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 a pair of 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)
|Exide Technologies (Nasdaq: XIDE )||****||75%|
|Insmed (Nasdaq: INSM )||****||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.
We've got the power
With U.S. automakers Ford (NYSE: F ) and General Motors reporting fairly strong January sales, there's the glimmer of hope the industry may be back on track to attack previous annual sales records it achieved before the financial crisis hit. At the very least, they could return to normal levels.
That sounds like it would benefit lead-acid-battery maker Exide Technologies, as there should be a trickle-down effect since it actually targets to aftermarket market. But while Exide does offer batteries to OEMs, they are primarily foreign car makers like BMW, Fiat, and Honda, though domestic companies like Deere and PACCAR (Nasdaq: PCAR ) are also customers as well.
Third quarter results came in lighter than expected as an unseasonably warm winter -- recall all those Diehard battery commercials about cold starting your car in winter to understand why December through March would be peak sales periods -- has analysts thinking Exide may end up spending more of its cash as a result while raising its debt profile. BMW, however, just reported its January sales were up more than 6%, with better North American and Chinese demand than expected and more sales seen coming.
I previously rated Exide to outperform on CAPS, believing, as tallericojr does, that with EV's turning into something of a bust, a traditional battery maker like Exide should prosper.
With the auto industry starting to come back, EXIDE will go up. Electric cars are not taking off as thought, and this company would be a very good 1-3 month investment.
Add Exide Technologies to your Watchlist to see if an improving domestic auto market will serve as a trickle charge to the battery maker's performance.
Back in the race with Arikace
It took a little bit longer than expected, but biotech Insmed is finally back on track with its lung infection therapy Arikace.
Last year, the FDA forced Insmed to put Arikace on hold until it could examine more closely how it affects rats. I thought management was exhibiting a bit of hubris in saying it would be able to get its trials back on track sometime during the fourth quarter, but analysts seemed to agree, so I figured maybe there was something to it.
Turns out those opinions got ahead of themselves a little, but earlier this month the FDA partially lifted the hold, and Insmed has begun enrolling patients in clinical trials. Yet while the regulatory agency approved trials to begin for non-tuberculous mycobacterial (NTM) lung disease, it kept the hold in place for cystic fibrosis, which makes it less than optimal since there's a $1 billion addressable market in C.F. Arikace, as a once-a-day therapy, would compare favorably with Novartis' (NYSE: NVS ) Tobi, which is taken twice a day.
I do believe that the company will soon report they are resuming both phase III studies, and the share price will return to the high 5 range.
Let us know on the Insmed CAPS page or the comments section below if you think it will soon have both irons in the fire again, and add the stock to the Fool's free portfolio tracker to be notified if it happens.
Have half a mind
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