BOSTON ( TheStreet) -- Growth stocks typically command a premium. Here are three that offer the rare combination of cheap shares and strong potential.
3. Ebix ( EBIX) designs software for the insurance industry. Based in Atlanta, Ga., Ebix derives 80% of its revenue from recurring customers and boasts a 99% retention rate. Its growth rates, seen above, trump those of peers. Quarter: Fourth-quarter net income jumped 53% to $12 million and earnings per share rose 39% to 31 cents, hurt by a higher share count. Revenue grew 55%. Ebix's net margin hit 39%. The company has $21 million of cash and $52 million of debt. Stock: Ebix has more than doubled during the past year, outpacing major U.S. indices. The stock trades at a price-to-projected-earnings ratio of 13 and a price-to-book ratio of 3.4, reflecting 43% and 31% discounts to peers. Consensus: Of analysts following Ebix, two advise purchasing its shares and one recommends holding them. Northland Securities offers the loftiest price target, expecting the stock to advance 27% to $21.50. Singular Research is also bullish.