5 Top Stocks at Half-Price

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 five 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.

Stock

CAPS Rating
(out of 5)

% Off 52-Week High

American Dairy (NYSE: ADY  )

****

51%

Walter Investment Management (NYSE: WAC  )

****

61%

SandRidge Energy (NYSE: SD  )

****

50%

SkyPeople Fruit Juice (NYSE: SPU  )

*****

53%

The9 (Nasdaq: NCTY  )

****

56%

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.

Take two, they're small
No one seems particularly happy with the performance lately of SandRidge Energy, including some smart Fools who wonder whether it's about to fail. A toxic mix of high debt, negative tangible book value, and negative earnings seems to suggest a company careening out of control.

Yet SandRidge says that if you look at its PV-10 ratios -- an arcane calculation used by oil and gas companies to estimate future gross revenue to be generated from the production of proved reserves, minus the costs associated with production and future development (then discounted at a 10% rate) -- it is well positioned to grow based on higher oil and natural gas price inputs.

The CAPS community remains very bullish on SandRidge's prospects, as 96% of those rating it believe it will outperform the market. But it's not a universally held opinion, and CAPS member LoneWolf888 thinks investors are giving it a free ride because it's been riding on the coattails of billionaire investor T. Boone Pickens:

This is strictly a Boone Pickens holding. If Boone didn't have a huge position in this stock, no one would take a second look. Going nowhere fast ...Sometimes Boone actually picks dogs, and this is 1 dog that won't hunt.

At just 9 times forward earnings estimates, SandRidge is cheaper than similarly situated exploration outfits like Patterson-UTI Energy (NYSE: PTEN  ) , which trades for more than 37 times estimates. If it can navigate the negative factors facing it, SandRidge might prove a profitable investment after all, particularly when compared with its growth prospects.

Let us know on the SandRidge Energy CAPS page or in the comments section below whether you think this oil and gas exploration specialist can drill down to profits.

Another brick in the wall
Although Chinese dairy producers American Dairy and Synutra (Nasdaq: SYUT  ) are similarly priced, their charts tell markedly different stories. Synutra has recovered from the melamine-tainted milk scandal that rocked it two years ago and its stock has quintupled in value since its low point last year. American Dairy, on the other hand, despite being consistently profitable, has bounced around in fits and starts and it was hurt when it slashed fourth-quarter estimates in November.

Yet American Dairy is going up against tough comparisons from the year-ago period precisely because of the tainted-milk scandal. People fled the state-sanctioned infant formula for the formula produced by American Dairy. Now that the situation has settled, the dairy producer is back on an even keel.

CAPS members are bullish here, with 96% looking for the company's stock to outperform the broad market averages. JH06 says to look to its premium products for the growth levers:

China's population, better incomes in booming cities creates demand for ADY premium milk products like the Walnut series powder, premium infant rice milk formulas, and a nutritious seniors soybean powder milk

Have half a mind
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.

Sign up today for the completely free service, and tell us whether these stocks are twice as good at half the price.

Try any of our Foolish newsletter services today, free for 30 days.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.


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