5 Top Stocks at Half Price

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 stocks whose shares are selling at least 50% below their 52-week highs, but which still earn top honors from our investor-intelligence database. Consider it a BOGO sale on stocks.

Stock

CAPS Rating

% Off 52-Week High

Atlas Energy Resources (NYSE: ATN  )

*****

80%

Harvest Natural Resources (NYSE: HNR  )

*****

74%

MEMC Electronic Materials (NYSE: WFR  )

*****

82%

Nucor (NYSE: NUE  )

*****

55%

ViroPharma (Nasdaq: VPHM  )

*****

70%

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 risks inherent in a stock that has all of its resources tied to one product are obvious. If the product fails or a competitor develops a better one, the company could be in trouble. There are many examples of such one-trick ponies, but biotech ViroPharma has been hard at work formulating plans to ensure that it doesn't become one.

Unfortunately, when its phase 3 drug maribavir didn't prove to reduce cytomegalovirus (CMV) disease in stem-cell-transplant patients, the stock got more than a haircut -- shares fell 50% in one day. ViroPharma had hoped that maribavir would replace its successful Vancocin, which treats bowel infections, as one of its primary sources of revenue. The biotech still has another option in Cinryze, a treatment for hereditary angioedema (HAE), a rare swelling disorder. The company acquired Cinryze when it bought Lev Pharmaceuticals.

ViroPharma's guidance for 2009, released a few weeks ago, suggested revenues could reach $250 million to $270 million, but only if there are no generic versions of Vancocin released this year. It may also have to compete against the likes of Pfizer's (NYSE: PFE  ) dalbavancin, a second-generation antibiotic. While guidance excluded any contribution from Cinryze, the problem is that the therapy won't generate anywhere near the same revenues as Vancocin did -- perhaps not for a decade. It's also possible that  Dyax (Nasdaq: DYAX  ) might get its own HAE therapy onto the market, limiting the potential contribution further, but some smart Fools see that as somewhat doubtful.

CAPS member adavisclan looks past the latest results and is hopeful.

2008 4th qtr missed estimates which was disappointing, however forward looking still is favorable. In the 4th qtr, they took a one time write down of $2.3 million for closing their corporate headquarters. While many firms unwisely cut R&D expenses when in troubled times, ViroPharma actually increased 4th qtr R&D expenses by 76% which should help fill pipelines to replace Vancocin if and when it goes generic at some point. 2009 guidance did not put revenues in for Cinryze due to uncertainty. This is an upside with high probablity. They continue to generate strong free cash flows.

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.

Sign up today for the completely free service and tell us whether these stocks are twice as good at half the price.

Atlas Energy Resources is a Motley Fool Income Investor selections. Pfizer is an Inside Value recommendation. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings. The Motley Fool has a disclosure policy.


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