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 why, when our stocks go "on sale," 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 a pair of 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.
CAPS Rating(out of 5)
% Off 12-Month High
|Great Panther Silver (ASE: GPL)||****||55%|
|GeoEye (NAS: GEOY)||****||53%|
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 scratch-and-dent 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
Suffering from lower-grade ore and smelter issues at one of its metal traders, Great Panther Silver saw an 18% decrease in silver-equivalent-ounce production. But with newly discovered vein structures, its already published initial resource estimates of almost five million ounces of silver-equivalent at San Ignacio gives investors a taste of what is to come. The hiccup is analogous to that experienced by Brigus Gold (NYS: BRD) at its Black Fox mine and is one that it should readily overcome before resuming its previous productive ways.
The correction in silver prices has naturally impacted the results of all silver miners, but most rebounded smartly over the past month, with Great Panther being one of the best performers of the group. It's done even better than Endeavor Silver (ASE: EXK) despite the latter surpassing Panther's production volume in recent months.
With 96% of the CAPS members rating the silver miner to outperform the market indexes, tell us in the comments section below or on the Great Panther Silver CAPS page if you think it will overcome its stumbles and shine once again. Then go and add it to your Watchlist to check on its progress.
Eye in the sky
If the U.S. government is going to be cutting back defense spending, particularly in the Enhanced View program, where both GeoEye and DigitalGlobe (NYS: DGI) map the earth from their satellites, don't be surprised if they start looking elsewhere for work. GeoEye recently reported Russia contracted it to map the country in a multi-million-dollar contract, an interesting development since a Russian rocket just launched France's Pleiades-1 high-resolution imaging spacecraft, which has capabilities on par with those of GeoEye and DigitalGlobe.
Domestic government contracts accounted for two-thirds of GeoEye's revenues in 2010, so obviously any reduction in spending is a cause for concern. And with foreign government investments totaling another 26% of its business (leaving commercial lines at less than 10%), global austerity concerns are weighing on the stock.
GeoEye's advantage, however, is it also offers advanced processing capabilities derived from owning three airplanes equipped with advanced imaging technology. DigitalGlobe doesn't own any such aircraft.
Highly rated CAPS All-Star member TadpolesUS believes those advanced capabilities put it in the forefront of the industry that will continue to attract customers.
Satellite mapping has a bright future, and GEOY has been slammed by fears of a tight federal budget cutting into revenues. As the recent contract with Russia shows, there are a lot more customers out there than the U.S. government. Also, no matter how dire finances get in D.C., the intelligence agencies will get funding.
Tell us on the GeoEye CAPS page or in the comments section below if it's got its eye on the prize, then follow its progress by adding it to your Watchlist.
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. Although metals and mining may have upside potential, check out The Motley Fool's brand-new report, "The Motley Fool's Top Stock for 2012." It highlights a company that is revolutionizing commerce in Latin America. You can get instant access to the name of this company by clicking here -- it's free.
At the time this article was published Fool contributorRich Dupreyowns shares of Great Panther Silver, but he holds no other position in any company mentioned.Click hereto see his holdings and a short bio.Motley Fool newsletter serviceshave recommended buying shares of GeoEye. 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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