4 Stocks That Bucked the Trend

With bankruptcy warnings and delisting notices slamming some of the more popular stocks trading below the $1 mark, it's easy to be concerned.

Things don't always end badly, though. Some beleaguered companies with penny-stock prices were on the brink of extinction before bouncing back to where they are today. I'm going to review a few of the notable survivors.

Don't take my optimism as gospel, though. Most of the stocks trading on the wrong side of the decimal point are there for a reason. They're not going to bounce back. However, there are always exceptions to the rule -- and even speculators can learn a lot by studying the few investments that went on to appreciate several times over the price points where most investors left them for dead.

Let's check out the companies that broke the buck -- and lived.

1. Sirius XM Radio
Saddled with debt and rapidly approaching repayment milestones after a drawn-out merger process, the satellite-radio provider was preparing for the worst in early February of last year.

Liberty Capital (Nasdaq: LCAPA) stepped in with a loan that kept the bankruptcy judge away, beating out Charles Ergen's EchoStar (Nasdaq: SATS). Sirius XM hasn't looked back. It did suffer through back-to-back quarters of net subscriber defections during the first half of 2009, but it has turned the corner by adding to its rolls in each of the three following quarters.

Sirius XM is now profitable, and subscriber growth is bound to continue unless auto sales tail off.

2. Vonage
Shares of the Web-based telephone service soared 35% last week, leading the pack of NYSE-listed companies.

Vonage seemed to be left for dead last year, but it broke through when it posted an unexpected profit in the second quarter. It has remained in the black ever since.

Vonage's road to redemption continued when it introduced smartphone apps for discounted international phone calls late last year. Defying the skeptics, Vonage's latest quarter was a beauty with record profitability, an easing of churn, and average subscriber monthly fees climbing on the strength of a popular unlimited international dialing plan.

3. Pier 1 Imports
Instead of becoming the next Linens 'N Things, Pier 1 made it through a rough patch without being discarded in the home-furnishings trash heap.

It's been an amazing run for Pier 1. The same stock that traded for as little as a dime has gone on to appreciate 70-fold. It certainly hasn't hurt that the economy has shown signs of life, and homeowners are making the most of the early whiffs of optimism by sprucing up their digs. However, even Mr. Market has been slow to see this one coming. Pier 1 posted a healthy quarterly profit last week, yet analysts were expecting a small deficit.

4. Citigroup
There was a time when even the "too big to fail" bankers appeared to be on the brink of failure.

Bank of America (NYSE: BAC) shares traded as low as $2.53 early last year, but Citigroup briefly broke below a buck. Its stock had intraday lows of $0.97 and $0.99 on two different trading days in early March of last year -- though it managed to close above the $1 mark on both of those days.

Citigroup posted a profit in its latest quarter, and analysts see the banking giant earning $0.35 a share this year and $0.44 a share come 2011. There will naturally be challenges and regulatory hurdles for Citi, but it's clearly in a better place these days.

Are you following a stock trading for less than $1 a share that you think will bounce back? Share your thoughts in the comments box below.