The occasional shower of pennies from heaven might do our bank accounts some good, but we Fools can't say the same for penny stocks. The world of penny stocks is often full of manipulation and deceit, making it harder for investors to separate its few good offerings from the multitude best ignored.
Still, many investors dabble at the low end of the stock-price spectrum. At Motley Fool CAPS, we award the "Pennies" title to investors who rate stocks trading in the single digits more than half the time. Believe it or not, you'll find some of the best CAPS All-Stars among those members.
Pinching pennies
This week, we'll look at some of the low-priced investments these All-Stars have praised. If some of the best investors regularly scanning this end of the market have singled out these companies, we might want to turn our umbrellas upside-down -- or run for cover!
Here's the latest list of low-priced stocks with All-Star support:
|
Company |
Price* |
CAPS Member |
||
|---|---|---|---|---|
|
Clean Energy Fuels |
$6.24 |
**** |
99.99 |
|
|
Harmonic |
$6.68 |
**** |
99.94 |
|
|
US Airways |
$9.94 |
* |
99.83 |
|
|
StealthGas |
$7.41 |
**** |
99.64 |
|
|
Discovery Labs |
$1.77 |
** |
99.26 |
*Price when the outperform call was made.
Your two cents' worth
It certainly helps that one of the factors pressuring the airline industry -- namely, oil prices -- has been in full retreat recently. That's given carriers like US Airways some breathing room. With capacity cuts eliminating excess seats in a down economy and Delta
CAPS All-Star rexlove thinks it's a temporary situation as the recession continues to eat away at spending.
Airline stocks doing unusually good recently. Sure-oil prices are down-but now we have a recession going on. All business and personal travel has to be down big time.
Politics plays a large role in where investors stand on Clean Energy Fuels, the T. Boone Pickens company pushing natural-gas cars -- half of the billionaire's plan to wean this country off its foreign fuel dependence. Yet natural gas prices are declining and producers like Devon Energy
CAPS member fmahnke sees Clean Energy Fuels as a good long-term investment.
Great long-term investment has finally dropped to reasonable level after the failure of CA [proposition] 10. Natural Gas Power vehicles could be a bargaining chip for current administration to pump cash into the BIG 3. Strong balance sheet. This would be a good idea even if [House Speaker Nancy] Pelosi wasn't a … large shareholder as the Natural Gas play on alternative energy is [the] lost logical path to reducing [foreign oil dependence].
Riding the bear is All-Star member georgialax, who says the company is solely relying on greater government involvement.
If you are betting on this company you are making a bet on "big government". [Clean Energy Fuels] can't turn a profit without massive government handouts, land grabs, and regulations. Look at the contracts that the company has gotten so far. By and large they are all government contracts. What does this mean? Well it means that if you are a business with a big heart and limitless funds you can invest in Natural Gas vehicles. Only government (which doesn't have to worry about [profits]) can buy into something that has no economic return value. There has been no value for private companies to buy into the technology because it doesn't increase financial returns. The public is in no mood for any new company government subsidies at a time that oil is plummeting and the new technologies are unproven.
You can read the full pitch against Clean Energy Fuels on its CAPS page.
Make some change
What do you think? Should we fill up the change jar with these penny stocks, or ignore 'em like a discarded coin on the street? 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.
