3 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. Below, you'll find three 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

CAPS Rating
(out of 5)

% Off 12-Month High

BigBand Networks (Nasdaq: BBND  )

****

52%

General Steel (NYSE: GSI  )

*****

51%

Grupo TMM (NYSE: TMM  )

****

50%

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.

Coming soon, to a living room near you
The movie Avatar transformed how the public views 3-D technology and movies. Although its release to DVD will only be in the more mundane 2-D format (3-D won't be out till next year), moviemakers, TV manufacturers, and the infrastructure companies that support them are viewing 3-D as the next epic change to come to home theater viewing.

That could be a catalyst for growth for BigBand Networks, a leader in switched digital video deployment. SDV allows cable operators to free up bandwidth by sending to viewers just the signals of programs being watched rather than the entire lineup of channels. The freed-up space is then used to deliver HDTV programming, and it may prove attractive for operators wanting to deliver 3-D programming.

Time Warner Cable (NYSE: TWC  ) accounts for more than 30% of BigBand's revenue, primarily as a result of the cable operator's deploying large SDV projects. Verizon (NYSE: VZ  ) has been a big user of BigBand's services, too, accounting for more than 10% of revenue.

CAPS member ebitdat lauds recent changes in BigBand's executive suite:

overhauling the management team was necessary and long overdue. now company should benefit from strong growth prospects in a thriving industry and there is no longer as much of an excuse to be so undervalued from sales and book perspective.

Full steam ahead
According to mining giant Rio Tinto (NYSE: RTP  ) , China's gluttonous demand for steel will continue unabated, doubling in size by 2020, even if the government slams the brakes on housing and stops injecting stimulus spending into the economy.

There is an inexorable drive to modernize and urbanize the country. Xi'an, capital of the Shaanxi province in western China, where General Steel's fully integrated steel production joint venture is located, has been targeted as a focal point for development.

Some 139 capital projects are set to begin this year, including nine new railroads, a new airport, expansion of Xi'an's existing airport, two new subway systems, and four new dams.

According to General Steel, fewer than 10% of China's steel companies are fully integrated, and it has the only production facility within 150 miles of Xi'an. It already controls almost three-quarters of the market for rebar in the area, and because steel's not readily transportable, General Steel should continue to garner the lion's share of steel demand in the region.

CAPS member SIO394 thinks cost controls General Steel has implemented will benefit it down the road:

This will allow the Company to reduce overhead costs while providing a recurring monthly revenue stream from rental payments. When demand picks up again, the company will have positioned itself for a nice upside pop. I like this company, and believe it is currently undervalued. It's currenly only trading at a $1.00 of it's low, and $3.55 off it's 52-week high. Seems like more upside than down.

Keep on truckin'
It's not so surprising that Grupo TMM has fallen on hard times. As one of the largest intermodal transportation companies in Mexico, its shipping operations have been affected by the global recession, just as Excel Maritime has, while its trucking operations have been hurt by high fuel costs, one of the factors that nearly pushed YRC Worldwide into bankruptcy.

Grupo TMM underwent a major financial restructuring last December, resulting in its president stepping down in February. CAPS member gardner5555 thinks all of these maneuvers have put the logistics and transportation company on firmer financial footing:

Finally this company has stabilized the cash flow and reformed the balance sheet. Even with poor economic environment the company was cash flow positive in 4th Q 09. I expect them to either pay off debt or add to capacity in the next 3 years, which should improve the stock price. Expect over $10 by 2015

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

General Steel Holdings is a Motley Fool Global Gains pick. Try any of our Foolish newsletter services 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.


Read/Post Comments (0) | Recommend This Article (10)

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.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1171806, ~/Articles/ArticleHandler.aspx, 10/1/2014 8:45:02 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