The world's top value investors love it when their best stocks ideas are selling at bargain-basement prices. For those rarified investors, companies offering fire-sale prices become no-brainer buys.
So regular investors like you and me would do well to emulate the masters and look at companies offering a "buy one-get one" sale on their stocks. We'll pair the companies selling at least 50% below their 52-week highs with the insights of the top investors in the Motley Fool CAPS community. When top earthbound investors also like a company's prospects, it may be wise for us to take notice, too.
CAPS Rating (out of 5)
|Alcatel-Lucent (NYSE: ALU )||****||64%|
|Teekay Tankers (NYSE: TNK )||****||57%|
Source: Motley Fool CAPS.
Naturally, you'll want to do more due diligence before buying. Low-priced appliances in the dent-and-ding section of your home-remodeling superstore might be there for more reasons than just a few scratches on the surface: Real trouble might be lurking below. Same thing here, so make sure there's nothing seriously wrong with the company before you plug it into your portfolio.
Making a connection
It might not be the two-bagger-plus some investors are hoping for, but even analysts at BMO Capital see the momentum turning in favor of communications equipment provider Alcatel-Lucent. Continuing its trend of taking share from Cisco (Nasdaq: CSCO ) and Juniper Networks (NYSE: JNPR ) , particularly in the router market, and with LTE becoming such an important component of future telecom expansion, the equipment maker should be able to capitalize on its leading position by deploying more of its wireless and optical technology. BMO sees shares hitting $4 a stub, which would represent a 65% gain from current levels.
Previously I noted Alcatel was driving a huge wedge into the market with its small-cell wireless technology that will help telecoms meet the burgeoning demands being placed on their networks. Although other analysts remain concerned about its sale of the Genesys, its call center and videoconferencing software unit, the separation allows Alcatel to focus its energies on its core networking infrastructure and beating Cisco and Juniper in their own backyards. Let the short-sellers target it; they'll be squeezed when the expected collapse doesn't materialize.
CAPS member kferg2 believes the liquidity concerns are overblown and is confident it will be able to successfully generate the cash flows necessary to sustain itself.
rising margins, improving cash flow, more cost savings in 2012. Debt is scaring investors away. Once investors become confident the cash flow will continue the stock will be close to 5
Clearer sailing ahead?
Has the shipping market bottomed? After threatening to join Davy Jones' locker, oil tanker fleet operator Teekay Tankers is heading for open water once again as rates rise and demand is filling out its sails.
The company admits its fortunes rise and fall on the swells of the broad tanker market, which has been swamped with a glut of ships for years now. Both the dry bulk and the oil tanker markets got caught building more ships than they could handle as demand dropped as the global economy tanked. Rates, however, have perked up again, quadrupling in value from the low points and China once again has become the driving hope of the industry.
Although industry leader Frontline (NYSE: FRO ) once appeared to be in danger of capsizing, it too offered up healthier guidance that encouraged investors to believe the industry was moving out of the doldrums. I don't know if I'd give the "all clear" signal just yet because we've seen squalls arise suddenly before, but with a dividend that's yielding north of 15% these days an investor can appreciate getting a hefty payout from Teekay while waiting for things to improve.
With the economy turning around a bit, and automotive industries selling more cars, oil will be a necessity. Teekay Tankers will reap the rewards of this pickup.
Let us know on the Teekay Tankers CAPS page or the comments section below whether you think the stock will sail again, and add oil tanker to the Fool's free portfolio tracker to be notified if and when it happens.
Have half a mind
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