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 cry about 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 who populate 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.
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Stock
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CAPS Rating (out of 5)
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% Off 52-Week High
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Cemex (NYSE: CX )
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*****
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72%
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Mindray Medical (NYSE: MR )
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*****
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58%
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Precision Castparts (NYSE: PCP )
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*****
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59%
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Schlumberger (NYSE: SLB )
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*****
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62%
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XTO Energy (NYSE: XTO )
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*****
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53%
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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
It's not easy to build much these days without the use of cement, so it would seem that Mexican cement maker Cemex would be positioned to do well as a result. Yet there's not much of anything being built these days, and with lower fuel costs making cheaper imported cement a more attractive option, Cemex may face increased profit pressures.
While a huge public-works program from the Obama administration could benefit companies like construction and engineering firms Fluor (NYSE: FLR ) and Jacobs Engineering (NYSE: JEC ) , some wonder whether it will come soon enough to be of benefit to Cemex. CAPS member Aggiemedic01 thinks the cement company will only gain advantage later on, and that next year remains a challenge for it:
High debt levels, much of which come due this year, coupled with a global slow down and extremely difficult financing environment will destroy this company. If the Obama administration is able to push an infrastructure-based stimulus package, the cement/concrete industry will benefit only after the engineering/design work is completed.
Heavy construction isn't the only industry placing bets on the new administration. Investors in XTO Energy are hoping that Obama's acceptance-speech pledge to tap the country's natural gas reserves will serve as a boon to the industry. CAPS All-Star anasr thinks the stock will initially walk in lockstep with oil, but that both will ultimately experience a strong upward surge:
XTO Energy will benefit from the current strong preference for natural gas as a partial substitute to oil. Natural gas is cleaner and cheaper than oil and the US is said to be 'floating' on that fuel. Besides, US President-elect has made it clear that he has a preference for natural gas. XTO is therefore one of a category of stocks that will benefit from the inevitable global veering toward natural gas. I expect XTO will move in lockstep with oil prices when these resume their ascending trend.
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.
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