Stockpickr: The Top NYSE Stocks Under $5
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, Solectron (SLR) 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.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV