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.

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
It must have felt like an additional heaping of salt in the wound of Huron Consulting Group investors. A hedge fund under fire for trading on insider information began unwinding its 6% stake in the consulting services provider.

The first grains got rubbed in this past August, when Huron's audit committee uncovered an "agreement" in which shareholders of at least one company it purchased had redistributed their acquisition-related payments among themselves, as well as to some Huron employees. Management was terminated, and the company restated its financial results going back several years. Naturally, the stock tumbled in the aftermath, but some investors thought it had potential to make monster returns from those lows. Huron had been steadily climbing its way back up as the new management team sought stability.

Then the previously mentioned second dose hit. Last month, hedge fund Galleon Group began unwinding its stock positions. Its founder has been charged with trading on insider information, a widening scandal that could also ensnare former Advanced Micro Devices (NYSE:AMD) CEO Hector Ruiz and an executive at Intel (NASDAQ:INTC), among others.

Despite Galleon liquidating approximately 90% of its holdings, according to sources, shares of Huron have managed to hold up fairly well. The stock is down around 10% over the past month, but it has doubled since the lows it hit three months ago. Admittedly, it's still trading well below its prescandal prices.

CAPS member MajorLeagueFool remains dubious about how high Huron can climb again because its assets consist primarily of goodwill, which the company may end up writing down, but SemiChamp sees the market's reaction as more of a "baby with the bathwater" situation and expects it to fully recover.

With earnings scheduled for later this week, investors might want to wait for an all-clear signal from management. You might miss the inflection point if the news is good, but you'll still have further opportunities to ride the wave of recovery. If more bad news comes out, which is always possible, the stock could head to the cellar again. It comes down to the cockroach theory: Where there's one, you're bound to find more.

Bigger slice, smaller pie?
RAIT Financial Trust is a real estate investment trust specializing in commercial mortgages. Even though this may not be the best market for commercial real estate, RAIT could also see a bevy of distressed real estate options to choose from.

Treasury Secretary Timothy Geithner has been trying to jawbone confidence back into the real estate market, yet according to the industry research firm Real Estate Econometrics, the default rate for commercial real estate mortgages held by U.S. banks is likely to peak at 5.4% by 2011, the highest rate since 1992. Conditions like those may also serve to put extreme pressure on RAIT's operations.

CAPS member samiamaustin admits the lower valuations in RAIT's portfolio could take a toll, but ultimately the broad spectrum it covers will help it win out.

[RAIT] has variety in its portfolio. Although its taking losses in the valuations of some assets, it is still [bringing] in cash.

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.