The world's top value investors love it when their best stock ideas are selling at bargain-basement prices. For those rarefied investors, companies offering fire-sale prices become no-brainer buys.
So regular investors like you and I would do well to emulate the masters and look at companies offering a "buy one-get one" sale on their stocks. We'll pair the companies selling at least 50% below their 52-week highs with the insights of the top investors in the Motley Fool CAPS community. When top earthbound investors also like a company's prospects, it may be wise for us to take notice too.
CAPS Rating (out of 5)
|Stillwater Mining (NYS: SWC)||****||51%|
|TriQuint Semiconductor (NAS: TQNT)||****||59%|
Source: Motley Fool CAPS.
Naturally, you'll want to do more due diligence before buying. Low-priced appliances in the dent-and-ding section of your home-remodeling superstore might be there for more reasons than just a few scratches on the surface: Real trouble might be lurking below. Same thing here, so make sure there's nothing seriously wrong with the company before you plug it into your portfolio.
Standard of excellence
The March retail sales headline numbers bode well for palladium miner Stillwater Mining, as they suggest consumers were out buying cars again. Palladium is a key component in auto catalytic converter systems, so any increase in sales by Ford, GM, and Chrysler will benefit Stillwater and industry peer North American Palladium.
Yet before you get too excited about the news, those Commerce Department numbers are at odds with what the car dealers themselves are reporting, with seasonally adjusted sales rate falling to 14.3 million units in March compared to 15.1 million units the month before. How can the government's numbers differ so much from reality? Because they're just sampling only a few thousand employers, not all of whom respond. Like the Bureau of Labor Statistics, which goes through accounting gymnastics to show unemployment rates lower than reason or reality dictates, the Commerce numbers should probably also be taken with a grain of salt.
Yet there are factors that could push palladium higher, such as a supply shortage in Russia. And if China's economy lands more softly than anticipated, auto demand could be strong enough to support greater sales. Stillwater still has the overhang from the rich premium it paid to get at gold deposits owned by Peregrine Metals, which is why I own NAP as opposed to Stillwater. Both stocks are still depressed, however, with Stillwater's stock down 43% from the year-ago period and NAP's down almost 59%.
Yet 93% of the CAPS members rating Stillwater believe it will outperform the market indexes, so add the palladium specialist to your watchlist and let us know on the Stillwater Mining CAPS page whether you think it will drive off to higher valuations.
No Apple a day
Is the Apple (NAS: AAPL) halo effect overblown? Certainly if you're looking at TriQuint Semiconductor it is. Whereas Apple's stock is 43% higher in 2012 (even after its recent pullback) and up 75% over the last 12 months, TriQuint's shares are only 16% more valuable since the start of the year but trade at less than half the level they did a year ago. Despite Apple being TriQuint's biggest customer, all those iPads and iPhones are not rubbing off.
Now I imagine if Apple dropped TriQuint's power amplification modules, its stock would fall even further. OmniVision Technologies (NAS: OVTI) suffered that fate when one of its image sensors in the iPhone was displaced in favor of those made by Sony. Yet even having worked its way back into Apple's good graces, its stock is still worth 58% less than it was last year. So investors would do well when determining an investment to discard any coattails effect from being an Apple partner.
CAPS member jorgepl believes that the fact that TriQuint's stock has been beaten up yet still offers attractive metrics means it should still come out a winner: "Its ROI is well above the market average as a percentage and it is in the highest-growing sector of the market. That and a low-point in its market valuation should make it an outperform stock this year."
Let us know on the TriQuint Semiconductor CAPS page or in the comments section below whether you think it will soon wear a halo, and add it to the Fool's free portfolio tracker to be notified of any changes to its status as an Apple adherent.
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. It's not just metal miners and tech shops that are setting the world on fire. Fool analysts think they've found a different kind of health-care company with plenty of upside. You can read about it in their new free report, "Discover the Next Rule-Breaking Multibagger." Get your copy for free by clicking here.
At the time this article was published Fool contributor Rich Duprey owns shares of North American Palladium and Apple, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of TriQuint Semiconductor and Ford Motor. The Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of General Motors, Ford Motor, and Apple. Motley Fool newsletter services have recommended creating a synthetic long position in Ford Motor and creating a bull call spread position in Apple. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.