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. Here, 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.
CAPS Rating (out of 5)
% Off 12-Month High
|Exelixis (Nasdaq: EXEL )
|Stillwater Mining (NYSE: SWC )
|USEC (NYSE: USU )
Source: Motley Fool CAPS.
Not every short sale goes as planned, making shorting a risky proposition. Stock prices can be irrational longer than you have money to stay in the game. So don't use this as a list of stocks to sell or buy -- just the launching pad for further research.
Searching for a solution
Although some analysts believe a new prostate cancer drug from Bayer may make the attempt by Exelixis to bring its own treatment to market superfluous, Medivation's (Nasdaq: MDVN ) therapy has the potential to jump ahead even further. There's talk of possibly stopping clinical trials early because of the reported success so far, similar to what happened with Johnson & Johnson's Zytiga.
In fact, prostate cancer has become a hot area for research, and though sales of Provenge from Dendreon (Nasdaq: DNDN ) have thus far proved disappointing, it was one of the drugs that really got the ball rolling in this area. More so than any one particular therapy proving far and away better than another, it appears Exelixis' biggest threat is just that so many pharmaceuticals and biotechs are pouring money into the space, it could get lost in the crowd. Some researchers think prostate cancer drugs could generate almost $9 billion in sales before the decade's out.
Highly rated CAPS All-Star and biotech guru zzlangerhans has concerns about the FDA further down the road, but he sees Exelixis having good prospects nearer term, in spite of possible hurdles.
There's not much time before topline data is announced from the EXAM phase III trial of cabozantinib in medullary thyroid cancer. That's a rare form of cancer, but I wouldn't underestimate the power of the first successful phase III trial in Exelixis' long history. It also would establish proof of concept for a drug that has also demonstrated significant positive phase II results in ovarian and prostate cancer, which are vastly larger markets.
Add Exelixis to your watchlist and see whether it's able to make it past regulatory agency roadblocks and cutthroat competitors.
Driving a rebound
U.S. auto sales revved their engines in September, rising about 10% in September, with the annual sales rate exceeding 13 million vehicles, the strongest rate since April. General Motors saw sales jumped 20%, Ford (NYSE: F ) sales were up 9%, and Chrysler paced the pack with a 27% increase in sales.
Whether those numbers hold up as the year gets long in the tooth remains to be seen, but it is good news for palladium miners like Stillwater Mining and North American Palladium (NYSE: PAL ) , whose output is a key component of a car's catalytic converter system. A healthy auto industry leads to healthy mining results.
The economy in general, and the auto industry in particular, have weighed heavily on Stillwater and NAP. The former, though, is angling to give itself more exposure to other metals, including gold and silver, by purchasing Peregrine Metals, an Argentinean miner. It paid a heavy price for the purchase though, in terms of actual deal numbers and the toll it took on its stock.
With prices of the silver metal bouncing sharply higher last week, CAPS All-Star member JackCaps thinks investors overreacted in recent weeks, and he finds Stillwater an alternative inflation hedge.
Tell us on the Stillwater Mining CAPS page or in the comments section below if you agree, and then follow its progress by adding it to your watchlist.
The nuclear option
Maybe the Department of Energy would have been better off giving a $2 billion loan guarantee to USEC's uranium centrifuge project than the half-billion guarantee it made to politically connected solar-energy firm Solyndra.
Without bankrolling campaign cash, USEC's had a hard time securing the guarantees for a project that's more in the national interest than yet another solar panel maker. DOE originally rejected the guarantees in 2009, but it has tried to generate support for them since. The regulatory foot-dragging has USEC planning on stopping the project soon if the money doesn't come through by November.
Nuclear energy has had a rough go of it since Japan's disaster earlier this year, with uranium miner Cameco down 56% from its 52-week high and Denison Mines off 75%.
CAPS member NOMNOM thinks DOE will eventually come through, which evidently comports with the view of the broader CAPS community, 96% of whom think it will outperform the broad market averages. You can tell us on the USEC CAPS page or in the comments section below if you agree, and then follow the negotiations by adding it to the Fool's 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. Weigh in with your own thoughts on which stocks you think can keep the dogs at bay.