The occasional shower of pennies from heaven might do our bank accounts some good, but we Fools can't say the same for penny stocks. The world of penny stocks is often full of manipulation and deceit, making it harder for investors to separate its few good offerings from the multitude best ignored. Though some investors think cheaper stocks have a greater chance to appreciate, those stocks may be cheap for a reason. Indeed, a $20 stock may have even better chances of gaining value than a $0.20 one.
Still, many investors dabble at the low end of the stock-price spectrum. At Motley Fool CAPS, we award the "Pennies" title to investors who rate stocks trading in the single digits more than half the time. Believe it or not, you'll find some of the best CAPS All-Stars among those players.
Pinching pennies
This week, we'll look at some of the low-priced investments these All-Stars have praised. If the best investors regularly scanning this end of the market have singled out these companies, we might want to turn our umbrellas upside-down -- or run for cover!
Here's the latest list of low-priced stocks with All-Star support:
|
Company
|
Price*
|
CAPS Rating
|
Player
|
Player Rating
|
|
Eldorado Gold (AMEX:EGO)
|
$6.00
|
****
|
uvcmodel2007
|
99.00
|
|
Spectranetics (:SPNC)
|
$9.03
|
***
|
Tankota
|
97.49
|
|
Immersion (NASDAQ:IMMR)
|
$9.18
|
*****
|
scampbel131
|
97.89
|
|
Himax Technologies (NASDAQ:HIMX)
|
$4.95
|
*****
|
zygnoda
|
97.90
|
|
Grupo TMM (:TMM)
|
$2.06
|
*****
|
Humle100
|
95.74
|
*Price when the outperform call was made.
As we delve into the low-priced "pennies," we find that the companies are generally well-liked by the CAPS community, as all are rated three stars or better.
Can't touch this
If you've immersed yourself in the virtual world of off-road bike racing, you've probably felt the bone-rattling, rutted path your motocross bike has taken. Your hands holding the controller feel the vibration of every virtual rut and rock you hit. You can thank Immersion, a leading haptics developer.
Haptics, the technology of touch feedback, is perhaps most readily identified with gaming consoles, and it's where this Motley Fool Rule Breakers recommendation has licensed its technology to more than a dozen companies including Logitech (Nasdaq: LOGI ) and Apple (Nasdaq: AAPL ) . Yet you'll also find Immersion's haptics technology in cell phones, automotive touchscreens, surgical simulators, and more.
CAPS investor FutureMonkey thinks Immersion's touchscreen technology will be the driving force behind future growth. This player writes that it's appearing in a lot of areas and will become ubiquitous.
Top rated CAPS All-Star spiritof78 also liked the potential a couple of weeks ago for haptics to become omnipresent. He sees it as being a disruptive technology particularly in the field of surgery:
Sounds like just another technology company ... [However,] their technology certain[ly] has the potential to be vital [particularly] in the surgical realm. Just as simulators have become [ubiquitous] in the field of police and military training how long before medical students are performing virtual surgeries ... before they ever touch a live patient. Has the potential to be highly disruptive... [T]wo very strong signs though:
1. 600+ patents provide a large moat ...
2. Zero debt and 4.5 a share in cash on hand provides a decent cushion.
Of course, not everyone is sold on haptics. A baker's dozen of CAPS investors see Immersion underperforming the market, like bluedome, who thinks that when the payments from Sony eventually cease, Immersion will see its growth die.
Make some change
What do you think? Should we fill up the change jar with these penny stocks, or ignore 'em like a discarded coin on the street? Consult our free Motley Fool CAPS investor-intelligence community, where your two cents can be as helpful as anyone else's.
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