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 still earn top honors from our investor-intelligence database. Consider it a BOGO sale on stocks.

Stock

CAPS Rating

% Off 52-Week High

Harvest Energy Trust (NYSE: HTE  )

*****

84%

Cameco (NYSE: CCJ  )

*****

60%

Oshkosh (NYSE: OSK  )

*****

80%

Sierra Wireless (Nasdaq: SWIR  )

*****

80%

TBS International (Nasdaq: TBSI  )

*****

87%

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
Even though USEC (NYSE: USU  ) says it has lined up 10 customers for half the output of its proposed new uranium enrichment centrifuge, the Department of Energy is dragging its feet in doling out money from a loan program that was to help defray the cost of building it. USEC had hoped to get $2 billion from DOE, but the agency declined to select any projects to get funding. Now USEC is threatening to halt output to save cash.

In contrast, Australia is preparing to capitalize on the potential of nuclear energy. Domestic production of uranium oxide is expected to grow 5% this year to more than 10,500 tons, according to the Australian government, while 64 nuclear reactors will be commissioned over the next six years. The government anticipates demand for nuclear power doubling by 2030. That's long-range planning, to be sure, but it says it has 38% of the world's uranium resources and 1% of its supply, giving it a host of opportunities for growth.

That bodes well for Canadian uranium miner Cameco, which is planning to speed up the exploration projects in western Australia that it bought from Rio Tinto (NYSE: RTP  ) last year. Investors might want to take note of the level of confidence in the producer, even after a "kitchen sink" year. Despite reporting fourth-quarter earnings in February that fell by nearly half, it was losses on financial instruments that dragged Cameco down, rather than its mining operations.

Excluding those financial interests, Cameco would have earned $146 million, or $0.40 per share, for the quarter as revenue rose 86% to $751 million. Operating profits in its uranium business nearly tripled to $137 million, while segment revenue doubled to $368 million. Sales volumes nearly doubled as well.

CAPS All-Star nrlbuild says the constant uranium prices in Cameco's long-term contracts is partly why investors will benefit from increasing demand.

In the long run nuclear power will become more prolific as the world seeks for alternatives to fossil fuels. The stability of uranium prices via the long contract period is a known quantity which can be planned around. They are the worlds largest uranium miner. In the short run this company also owns a stake in gold mining company Centerra Gold, which is known to be a popular defensive position for people in an economy such as we are experiencing currently.

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.

The Fool owns shares of Cameco. Try any of our Foolish newsletters today, free for 30 days.

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


Read/Post Comments (1) | Recommend This Article (16)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 06, 2009, at 2:47 PM, kurtdabear wrote:

    CCJ has more problems than last year's big drop in uranium prices, and rising uranium prices won't solve most of those problems.

    Their top management is of questionable quality, and the way they restructured and spun off their gold assets gives them heavy exposure to Russia, which, in my books, is not too far removed from having heavy exposure in Venezuela or Iran.

    Finally, they have a history of major problems in attempting to deliver on their production promises. About the only thing they have going for them is that they're No. 1, and there are no solvent competitors in view. But then ALCOA used to be a No. 1 in their metal, and just look at them now.

Add your comment.

DocumentId: 869259, ~/Articles/ArticleHandler.aspx, 7/24/2014 1:42:40 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement