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 cry about 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 who populate the Motley Fool CAPS community also like a bargain, apparently. Below, you'll find five stocks whose shares are selling at least 50% below their 52-week highs, but still earn top honors from our investor-intelligence database. Consider it a BOGO sale on stocks.

Stock

CAPS Rating

% Off 52-Week High

Freeport-McMoRan (NYSE: FCX  )

*****

78%

GigaMedia (Nasdaq: GIGM  )

*****

77%

Smith Micro Softwate (Nasdaq: SMSI  )

*****

67%

Transocean (NYSE: RIG  )

*****

55%

Yamana Gold (NYSE: AUY  )

*****

76%

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
Comparing Yamana Gold to Agnico-Eagle Mines (NYSE: AEM  ) or IAMGold (NYSE: IAG  ) , you'll find that while all the gold miners have taken a tumble, Yamana has fallen further and harder this year. Yet, as a low-cost producer still on track to produce two million ounces annually by 2012, it seems to have been unfairly tarnished.

It's possible that when it comes to gold mining companies, the market is myopic. It looks not at the value of its reserves, but instead at the price of gold, which has been falling hard lately. If that's the case, then Tuesday's burst of enthusiasm in the market bodes well, as gold surged again yesterday -- leading CAPS members like PrincessStorme to consider Yamana a chance to profit from the madness:

The company's strong but the price has been driven down more than 75% in the recent madness. Gold mining will be in demand and Yamana has a major room for profit!

The falling price of oil (praise be!) would seem to suggest that contract drillers like Transocean could face hard times. If you looked at the decline in its share price, you'd be hard-pressed to argue that. But with the credit crunch threatening an estimated 20% of the deepwater rigs on order -- mostly from smaller companies that rushed into the breach as demand surged -- the market sees larger, more established operators like Transocean as stable bastions. With sizable amounts of cash on hand, they may be able to scoop up unfinished rigs on the cheap. CAPS member WickedSmaht thinks Transocean might be something like the last man standing: "A victim of panic selling, [Transocean]'s price is well below its reasonable book value. While oil exploration investments will slow with a lower oil price, deep-water rigs will be the last ones cut, since the supply is still so tight."

If you've ever found yourself wasting hours playing games online, you'll understand why top-rated CAPS All-Star member Alwayzwrong finds GigaMedia's current valuation all out of whack.

The valuation here is absurd. Their product is as addictive and is marketed towards young people. This is the closest thing to crack in Asia. I cannot tell you how many hours I spent on the computer---not working---because of [Gigamedia] and [Shanda Interactive]. That said, keep an eye on their pipeline, because a company in this industry can fall out of favor for a long stretch at a time. Great short-term investment at this valuation.

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.

GigaMedia is a Motley Fool Global Gains selection. Shanda Interactive and GigaMedia are Rule Breakers recommendations. Try any of our Foolish newsletters 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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