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.
% Off 12-Month High
|Allos Therapeutics (Nasdaq: ALTH )||****||63%|
|Central European Distribution (Nasdaq: CEDC )||****||72%|
|China Information Technology (Nasdaq: CNIT )||****||63%|
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
Allos Therapeutics seems to have had a really brief honeymoon with the Mr. Market after bringing to market the only approved treatment for patients suffering from relapsed or refractory peripheral T-cell lymphoma. Biotechs in similar situations usually enjoy an extended romance of rising valuations, but for Allos it's essentially been a downhill ride from the start.
Investors seem particularly concerned about potential competition. Celgene (Nasdaq: CELG ) has a drug under review by the FDA to also treat PTCL, along with belinostat from Spectrum Pharmaceuticals (Nasdaq: SPPI ) and ZIOPHARM Oncology's darinaparsin, which was granted orphan drug status by the FDA.
With nothing much to speak of in the pipeline to supplement the only product it has, Allos desperately needs to expand the indications for which it's approved and look to Europe to broaden its market. The biotech is doing both, seeking partnerships with larger pharmaceuticals to market Folotyn overseas, but with only the one drug, investors face a lot of risk. Celgene's Istodax is under priority review by the regulatory agency and a decision is expected by mid-June.
The CAPS community apparently believes the head start Allos has in the market gives it an advantage over the others trying to elbow their way in, as 97% of those rating the biotech believe it will outperform the market. Tell us in the comments section below or on the Allos Therapeutics CAPS page whether it's got the right prescription for growth.
I'll drink to that
Maybe the management of liquor distributor Central European Distribution should lay off the sauce, because, if you can't sell vodka in Russia and Poland, then you probably have bigger problems. CED's stock was cut more than a moonshiner's output last month as production problem's during Russia's peak season and Poles' apparently swearing off spud derivatives caused heavy impairment charges and a lowered outlook for the future. Moody's then weighed in seeking to downgrade its debt. Analysts have followed suit and downgraded the spirits maker.
Brown-Forman is looking to increase its market share in Eastern Europe, and Russia remains a significant customer for its brands that include Finlandia Vodka. Diageo (NYSE: DEO ) is no slouch there either, with its Smirnoff brand a big seller, but even it has seen lower volumes in Poland because of intensified local competition.
Considering the market that's developing for spirits -- Fortune Brands wants to calve off its varied interests to enhance shareholder value -- one of those distillers might be interested in CED, particularly in its beaten-down state. What might hold them back is the prodigious amount of debt that it's negotiating to restructure. That load is what's keeping CAPS members like dcrednek from tapping it as an investment:
CEDC looks like its on the edge of the abyss. A massive debt load, cash flow that isn't strong enough to sustain debt service AND business expansion, coupled with a balance sheet that shows its largest asset as goodwill (even though that goodwill doesn't represent any significant brand or market advantage).
Watch to see if CED can put itself on a more sober path by adding the stock to the Fool's free portfolio tracker.
Mapping your strategy
Pinpointing on a map exactly where your enemies are would be a tremendous benefit to a government, especially when those enemies also happen to be your own citizens who disagree with your policies.
On the surface, China Information Technology's "MapWorld" is a seemingly benign application like Google Maps that allows you to find a hotel or subway station. Yet combine that precision with an all-encompassing data plotting technology and biometric identification system and you easily have a scary ability to track down those on your "enemies list." Both Sohu and Baidu (Nasdaq: BIDU ) provide mapping capabilities in China (Google thus far has failed to obtain a license to do so), but it is CIT that has been named the sole provider of the geographic information system platform software for China's Map World and sole supplier of all its software programs.
China Information Technology is still flying low on Wall Street's radar, but you can map its progress by adding it to your watchlist.
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.