When stocks fall fast and far, they sometimes set themselves up for remarkable rebounds. The following equities suffered dramatic drops over the past week. With help from the 170,000 members of Motley Fool CAPS, we'll see whether any of them have the potential to bounce back:
How far from 52-week high?
(out of 5)
Companies are selected by screening on finviz.com for abrupt 5% or greater price drops over the past week. 52-week high and recent price data provided by finviz.com. CAPS ratings from Motley Fool CAPS.
Five super falls -- one superball
There's no two ways about it. If you owned any of the five stocks named above last week, you're significantly poorer for it today. So what went wrong?
Beginning at the bottom, DryShips got off to a rocky start last week when Goldman Sachs reduced its price target on the stock. Things didn't improve on Wednesday, when Jim Cramer came out with a "sell" rating on the stock. By that point, it didn't seem to matter that the only real news at DryShips last week was of the positive sort -- DryShips secured a contract extension on one of its drillships, helping to validate the company's move into oil drilling.
Bad news was similarly absent at stem cell researcher Geron. The company announced a minor management reshuffle Thursday. Hardly earth-shattering news, yet the stock lost 6% on the week regardless.
In contrast, the drops at LDK and JA Solar (respectively) appear to have more to 'em. Evergreen
Perhaps the best "on-sale" stock out there, though, is also the highest-rated on today's list. Superior Industries had a rough time of things when it reported disappointing earnings, sure -- but that was more than two weeks ago. Isn't it about time for the stock to stop dropping? Mightn't it be time for Superior to … bounce?
The bull case for Superior Industries
All-Star investor CellBlock9 thinks so, pointing out that in addition to its five-star CAPS rating, Superior is also an "S&P 5 star" with a "2.65 dividend." (Actually, as of today the dividend yield has climbed to 3%.)
Fellow All-Star yooperking says this is the "highest yielding stock … of the Auto Parts Industry stocks in Value Line. The dividend is almost a rock solid guarantee since the company has absolutely no debt."
Indeed, according to yet another of our All-Stars -- debjoymax54 -- this time, Superior is actually a "sounder investment in the American Auto industry than the Main Auto Makers" themselves.
Speaking of which, Superior supplies aluminum wheels to pretty much everyone who's anyone in car manufacturing today. Ford
Foolish final thought
Seems to me, too, that Superior is a bargain-priced way to participate in that success. The stock only costs 11 times earnings, after all, and is even cheaper when valued on its free cash flow. The dividend, as our Foolish contributors up above have pointed out, is both generous and rock solid. Best of all -- no one on Wall Street seems to have any clue how good this story is. Only a handful of analysts follow Superior at all, and even these folks don't seem to be paying close attention. Consensus estimates on the company, as reported by Yahoo!, suggest Superior is going to see its profits drop 72% a year, every year, for the next five years -- a prediction I think simply ludicrous.
Value-priced, dividend-rich, and sporting a trunkload of cash (with no debt whatsoever), Superior Industries gets my vote as this week's most bounce-able stock. In fact, I'm so convinced of the investing case on this one that I'm going to head over to CAPS right now and recommend the stock officially.
Want to bet I'm wrong? Click over to Motley Fool CAPS now, and tell us what you think about Superior Industries.
Motley Fool CAPS: It's fun, it's free, and it just might make you famous.