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
|
| Neostem (NYSE: NBS ) |
****
|
50%
|
| Opnext (Nasdaq: OPXT ) |
****
|
53%
|
| Qiao Xing Mobile (NYSE: QXM ) |
****
|
54%
|
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
The entire universe of stem cell researchers should benefit from the catalyst provided by an appeals court decision allowing the use of tax money to fund research. From Pluristem Therapeutics, which uses placental stem cells taken from the mother's end of the placenta rather than the fetus' end, to Geron (Nasdaq: GERN ) , for which stem cell research is only a part of its business, the clarity that the decision provided gave researchers the hope they'll be able to sidestep the firestorm of criticism their work engenders.
Surprisingly, Neostem doesn't seem to be enjoying any lift from the decision, despite offering a proprietary VSEL technology that uses an individual's own adult stem cells that have characteristics of embryonic ones, making engraftment faster, safer, and cheaper. Shares are off 12% since the decision was reached at the end of last month.
Indeed, many players are down, with StemCells falling 5% and Cytori Therapeutics (Nasdaq: CYTX ) down more than 15%. Many like Pleuristem are flat, suggesting any benefit to be derived is still in the future.
CAPS member nshamapant believes divine intervention may yet come to Neostem's side as the Vatican has endorsed its technology.
PCT will boom
Erye still growing
Insider Buying-CEO even receives salary in shares of the company
VSEL supported by Vatican
projected earnings growth of 50% every year for next 3 years. To be profitable by 2013 according to Lifetech Capital
Let us know on the Neostem CAPS page whether you think the stem cell researcher will enjoy a halo effect from the ruling or it will become a divine comedy.
Generating interest
The optical networking industry started off the year hot but has cooled considerably as inventory issues and slowdowns have popped up in earnings reports across the sector. JDS Uniphase (Nasdaq: JDSU ) expects an inventory correction to hit sales by 2% to 4% next quarter, and Ocalro reported earnings below expectation and issued guidance well below analyst forecasts. Opnext revised its guidance from a range of $97 million to $102 million down to $95 million.
Because of its diversity, however, analysts are looking for JDS Uniphase to come out ahead in the end. Optical networking is known as a historically volatile segment, so its having branched out into test and measurement business, which actually accounts for nearly half of Uniphase's revenue, ought to balance out the rough parts.
Not so for Opnext, which also had to contend with the disaster in Japan where its module assembly facility is located. But with 97% of CAPS members still rating the optical specialist to outperform the market, it seems they think it will see its way through.
The Fool's free portfolio tracker can aggregate all the news about Opnext and whether the stock will connect again.
A smaller form factor
Despite thinking the takeover attempt of Qiao Xing Mobile by its parent Qiao Xing Universal Resources (Nasdaq: XING ) was a bad move all around, I figured with the parent owning 60% of the offspring there was little chance the effort would fail. I did note that those who were trying to play arbitrageur ran the risk of loss if the deal fell through, though I thought it unlikely.
Turns out that's exactly what happened (they said they couldn't get a quorum and they yanked the deal off the table), and the mobile subsidiary's stock has cratered in the aftermath. The resources company -- which was a mobile communications player before it decided to become a natural resources play by buying a copper and tin mine -- was looking to strip the cash off Qiao Xing Mobile's balance sheet for its own uses, and now its stock is down 33% year to date.
CAPS members weren't alone in being bullish about Qiao Xing Mobile getting acquired as the two analysts covering the mobile specialist marked it to outperform. Now that it's going to have to fend for itself, tell us on the Qiao Xing Mobile CAPS page whether you think it can get a clear signal for growth.
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.
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