3 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 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.

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
Greater competition, and patients delaying their doctor visits, are leading to lower case volumes at diagnostic-services specialist Genoptix. As high-deductible insurance plans push patients to lay out more out-of-pocket expenses, employers are also facing an estimated 9% increase in medical costs next year. According to a PriceWaterhouseCoopers report, 42% of those businesses plan to increase employee contributions for health-insurance coverage.

Those factors led Genoptix to again revise estimates downward, sending its shares into a tailspin. At its new lower price, Genoptix now trades at a comparable forward multiple to both LabCorp (NYSE: LH) and Quest Diagnostics (NYSE: DGX).

Highly rated All-Star CAPS member tuffsledding thinks all the downside risk has now been priced into its stock:

Profitable company selling for half it's true worth. They have almost $8/share in cash, likely will start repurchasing their own shares soon. The downside now seems minimal, upside potential very attractive. Getting some in my real life portfolio at these prices!

A reserve player
Orthovita lowered the price of its bone spackle Cortoss, and enjoyed a corresponding jump in sales in the second quarter. Sales rose 44% sequentially (there were no Cortoss sales a year ago), but gross margins fell to 66%, from 69%. Yet the situations in which Cortoss can be used are shifting from inpatient to outpatient procedures. Orthovita has a strong presence among spinal and neurosurgeons, but a negligible one among interventional radiologists and neuroradiologists. The medical-device maker has had to shake up its sales force to address this dynamic.

It also won FDA approval to manufacture collagen at its own processing facility. Currently, Orthovita gets collagen from Kensey Nash, a deal that accounts for 15% of that company's $80 million in annual revenues. Orthovita says the new plant will give it greater quality control over a product that's crucial for its own offerings, including Vitagel, a bleeding control product used during surgery.

More than 300 CAPS members have rated Orthovita, and 97% of them believe it will outperform the market. You can add the medical-device specialist to your My Watchlist page and have all the Foolish news and analysis about this stock aggregated for you.

No assurance of growth
CAPS member bendlund initially believed China MediaExpress (Nasdaq: CCME) was a solid investment, but quickly became convinced that it had too many red flags to be trusted.

The company hosts advertising on China's city bus and subway networks, and it's claimed surprisingly strong margin expansion over the past year. Gross profits grew from 60.2% to 65.7% as revenue increased 52%. China Media Express believes they can expand further.

At the same time, VisionChina Media, a similarly situated advertising house, has suffered from margin contraction, as its expanding advertising network has forced its media costs to rise. Gross margins dropped from 60.5% to 49.4% last year, even as revenue rose 17%.

Of course, that's not nearly enough to prove anything. VisionChina, for example, doesn't have contracts with the subway system, and as CAPS members point out, China Media Express is audited by Big 4 auditor Deloitte.

VisionChina Media has its own adherents. iBelieveV says the advertising agency's move to outdoor advertising venues should help it grow:

[VisionChina Media] will benefit Shanghai Expo and Asia Games. It starts partnership with CCTV and will be the next outdoor moble ad [giant].

That will pit VisionChina against Focus Media (Nasdaq: FMCN), another operator of out-of-home advertising networks. You can advertise your opinion on the VisionChina Media CAPS page, and let us know whether one, two, or all three of these ad shops are worth spilling ink over.

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.