Whatever the reason a stock is trading for under $5 a share, these stocks are conversation starters. Some will point out the low valuation of these companies presents opportunity for upside which will be hard to come by when investing in a large-cap. What’s more, you can load up on a much larger number of shares than you could with a stock trading in triple or even double digits.

On the other hand, the naysayers argue these tickers are likely to have bad fundamentals and face too many obstacles and, therefore, are more of a speculative shot at lottery like returns than an investment.

Either way, both are right, and both could be wrong, too. The trick, as with any investment, is to find the most compelling opportunities the market presents.

We went on our own intrepid search for 3 stocks trading at a bargain price, specifically looking for ones which those in the know think are poised to take off over the next 12 months. We used TipRanks’ Stock Screener tool which revealed that in addition to the low valuation, all three currently have a “Strong Buy” consensus rating. Let’s dive in.

Orbcomm Inc. (ORBC)

Orbcomm operates in an industry that is expected to grow substantially in the new decade. Orbcomm provides machine-to-machine (M2M) solutions across the globe, with its Internet of Things (IoT) technology used to track and monitor large assets. The company’s main markets are in transportation, heavy equipment, and government services, amongst others. Orbcomm is the only commercial satellite network 100% dedicated to M2M.

The stock experienced a crushing 2019, losing almost 50% over the year due to disappointing earnings reports and transportation industry headwinds; Economic data suggests that in November, more than 1,000 truck drivers lost their jobs. Further data from October indicates heavy truck order activity is down 51% from 2018 levels.

Canaccord's Michael Walkley expects the soft industrial data to continue until mid-2020 and believes it will affect some of Orbcomm’s hardware sales. Nevertheless, the analyst thinks “the shares have limited downside risk at the current valuation.”

The 5-star analyst expounded, “Despite our cautious view of macro trends for a portion of Orbcomm’s transportation business unit, we believe the shares have priced in soft near-term hardware sales trends. With Orbcomm’s shares trading roughly 4X our 2021 adjusted EBITDA estimate, we view the risk reward on the shares as very positive… We believe if management can execute, the shares should return to higher multiples.”

What does it mean, then? It means that Walkley keeps his Buy rating on Orbcomm. To reflect the headwinds, though, the price target comes down a notch, from $10 to $9. The reduced figure still represents outstanding returns in the shape of 132% could be in store over the next twelve months. (To watch Walkley’s track record, click here)

Overall, the Street is with Walkley. 2 additional Buy ratings given to the M2M solutions provider over the last three months add up to a Strong Buy consensus rating. The average price target comes in at $7.67 and implies potential upside of a hefty 98%. (See Orbcomm stock analysis on TipRanks)

Plug Power (PLUG)

From M2M technology, we move on to another very modern solution, hydrogen fuel cell technology, or renewable energy. Plug Power’s fuel cell systems are designed to replace conventional batteries in electric vehicles and industrial trucks.

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