10 Top Stocks Under $5 for 2012 Picked by Analysts

5. U.S. Airways Group (LCC)

Company Profile: U.S. Airways Group is the holding company for U.S. Airways, one of the largest airline operators in the U.S.

Share Price: $4.90 (Dec. 2)

2011 Stock Performance: -51%

Analyst Consensus: Like MEMC, U.S. Airways shares traded above $10 to begin 2011. But like nearly every other airline stock this year, U.S. Airways shares have crash landed. While the bankruptcy of AMR Corp. (AMR) has been beneficial to investors in U.S. Airways and others, rising crude prices and shrinking profits have crushed airline stocks all year long.

Analysts are still bullish on the future of U.S. Airways with 9 analysts, or 60% of those following the stock, recommending that investors buy the stock. The average price target of $10.18 means that researchers expect the stock to more than double over the next 12 months.

Bullish Case: After U.S. Airways reported quarterly numbers in October, Deutsche Bank analyst Michael Linenberg reiterated a "buy" call on the stock with a price target of $12, noting the company's improved forecast and revenue strength.

"We believe that US Airways (and the industry) seems to have right sized its operation to a point where it can exert pricing power even in a slow growth economy characterized by high fuel prices," Linenberg wrote in the Oct. 28 research report.

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4. Hercules Offshore (HERO)

Company Profile: Hercules Offshore is a provider of shallow-water drilling and marine services to the oil and natural gas exploration and production industry.

Share Price: $4.03 (Dec. 2)

2011 Stock Performance: 15.8%

Analyst Consensus: Like Sirius XM, Hercules Offshore shares had a nice run in 2011. The stock surged in February after the company announced that it would acquire nearly all of Seahawk Drilling's assets for $105 million in cash and stock. However, shares pared those gains in September after Hercules Offshore announced it had increased its stake in Discovery Offshore to more than $34 million.

For the most part, analysts like Hercules Offshore, with the stock garnering 10 "buy" ratings out of 24 researchers covering the stock. The average price target of $4.88 would mean an increase of 21% from current levels.

Bullish Case: Credit Suisse analyst Brad Handler is optimistic on Hercules Offshore as the Gulf of Mexico market heats up. He has a target price of $6.50, well above the average analyst price target.

"We believe continued day-rate and contracting momentum in the Gulf of Mexico should drive a limited number of reactivations by mid-2012, supporting positive share price performance on a relative basis provided macro concerns remain 'eased' on a go-forward basis," Handler wrote in an Oct. 28 research report.

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