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. Here you'll find three companies whose shares are selling at least 50% below their 52-week highs but that 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
E*TRADE Financial (NAS: ETFC)
TriQuint Semiconductor (NAS: TQNT)
Walter Energy (NYS: WLT)
Source: Motley Fool CAPS.
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.
Standard of excellence
As any stock watcher has noticed, the markets have been exceedingly volatile lately, swinging by 100-point margins regularly, sometimes on a daily basis. These better than 1% moves -- sometimes 2% or 3% -- wreak havoc on the stocks themselves, but there are those who do benefit from all the action: brokerages.
E*TRADE Financial reported increases in trading activity last month, with daily average revenue trades rising 3% from September and 9% from a year ago. It's also seeing a pick-up in new business, as it ended October with nearly 23,000 more accounts than it started with. Charles Schwab also saw increased activity, with DARTs 9% higher from September and 37% greater than a year ago, and opening 64,000 new accounts in the month. TD AMERITRADE (NAS: AMTD) had a good October as well.
Investor sentiment tends to get bullish as trading volumes grow, and CAPS member dbensou says that as the bad loans E*TRADE made years ago become a significantly smaller percentage of its portfolio it will exceed expectations: "They will continue to make money on trades while the bad loans wind down. Time is in their favor."
Add E*TRADE Financial to your watchlist and see whether it can continue to profit from the volatile mix of markets and financial mayhem.
How big is big?
Apple's coattails are getting a little threadbare, it seems. After analysts cut their expectations for iPad growth while simultaneously boosting forecasts for Amazon.com's (NAS: AMZN) Kindle Fire, a host of companies, including Cirrus Logic, OmniVision Technologies (NAS: OVTI) , and TriQuint Semiconductor, seemed to go down with it.
But maybe everyone overreacted just a little too much, a little too quickly. Analysts at Jefferies & Co. say sales aren't going to be as weak as the rest of Wall Street anticipates, if perhaps not as optimistic as Jefferies originally thought. Instead of the 13 million units the rest of the analyst community expects Apple to sell, Jeffries says it will be about a million units more, though that's well below the 17 million it had predicted previously.
That's still a ton of tablets, and with Apple poised to activate nearly 12 million iPhones of various models this Christmas, according to UBS analysts, the low valuations markets are assigning to its suppliers, particularly TriQuint, remain an opportunity. CAPS member eremmell spells out a list of reasons this chipmaker especially will lead the pack to growth.
Solid tech company, no debt, small cap. Business diversified between commercial and government contract. Partnership w/ Intel. Focus on R&D. Has own foundry. *NOT* based in Silicon Valley.
Tell us on the TriQuint Semiconductor CAPS page or in the comments section below if you agree, and then follow its progress by adding it to your watchlist.
Canary in a coal mine
Coal companies' earnings are giving off mixed signals. James River Coal showed a surprise loss this quarter, while Alpha Natural Resources (NYS: ANR) saw revenues double and profits beat expectations. Walter Energy missed estimates for the third quarter as sales jumped 49% but earnings dropped 44%.
There seems to be a general consensus, though, that if there's one strong thing holding them together, it's the long-term outlook for metallurgical coal from Asian countries. According to analysts at BHP Billiton, emerging economies like China's and India's are expected to account for more than two-thirds of global demand for metallurgical coal between now and 2025.
Walter Energy claims to be the biggest "pure play" in met coal and thus may represent the best opportunity to capture that growth. At just 7.5 times forward earnings estimates, and when factoring in analyst growth expectations, it's cheaper than many of its rivals. That single-minded focus by Walter has investors like CAPS member L0RDZ expecting someone like BHP to come along and buy it out.
With 95% of more than 1,500 CAPS members rating the coal miner to outperform the market, it seems they think it will thrive by itself regardless. Add Walter to the Fool's free portfolio tracker to see whether it's near an inflection point to capture greater growth ahead.
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. Weigh in with your own thoughts on which stocks you think can keep the dogs at bay.
At the time thisarticle was published Fool contributorRich Dupreyowns shares of Intel, but he holds no other position in any company mentioned. Check out hisholdings and a short bio. The Motley Fool owns shares of Cirrus Logic, Intel, Apple, and TriQuint Semiconductor, and has bought calls on Intel.Motley Fool newsletter serviceshave recommended buying shares of Walter Energy, Apple, Charles Schwab, Amazon.com, and Intel, as well as creating bull call spread positions on Apple and Intel. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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