Scandal Stocks May Have Upside Shock

This column was originally published on RealMoney on July 25 at 4:29 p.m. EDT. It's being republished as a bonus for TheStreet.com readers.

After a getaway weekend with the boys, I feel broken. Temporary or terminal? Remains to be seen, but if history is any indication, I will be back stronger than ever.

Some companies suffer similar fates -- a rough patch that puts the stocks in the proverbial sick bay. Sometimes the short-term challenges are just too great.

I have three stocks for you today that have gone through their own versions of a weekend binge of scandalous behavior, but I believe they have the tenacity to make a strong comeback: Faro Technologies(FARO Quote), Merge Technologies (MRGE Quote) and Tier Technologies(TIER Quote)

I find music can soothe most ills, be they hangover- or market-related. While some might find comfort in gentle or calming sounds, nothing puts me back in the swing like some heavy rock 'n' roll, and nobody delivers more consistently than Dave Mustaine and Megadeth. Let's throw on a random shuffle of the albums "Peace Sells" and "The System has Failed" and give these companies the inspiration they need to reinvigorate their respective stock prices.

Faro Technologies makes computerized measurement and inspection systems that are used to produce exact specs for replacement parts, manufacturing quality control and reverse engineering. Applications for its products are diverse and sales growth has been impressive.

The trouble is, the company ran into some profitability issues, disappointing the Street several times. Allegations that its salespeople in China may have paid kickbacks to government officials and a patent dispute with rival Hexagon Metrology of Sweden conspired to take the company's shares from the low $30s in January 2005 to a 52-week low of $11.70 last month, when it looked as if it might be delisted by the Nasdaq. Since reporting first-quarter earnings on June 29, the shares have rebounded to $15, where I believe the company merits consideration as a longer-term investment.