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, apparently. 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

Agria (NYSE: GRO  )

*****

61%

Seahawk Drilling (Nasdaq: HAWK  )

****

70%

Cambium Learning Group (Nasdaq: ABCD  )

*****

77%

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
By focusing solely on its seed business, Chinese agricultural company Agria should be able to put its expertise to best use. Yet by shedding as it did earlier this summer its sheep and seedling divisions, it is now in a space where Origin Agritech (Nasdaq: SEED  ) and even Monsanto (NYSE: MON  ) are dominant players. However Agria's dedication to develop corn seed solely for human consumption (as opposed to growing it also for feedstock) puts it in the country's sweet spot.

Analysts suggest there will be a corn shortfall of as large as 7 million tonnes this year due to a production deficit. While that bodes well for American corn growers in the meantime, it suggests Agria could see greater demand for its corn seeds come the new growing season.

With 97% of the CAPS members rating the Chinese seed stock to outperform the market, they obviously expect it to quell the seeds of doubt about its ability to compete. Tell us on the Agria CAPS page whether you agree that it will be able to grow its seed business further.

A reserve player
The lifting of the drilling moratorium is certainly better for Seahawk Drilling and Hercules Offshore (Nasdaq: HERO  ) than if it had been left in place, but that doesn't mean they still won't feel the repercussions of the Obama administration's decision to impose it in the first place -- particularly, if as Swift Energy says, there's a de facto moratorium remains in place because of the morass of regulations surrounding getting a permit.

Seahawk operates the second largest fleet of jackup rigs in the Gulf of Mexico, so its fortunes rise and fall on the swells of politics that sail in the region. Yet there are reasons to be encouraged that it won't find itself sinking any longer. A number of offshore drilling contractors have sounded upbeat siren songs about the prospects for new activity in the region, including Noble (NYSE: NE  ) , which hopes to be plying the waters as early as the end of the year.

CAPS member Retracement agrees, saying the company's fortunes are due to change as the market has been pricing Seahawk as if it was never going to rent out its jackup rigs again:

If someone offers me a deal to buy something for less than 25 cents on the dollar value wise on a company which has the second-largest fleet of jack-up rigs in the Gulf of Mexico and DD shows a big catalyst behind current depressed earnings and resulting valuation being a very rare event like the Macondo spill, it warrants a further look. 

[Seahawk] will face a bumpy road ahead in its efforts to diversify the business and to try to insulate the company from regulatory uncertainties in the US Gulf, but I feel that my 'margin of safety' on this stock is about as good as it gets buying at current market prices.

Getting left back
While Cambium Learning more than doubled sales last quarter, it was due primarily to the acquisition it made of Voyager Learning. Yet the costs associated with those sales also skyrocketed and actually outpaced sales, nearly tripling in size. That's a red flag when costs outstrip sales, but worse for Cambium is that its receivables soared as well, as allowances for doubtful accounts and returns jumped ahead of sales, too.

Cambium has been hoping to gain a portion of the Obama stimulus spending allocated to school districts to help it grow, but with states facing budget crunches, that money is being spent elsewhere.

With order volume declining, Cambium says that's an indication of its future business prospects. So while 97% of CAPS members that rated Cambium believed it would outperform the market, I'm going to be heading over to the Cambium CAPS page and mark it to underperform. But you can get all the Foolish news and analysis about this educational company aggregated for you in one place by adding it to your My Watchlist page.

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.

Monsanto is a former Motley Fool Inside Value selection. Motley Fool Options has recommended a synthetic long position on Monsanto. The Fool owns shares of Noble. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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


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