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 three 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.


CAPS Rating (out of 5)

% Off 12-Month High

Gulf Resources (Nasdaq: GFRE)



NIVS IntelliMedia Technology Group (AMEX: NIV)



The Phoenix Companies (NYSE: PNX)



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
After gaining a Nasdaq listing last November, shares of Chinese bromine producer Gulf Resources really haven't gone anywhere except down. They peaked at almost $15 a share at the start of the year and have straggled down to their current low point.

Not that there doesn't appear to be a strong market for bromine. It's used in flame retardants, chemical manufacturing, and even the oil and gas exploration industry, so Gulf Resources is finding particularly hot opportunities in the pharmaceutical sector. That led it to increase its full-year profit prospects for the second time this year. Rising bromine prices have allowed U.S.-based Albemarle (NYSE: ALB) to raise its prices on flame retardants, too.

What may be holding it back is the fear of investing in Chinese small-cap stocks, because accounting scandals have rocked a number of them. CAPS member megisto387 says Gulf Resources is trying to ward off being associated with that bunch of bad apples by hiring Big Four accounting firm Deloitte Touche.

Just preemptively engaged Deloitte to provide more transparency to the company. Great move as other chinese small caps are being attacked by short sellers. Buying on the dip into a P/E of 6.5 and great future growth potential. The company is trying to expand its already strong foothold in the industry and producing strong earnings to boot. The transparency measures they are taking now will instill investor confidence in this strong growth company, as management is taking an active approach to supporting its shareholders.

A reserve player
NIVS IntelliMedia Technology Group, another Chinese small cap apparently being pressured because of some peers' less than honest approach to bookkeeping, is a consumer AV electronics maker. CAPS member Option1307, commenting on another member's post recommending its shares, wonders about the numbers.

With this comes the question of, "are these numbers real"? This is a really valid question because it has come to light recently that several Chinese companies have been reporting false numbers and fluffing up their true financial standings/earnings/etc. aka lying about their true success and potential. Going along with this potential "financial statement padding" several people, including Fools around here, have questioned the validity of NIV's auditors. NIV uses a auditor that is relatively unknown and thus does raise some questions. This is something that you personally will have to decide, do you actually believe the numbers that NIV is reporting? 

It's likely investors will find this is a recurring theme when they decide to dip their toe into the Chinese stock market.

Meanwhile, China Telecom (NYSE: CHA) contracted with NIVS IntelliMedia Technology Group to build its new 3G phones. With China Telecom and China Unicom (NYSE: CHU) gaining more traction in the market against China Mobile (NYSE: CHL), NIVS IntelliMedia should see more business coming its way, too.

No assurance of growth
Although fears of fraud can cause a stock to plummet, a changing business environment can do that even for domestic stocks. Life insurance provider The Phoenix Cos. reported widening losses in the latest quarter as its business deteriorated. The financial services company says its goal of improving its balance sheet remains on track, but Moody's isn't convinced and recently said the company's weak capital position further hampers its ability to gain financial flexibility. It downgraded the Phoenix Cos.' debt rating further into junk territory.

CAPS All-Star mrindependent acknowledges the financial situation is dicey here, but if the company were part of a diversified portfolio, it might be worth a small bet on the turnaround. You can add the insurer to your My Watchlist page and have all the Foolish news and analysis about this stock aggregated for you.

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

The Fool owns shares of China Mobile. Moody's is a recommendation of Stock Advisor and Inside Value, and the Fool owns shares of it. Try any of our Foolish newsletter services free for 30 days

True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Fool has a disclosure policy.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article.