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. Because the world of penny stocks is often full of manipulation and deceit, investors can have a hard time separating its few good offerings from the multitude best ignored.
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 of the time. Believe it or not, you'll find some of the best CAPS All-Stars among those members.
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:
*Price when the outperform call was made.
Your two cents' worth
Investors in Dendreon may find out sooner rather than later whether their faith in the maker of prostate-cancer therapy has been worth it. It recently announced that its clinical-trial analysis for Provenge would be available in April, rather than at midyear as previously anticipated.
Dendreon true believers have ridden a roller coaster since the stock surged to more than $20 a share in 2007 on a positive pronouncement by an FDA advisory committee. The euphoria was short-lived, though, and the stock has since traded relatively flat since. Some investors even find it to be a pretty scary stock to own. Dendreon operates in a space where trial-result timetables are more uncertain than for other diseases. Schering-Plough (NYSE: SGP), for example, is in a race of its own for hepatitis C therapies.
Yet CAPS member pick1998 remains hopeful, even confident, that Dendreon will achieve the results it is looking for:
I expect favorable phase III data (22% or higher survival benefit) from confirmatory Provenge trial. I am a strong believer in cancer vaccine. Both [Celldex Therapeutics] and [Dendreon] will win FDA approval at the end, although many previous cancer vaccine trials faulted. The progress in cancer vaccine in both academic and industrial R&D is impressive. We will see breakthroughs as we learn more how to stimulate or train our own immune defense system to clean up the worst enemy of our own.
A coin toss?
Crane maker Manitowoc is having to do some heavy lifting in the current economic climate. With the crane division accounting for 85% of its business, and the construction industry in decline, the company is finding it necessary to cut 2,100 jobs. CEO Glen Tellock said this is one of "the most difficult financial markets the modern world has ever experienced." The tough times are certainly similar to those affecting diversified manufacturer Terex (NYSE: TEX), which makes cranes and other heavy equipment and machinery.
CAPS member pasteeater says that so long as the recession isn't dragged out, Manitowoc should still be a winning investment:
Company has strong enough finances to make it through the next couple of years. could be turbulent over the short term but I believe as it sits right now it is worth over $9.00 a share. If the recession lasts over 2 more years we are all in trouble anyway.
Penny for your thoughts
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? It pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page. Consult our free CAPS investor-intelligence community, where your two cents count as much as anyone else's.
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