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.
CAPS Rating (out of 5)
% off 12-Month High
|Alpha Natural Resources (NYSE: ANR )||****||70%|
|InterDigital (Nasdaq: IDCC )||****||53%|
|OmniVision Technologies (Nasdaq: OVTI )||*****||67%|
Source: Motley Fool CAPS.
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.
Coal in your stocking
China and India remain the hope of the coal mining industry, according to the analysts at BHP Billiton, who forecast they will account for more than two-thirds of global demand for metallurgical coal between now and 2025. Obviously they're not too worried about their carbon footprint.
That might not help Alpha Natural Resources, because while India gets a portion of its coal shipments, it's also heavily tilted toward Brazil, Italy, Turkey, and the Ukraine, which together with the subcontinent account for 35% of Alpha's annual coal revenues. And with energy usage trending toward "cleaner" alternatives, the outlook for Alpha, Arch Coal (NYSE: ACI ) , and James River Coal (Nasdaq: JRCC ) may not be so robust.
But CAPS member jeffrycooks thinks all of that has been accounted for and Alpha represents a good buy now: "This has all bad news behind it for now -- no resolve for many as more poor inherited management decisions are buried under the rug. What more is capitalism -- never pretty, but ANR no doubt will remain and succeed for many years to come."
Add Alpha Natural Resources to your watchlist to steel yourself from financial chaos overseas.
Odd man out
Wireless technology specialist InterDigital is still trying to sell its patent portfolio (or itself), but after the flurry of buying that saw Nortel's patents scooped up and Motorola Mobility (NYSE: MMI ) bought out by Google, the market for wireless technology IP has decidedly cooled off. InterDigital now trades where it did before the outburst of exuberance.
That means investors are going to have to contend with its business as is, and that's been just as chilly. Revenues last quarter fell 17% from the year-ago quarter, causing profits to drop 26%, and analysts don't expect that to change for the better in the fourth quarter, where they're forecasting a 23% year-over-year decline in sales.
Takeover rumors will likely cause the stock to be volatile; the suggestion that came out this morning that there's a new bid in the works caused shares to spike. Investing by rumor is a risky game to play and not recommended. Although even a blind squirrel finds a nut or two, it's not a very productive way to go. Better is to concentrate on how far smartphone sales are likely to climb, as CAPS member Lawrence56 suggests, as that represents the true potential of the company absent a buyer.
Shake it like a Polaroid
We're all familiar by now with the woe that befell OmniVision Technologies after it lost its preeminent position as sole provider of Apple's (Nasdaq: AAPL ) image sensor in the latest iteration of the iPhone. While rumors had persisted that that was the case, the iPhone 4S teardown proved it. It wasn't kicked to the curb, but rather was sharing the front seat with Sony.
Yet that was enough for the market to read doom and gloom into its future, as if it would just stand still and as if its latest innovation, the OV8830 sensor, would not come to market. I think this development is just a pause in OmniVision's leadership position, and we'll soon see it regain traction. I've marked it on CAPS to outperform the broad market indexes over the next few years as it won't be a quick turnaround to be sure. But the road ahead still looks wide open, particularly as those same forces that will push InterDigital ahead look just as strong for OmniVision.
Add OmniVision Technologies to the Fool's free portfolio tracker to see whether it's near an inflection point to capture greater growth ahead.
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.