If you're going to fund your brokerage account this month, don't forget your roll of quarters.
Yes, there are certainly plenty of household names breaking the buck these days. Stocks that fell from trading in the double digits to the single digits are now trading to the right of the decimal.
Market volatility will do that.
I first took a look at some surprising stocks trading for less than $1 two months ago. I came back with another five stocks last month. As fate would have it, the sub-dollar menu continues to widen, so I'm back to discuss five more.
Buck the trend
You have to watch what you eat. This isn't a buy list. A lot of these marked-down stocks will continue to fall in price. They come with baggage for a reason, and whether it's pesky debt levels or the inability to turn a profit, their fundamentals will have to improve before their share prices follow suit.
Ideally, it takes just one or two winners to offset a handful of losses, but that's clearly a risky approach for investors. When times are tough, these stocks tend to take it on the chin. The best performer of the 10 stocks singled out over the past two months has been Vonage
Let's go over this month's five names, based on last night's closing prices.
E*Trade
Shield your eyes, E*Trade Baby. You should be saving pennies, not trading in them.
The online discount broker has been spanked lately. It has missed Wall Street expectations in each of the past six quarters, and profits have turned to losses. The company continues to distance itself from its troublesome home loan and equity line products, but it's a work in progress.
The good news is that investors are flocking to E*Trade. The company added 41,000 net new accounts in the third quarter. If you like that, yesterday the broker announced that it tacked on another 63,538 accounts last month alone. This is huge. A year ago, worrywarts figured that exposure to devalued mortgages would sink the company and tarnish its brand. The stock still has a way to go to get back on track financially, but at least consumers have embraced the brand at a time when all of the leading discount brokers are showing a spike in trading activity.
Blockbuster
Is it too late to change Blockbuster's name to BuckBuster? The leading DVD rental chain also finds itself in the piggy bank muck. The irony, naturally, is that the company is doing better than its share price may suggest.
Blockbuster is coming off a healthy quarter, as comps rose a respectable 5.1% on the heels of a huge 30.7% spurt in same-store sales of video game merchandise. However, rental revenue would still have inched higher at the store level without the video gaming assist.
The concern at Blockbuster is that it still has $854.3 million in total debt to tackle. Oh, right, there's also the fear of obsolescence given the surprisingly speedy migration to digital delivery. Blockbuster has some skin in that game, but the sooner it can turn its stores into well-rounded physical media stores the better.
Level 3
The fiber networking giant is trying. Yes, I called Level 3 a giant, since it still commands a $1.2 billion market cap. The fallen tech stock is in the process of buying back gobs of its convertible debt and expanding its content delivery network despite the pesky presence of market leader Akamai
Level 3 slipped into jukebox money last month after providing a bleak near-term outlook. Oh, if I only had a quarter for every company that has talked down this toothless holiday quarter that we're waist-deep in right now.
Great Wolf Resorts
I stayed at the Great Wolf in Williamsburg this summer. The family-friendly resort with woodsy-themed suites and a massive enclosed water park was hopping. Unfortunately, the stock has been going the other way.
What's eating Great Wolf? It's not the concept's popularity. Earlier this month the company posted its tenth consecutive quarter of improving revenue per available room, the most important metric in the lodging industry. The company has some debt demons to tackle, and a lack of liquidity has put the clamps on expansion, but as long as folks keep coming, the concept has more than a fighting chance.
Move
Have you seen the sorry state of the residential real estate market? It's no wonder that the parent company of Realtor.com is in a fixer-upper rut. The surprise here is that Realtor.com is starting to see a pick-up in traffic. September visitors spent 17% more time on the site than they did a year earlier.
Unfortunately, Move posted a slight dip in revenue and delivered a wider loss in its latest quarter. Online stocks are having it hard enough without having to be a play in a sector that is out-of-favor to begin with.
No one said it was going to be easy -- or tasty -- to eat one's way through this dollar menu.
Here are some other ways to buck the buck:
- The original Dollar Menu stocks list was published two months ago.
- I came back with another five stocks last month.
- 5 Stocks Under $10 is a good place to go if you want less risky low-priced stocks.
- Here's Your Shot to Score Big .
