Investing
Stockpickr: The Top NYSE Stocks Under $5
01/16/07 - 08:35 AM EST
In 2003, Tim Melvin, the co-author of recent bestseller The Little Book of Value Investing with Christopher Browne from Tweedy Browne, told me about a system he tested for 2002. At the beginning of every month, buy every stock below $3 on the NYSE. Sell at the end of the month and begin again. "The result," he told me, "was an over 200% return for 2002, the worst year in 30 years in the market." I was impressed by this and have done various confirming tests since then, including a chapter on stocks below $5 in my book, Trade Like a Hedge Fund. On Stockpickr, every month (actually, every few days) we are updating the list: All NYSE Stocks that are trading below $5. These stocks are profitable and have analysts with a buy recommendation. Then, when you look at the portfolio you can quickly see what hedge funds and super investors also own the stocks. These companies require a little more study than most because they are below $5 for a reason. That said, the potential for gain, and even for safety (as the Tim Melvin example attests) is enormous. For instance, SolectronSLR currently trades at $3.43, so it is on the list. A big electronics company that just designed a new device can outsource all the manufacturing to Solectron. The company is sitting on $1.04 billion in cash and has $641 million in debt, so there is almost $400 million net cash in the bank. With a market cap of $3.1 billion and Ebitda of $334 million, Solectron's multiple over cash flows is just 8 times, putting it in buyout territory. SLR is also increasing earnings.
The five stocks to follow this year reflect challenges that already have emerged.
The highlights from our bloggers: Cramer, Rev Shark, Willard, Smith and Crescenzi.
All the links that are fit to click.
Yahoo! is among the most searched stocks on TheStreet.com. Here's what Cramer had to say about the stock recently.
Catch up on his thinking on the hottest topics of the past week.
Investors will have to deal with a Fed meeting and another flood of earnings and economic data.
Ensco International and Echelon have the potential to move higher in coming days.
See who made what calls.
The addition of video is helping telecom companies compete against cable and satellite companies.
The June West Texas Intermediate contract reflects selling pressure ahead of Tuesday's expiration. But stocks in the sector are generally trading higher.
See who made what calls.
Keep on top of the market and the critical information you need to make more profitable investing decisions.
Sponsored by:

ACCESS REALMONEY


