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.

Stock

CAPS Rating (out of 5)

% Off 12-Month High

American Oriental Bioengineering (NYSE: AOB)

****

54%

CDC Software (Nasdaq: CDCS)

*****

50%

China Natural Gas (Nasdaq: CHNG)

****

59%

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 a disturbing string of fraud allegations at Chinese companies, the SEC is launching an investigation into them and their auditors. China Sky One Medical, Fuqi International (Nasdaq: FUQI), and the now-delisted RINO International all had one thing in common: They were brought to the public markets via a reverse merger.

China Natural Gas also came under suspicion for failing to disclose that it was in violation of loan covenants setting it up for a default of the agreements leading it to restate its financials. Like Clean Energy Fuels (Nasdaq: CLNE) here at home, China Natural Gas is building a series of natural gas fueling stations in its home country, but it, too, was created by reverse merger and remains under a cloud.

In a reverse merger, a private company buys up a publicly traded shell company -- typically defunct in all but name only -- and thus gains access to investor money.

Not all reverse mergers are schemes to defraud investors. When NYSE Euronext (NYSE: NYX) merged with Archipelago Holdings, it did so through a reverse merger. Plenty of Chinese companies have done so legitimately as well.

Although questions have been raised over the years about various practices it's used, traditional Chinese medicine outfit American Oriental Bioengineering came to the public markets via reverse merger in 2002. Yet the SEC probe should be a wakeup call to investors that they'll need more caution when stepping into this minefield. The trepidation with which investors increasingly hold Chinese small cap stocks, has essentially left AOB for dead.

Still, the CAPS community has stubbornly hung on, and 97% of those rating the firm think it can still outperform the market. Perhaps tellingly, two-thirds of the analysts picking the stock agree. Let us know on the American Oriental Bioengineering CAPS page whether it's got the right medicine to cure itself.

A reserve player
A subsidiary of Chinese software maker CDC Software stands accused of a different sort of alleged wrongdoing. Sunshine Mills, a U.S.-based pet food supplier, said CDC division Ross Systems had sold it software that purportedly would help it slash warehousing and distribution costs by 50%. Instead, the software caused the company to ship customers the wrong product, and failed to generate invoices. A jury awarded Sunshine $61 million -- a pretty sizeable award, considering that software only cost $235,000.

When the verdict was announced, CDC Software's shares plunged 15%. Ross, though, said it plans to appeal, since national and global customers use the software without any problems. Furthermore, not only does Sunshine still use the software -- and did so for five years before filing the lawsuit -- but it's purchased Ross's services since to help with its operations.

The ability of software to live up to promises made about its capabilities has been a source of increased litigation in recent years. SAP and Waste Management (NYSE: WM) settled a similar lawsuit earlier this year after Waste Management said SAP's software was a "complete and utter failure."

The market's reaction to the Ross lawsuit seems overblown to many investors. CAPS member jlanganki thinks the award was ridiculously high, and pchop123 says the stock is oversold.

Only you can decide, however, whether CDC is right for your portfolio. Add the software firm to Fool.com's free portfolio tracker.

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.

Waste Management is a Motley Fool Inside Value selection. NYSE Euronext is a Motley Fool Rule Breakers pick. Waste Management is a Motley Fool Income Investor choice. Motley Fool Options has recommended a write covered straddle position on Waste Management. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Rich Duprey does not have a financial position in any of the other stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.