chances of ending their slumps ahead of their sector’s peers. Now is the time to scoop them before the eventual breakouts.

Next-gen digital solutions

TELUS Corp., the controlling shareholder of TELUS International, has high hopes for the company that designs, builds, and delivers next-generation digital solutions. The $7.91 billion TELUS International didn’t disappoint, as evidenced by the impressive growth in revenue and net income in Q1 2022.

In the three months ended March 31, 2022, revenue grew 18.61% to US$599 million versus Q1 2021. Net income shot up 1,033.33% year over year to US$34 million. TIXT president and CEO Jeff Puritt said, “Notably, our first-quarter results were achieved through continued strong organic business growth, notwithstanding the meaningfully larger scale of our company today.”

Puritt said that besides the Tech and Games vertical, TIXT realized exceptional traction with clients in the e-commerce and Fintech verticals. Unfortunately, the strong financial performance to start 2022 doesn’t reflect on the stock’s performance. As of this writing, the tech stock ($29.76 per share) is down 28.8% year to date.  

Vanessa Kanu, TIXT’s CFO, credits the service mix, pricing, and productivity gains for the growing profitability, notwithstanding the current labour market dynamics. As a result, free cash flow and cash provided by operating activities went up 450% and 244% from a year ago.

Dynamic supply chain solutions

Tecsys is a promising high-growth tech stock, because it provides supply chain solutions. The $468.2 million company caters to enterprises in the healthcare and retail sectors. It’s products and services also help companies in service parts, third-party logistics, and general wholesale high-volume distribution industries to thrive.

Other dynamic and powerful solutions include warehouse management, distribution & transportation management, supply management at point of use, retail order management, financial management, and analytics solutions. Currently, Tecsys trades at a deep discount (-38.77%). However, at $32.15 per share, the company pays a modest 0.87% dividend.

Niche play

Evertz Technologies is an interesting pick, because it’s a niche player in the Software Defined Video Network (SDVN). The tech stock isn’t losing year to date (+0.80%), but the current share price of $13.10 is 20.8% lower than its 52-week high of $16.54. Market analysts have a 12-month average price target of $17.08 (+30.38%), but the return potential could be higher because of the generous 5.5% dividend.

In the first three quarters of fiscal 2022 (nine months ended January 31, 2022), revenue and net earnings increased 30.18% and 66.29% versus the same period in fiscal 2021. Evertz looks forward to doing more business with content creators, broadcasters, specialty channels, and television service providers.

Long growth runways

TELUS International, Tecsys, and Evertz Technologies have the potential to deliver far superior returns than the acknowledged tech giants. Their business outlooks are favourable, while the growth runways are long.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

More on Tech Stocks

investment research
Tech Stocks

Is OpenText Stock a Buy, Sell, or Hold for 2025?

Is OpenText stock poised for a 2025 comeback? AI ambitions, a 3.8% yield, and cash flow power make it a…

Read more »

The virtual button with the letters AI in a circle hovering above a keyboard, about to be clicked by a cursor.
Tech Stocks

Emerging Canadian AI Companies With Big Potential

These tech stocks are paving the way to an AI-filled future, but still offer enough growth ahead for a strong…

Read more »

Young Boy with Jet Pack Dreams of Flying
Tech Stocks

Is Constellation Software Stock a Buy, Sell, or Hold for 2025?

CSU stock has long been a strong option for high growth, high value stocks. But are there now too many…

Read more »

An investor uses a tablet
Tech Stocks

Canadian Tech Stocks to Buy Now for Future Gains

Not all tech stocks are created equal. In fact, these three are valuable options every investor should consider.

Read more »

dividend growth for passive income
Tech Stocks

2 Rapidly Growing Canadian Tech Stocks With Lots More Potential

Celestica (TSX:CLS) and Constellation Software (TSX:CSU) are Canadian tech darlings worth watching in the new year.

Read more »

BCE stock
Tech Stocks

10% Yield: Is BCE Stock a Good Buy?

The yield is bigger than it's ever been in the company's history. That might not be a good thing.

Read more »

Happy shoppers look at a cellphone.
Tech Stocks

So You Own Shopify Stock: Is it Still a Good Investment?

Shopify (TSX:SHOP) stock has had a run, but there's still room to the upside.

Read more »

A person uses and AI chat bot
Tech Stocks

AI Where No One’s Looking: Seize Growth in These Canadian Stocks Before the Market Catches Up

Beyond flashy headlines about generative AI, these two Canadian AI stocks could deliver strong returns for investors who are willing…

Read more »