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
Investors often get nervous when they see insiders selling off shares, though it's generally a relatively benign event. The real indicator for future stock movement is insider buying.

Famed money manager Peter Lynch said, "Insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise." He even used insider buying as one of the characteristics of a "perfect company."

Insiders at Helicos BioSciences were buying up shares as early as September. That was right around the time the company announced it was finally making sales on its genetic testing equipment, which sent its shares soaring. CAPS member profitaddict notes:

Helicos Biosciences is the only company currently capable of sequencing RNA directly. This should continue to capture the attention of research institutes, biopharma companies etc. I see Helicos as being a huge buyout target in the near future. Lots of insider buying recently is another bullish signal. I would love to see another multi system sale announcement like the one we recently learned of from RIKEN in Japan.

My guesstimate buyout price in the near term anywhere from 7.5-20 / share

However, management has put a damper on a potential buyout, at least for the time being, saying it's no longer actively shopping the company. Executives now feel that based on its own stand-alone performance, Helicos can make a profitable go of it all by itself.

That's fine by Wiseinvest70, who sees Helicos' DNA microscope as a driver with huge future potential: "Well same case, soon (next 2 quarters) they will be announcing huge contracts for their Genetic Analysis System. I will really foresee this stock to go up to 30 to 35 [dollars] in the next 5 years easily."

Bigger slice, smaller pie?
With solar players becoming more vertically integrated, look for near-term pricing pressure to hold back their stocks. LDK Solar and ReneSola (NYSE:SOL), for example, scooped up smaller companies in an effort to diversify their revenue streams, but that also added to the solar panel supply glut. Industry analysts at iSuppli say the situation won't correct until 2012. Still, they expect some players, such as Suntech Power (NYSE:STP), to grow along with the wider photovoltaic industry.

CAPS member drago007 thinks that LDK Solar should also stabilize along with the market: "Once solar inventory stabilizes and the global economy starts seeing real signs of recovery, LDK [Solar] is well positioned to do well not only in the Chinese solar market but Europe as well."

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.