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 that 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

Delta Petroleum (Nasdaq: DPTR  )

****

65%

Golden Star Resources (NYSE: GSS  )

****

60%

TransAtlantic Petroleum (NYSE: TAT  )

****

53%

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
This looks crazy. Delta Petroleum is turning itself around, selling off all non-core assets, working down its debt, and focusing all of its attention on its most promising assets, yet the stock will not stop falling. At less than $0.50 a share, Delta is priced as if it's going out of business, but no one believes that's going to happen. It's also facing a looming delisting deadline -- Aug. 8 -- that means whatever actions it's going to take to maintain compliance are going to have to be done in a hurry.

Non-core asset sales, such as rigs belonging to its DHS joint venture with Chesapeake Energy (NYSE: CHK  ) , are still under way. Delta just sold off its remaining working interests in the fields of the DJ Basin and Texas and will use the proceeds to fund more drilling in the Vega area and reduce its debt. Basically, it's betting it all on the Piceance Basin and hoping for a home run.

While Wall Street is evenly split over its future, the CAPS community remains supportive, with 97% of the All-Stars rating it believing that it will make the necessary recovery. Let us know on the Delta Petroleum CAPS page whether you think the natural-gas driller's big bet on black will pay off.

Going down with his ship
African gold miner Golden Star Resources is also making a go of turning itself around, and considering the levels gold prices trade it, you might be surprised that it's struggling as much as it is. With Goldcorp (NYSE: GG  ) and Yamana Gold (NYSE: AUY  ) more than 20% above last year's trade, you wouldn't expect Golden Star to be so depressed.

But it's suffered from a number of setbacks, not least of which is poor management. It had to replace its management team at its premier Bogoso mine, bring in a new CFO, hire an operations consulting firm, and conduct a comprehensive review there. Then with all the rainfall it suffered through in the back half of 2010, it's only just beginning to tread water again in terms of production.

CAPS member idvst8 thinks Golden Star has the parts in place now to charge ahead again.

The company is producing great levels of Gold, and has oversold beyond a reasonable level. I will begin to load at these levels (Sub $2.5) and look to reap the rewards come this Fall, when gold jumps to the next vertical level. The miners as a whole have been beaten up far below fair values.

With 94% of the 850 CAPS members rating the gold miner believing that it will outperform the market, it's apparent they think it's ready to turnaround, too. Add Golden Star to your watchlist, and have all the Foolish news and analysis about it aggregated for you in one place.

A smaller form factor
With operations in Turkey, Morocco, Bulgaria, and Romania, TransAtlantic Petroleum doesn't exactly drill in all the usual places. Sometimes being away from the maddening crowd can work to your advantage; for TransAtlantic lately, not so much.

Going off the beaten path is popular these days, and perhaps profitable, too. Chevron (NYSE: CVX  ) is looking in some of Bulgaria's wild corners for shale gas, and right now Bulgaria is almost wholly dependent on Russia for its oil supplies. It wants to not be locked into just one source, soTransAtlantic is hoping it can win a concession to begin production there by 2012.

Strong top-line growth bolsters the view that TransAtlantic can successfully compete, even if the stock has been on a steady decline since the spring. Yet it also recently announced without explanation that it's abandoning an exploration well in Morocco and will sell off or let some else run its other operations there.

The CAPS community is unconcerned, as 98% of those rating it mark it to outperform the broad market averages. Monitor how well TransAtlantic Petroleum fares down the road by adding the stock to the Fool's free portfolio tracker.

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.

Motley Fool newsletter services have recommended buying shares of Chevron and Chesapeake Energy. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Rich Duprey has no 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 (3) | Recommend This Article (7)

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 July 11, 2011, at 7:47 PM, rrivers1 wrote:

    TAT also has insiders buying like crazy, http://seekingalpha.com/article/278504-7-stocks-trading-near....

    The main reason for the stock drop imho is having problems with the sec filings. Malone Mitchell since fired the cfo and is looking for a new cfo and had promised never to file late again and to actually file earlier. He has also promised not to dilute the stock, he now has over a 50 % interest in TAT.

    If TAT does what it says it will do by end of year this stock should be back to the levels which we are accustomed.

    I have increased my position in TAT since the drop in price but still have an average at 2.68. I will not sell because this stock should double from current pps.

  • Report this Comment On July 11, 2011, at 8:58 PM, vaderblue wrote:

    DPTR is a losing concern. With debt at $390m

    negative eps, no growth to speak of, no return

    on equity. I ask you when a company sells assets

    to raise capital, I smell bankruptcy. @ .45 per share, I ask where is the value.

    I am vaderblue and I have no intentions of investing in DPTR. I wish them the best but another gas company is about to bite the dust.

    Based on what I see, they need to join Greece

    with a bailout.

    Not deserving of it's cap rating.

    There must be inventory, a positive cash flow,

    indications of and not speculative quarterly growth.

    I see none and historically poor performance.

  • Report this Comment On December 19, 2011, at 6:23 AM, TMFCop wrote:

    vaderblue,

    Good call. Delta just filed for Chapter 11 bankruptcy.

    Rich

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