5 Top Stocks at Half-Price
By Rich Duprey
March 1, 2010 |
Comments (3)
You love buying your shirts when they go on sale. And who can resist a buy-one-get-one-free offer? So when our stocks go on sale, why do we bemoan their low prices?
Smart investors like Warren Buffett or Marty Whitman love it when their stocks are suddenly selling at bargain-basement prices. For them, these companies become
no-brainer buys.
The investors in the
Motley Fool CAPS community also like a bargain, apparently. Below, you'll find five companies whose shares are selling at least 50% below their 52-week highs, but which still earn high honors from our investor-intelligence database. Consider it a BOGO sale on stocks.
Stock ***** % Off 52-Week High
Allied Irish Banks (NYSE:
AIB) **** 72.8%
KongZhong (Nasdaq:
KONG) **** 50.7%
Novatel Wireless (Nasdaq:
NVTL) **** 51.2%
RAIT Financial Trust (NYSE:
RAS) **** 50.7%
Star Bulk Carriers (Nasdaq:
SBLK) ***** 50.4%
Naturally, we want you to look a bit closer at these stocks before buying. You can get low-priced appliances in the
dent-and-ding section of your home-remodeling superstore, but their quality might not be so good. Same thing here: Make sure there's nothing seriously wrong with the company before you plug it into your portfolio.
Take two, they're small
The financial distress and
uncertainty surrounding European capitals continues unabated. In recent weeks, we've seen banks domiciled in the
most worrisome nations -- which have earned the appropriate acronym PIIGS (Portugal, Ireland, Italy, Greece, and Spain) --
appear in this column.
Both
National Bank of Greece and
Bank of Ireland (NYSE:
IRE) find themselves under pressure with their stocks depressed, so it's not surprising that
Allied Irish Banks would be represented as well. Yet it's possible we may finally see a turn in their fortunes as the European Commission has approved Ireland's plan to resurrect its financial institutions.
AIB, Bank of Ireland, and three other financial firms will off-load their nonperforming real estate loans to the National Asset Management Agency, a "bad bank" created to clear up banks' balance sheets. CAPS member leaveamark likens the government's efforts to the situation here in the U.S. after Lehmann Brothers collapsed:
It's like buying US banks after the lehman debacle. The govt nationalized The Anglo Bank and now they are showing their support to help save the Top two banks [Bank of Ireland] and [Allied Irish]. If these become state owned then the country will never attract any foreign investment, so it is crucial for the govt and the people of Ireland to ensure that these institutions bounce back. In at $3.28 and in for the long haul!
Through it all, however, CAPS members have remained confident in Allied Irish Banks' ability to come out on the other side of this situation. Nearly 2,500 members have rated the bank, with 96% seeing it ultimately outperforming the broad market averages. Deposit your thoughts on the
Allied Irish Banks CAPS page or in the comments section below.
Another brick in the wall
With
Novatel Wireless already expecting weak demand for its MiFi product because consumers
weren't buying as many devices as initially expected, the decision by rival
Sierra Wireless (Nasdaq:
SWIR) to move into its space appears to be wreaking havoc on average selling prices. Novatel said profits would be lower than anticipated as ASPs and weak seasonality hurt results. Fourth-quarter earnings were less than expected and its enthusiasm for first-quarter results was dampened, too.
Still, 92% of CAPS members rating the wireless specialist believe it will be able to outperform the market in the future, and they recently raised their rating of the stock. You can tell us on the
Novatel Wireless CAPS page whether there's a disconnect between expectations and performance.
Have half a mind
It pays to start your own research on these stocks on
Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from a stock's CAPS page.
5 Top Stocks at Half-Price (AIB, NVTL)