Cheap stocks are often cheap for a reason, and there are some excellent reasons the three stocks below are priced below $20 per share. In fact, they're all going for under $15, and most trade closer to $10. 

At a time when the S&P 500 continues to set new records, it might seem strange these companies are worth less than $20. Yet, these aren't necessarily busted stocks; in fact, many are performing quite well. So let's look at the compelling reasons these tech stocks might not remain so cheap for very long. 

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Extreme Networks (Recent price: $10.83)

Data center equipment maker Extreme Networks (EXTR 1.00%) is an example of a business that has been very successful while its stock remains very affordable. It just happened to have been even more affordable a year ago when it was trading for less than $4.50; now it's soared over 140% higher, but can go higher still.

Its hardware is used in cloud-scale data centers and Wi-Fi solutions for enterprise campuses. And as more companies move their data to the cloud (especially as remote work becomes more of the norm), Extreme Networks' customers will need the robust network management tools it provides. As a result, they have enabled the hardware maker to become the second-biggest cloud networking company in the space in just two years, with its fiscal-year revenue hitting a record $1 billion.

Despite these gains, Extreme Networks trades at a very reasonable 11 times next year's earnings estimates, and analysts forecast it will grow those earnings at 20% annually for the next five years.

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Himax Technologies (Recent price: $11.77)

Another fast grower that has seen its stock rocket 210% higher over the last 12 months is Himax Technologies (HIMX -1.64%), which is ready for the next phase of expansion.

The Taiwanese semiconductor maker specializes in digital imaging processors that are used in automobiles, mobile communication, and televisions. It benefits in particular from the upgrade cycle that began last year in mobile devices. However, that's been offset in part by the chip shortage that's impacted all industries, but particularly automakers, which have been forced to delay production and shipments.

Himax isn't some upstart, but rather an established player with a three-decade history of working with some of the leading original equipment manufacturers. The company also has a demonstrated ability to adjust and adapt to changing market conditions and evolving technologies.

Dependent on the cyclical consumer electronics industry, Himax should benefit from the nation's dispersed workforce, which will demand that employees remain connected through technology. In addition, the mobile phone supercycle should carry it further. Finally, once the chip shortage sorts itself out in due course, advances in automotive tech will help drive Himax higher still.

It trades at just 9 times trailing earnings and an incredible 3 times next year's estimates. This semiconductor stock is a bargain at less than 2 times sales and only 7 times the free cash flow it produces.

Someone leaping over cliff edges labeled 5G and 6G

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Nokia (Recent price: $5.96)

Look at former cellphone maker Nokia (NOK -2.43%) as a tortoise against the industry's hares. The telecom equipment manufacturer is a slow and steady performer whose shares are up just 21% year over year, but they are also 50% higher in 2021 as 5G networks become a reality and 6G raises its head over the horizon.

Although it benefited from attaining meme-stock status during the trading frenzy of January and February, Nokia has continued putting in the work to prove its business is viable without chat room chatter. The real growth it enjoys is in the network infrastructure space, where telecoms compete to upgrade their 5G service.

Nokia is actually a turnaround stock in the works that is competing against tough rivals, yet it's landing good hits, reporting second-quarter earnings that exceeded expectations. Furthermore, management raised guidance for the rest of the year on sales and margins. Priced at less than 1.5 times sales and only 14 times its free cash flow, Nokia is primed to dial up more growth.