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5 Stocks Under $10 That Probably Won't Double in 2012

Don't expect Sprint (S) or Sirius XM (SIRI - Get Report) to double anytime soon, particularly in 2012.

I have said all I care to say about SIRI, but I could not let one of the best points made to date about the prospects of that stock doubling pass. In The Option to Make Bank is Available With Sirius XM TheStreet's Robert Weinstein made the point that rarely gets made, but should probably qualify every discussion of stocks such as SIRI:

The ability for Sprint to double is much easier with a smaller float and market cap relative to revenue. Sprint has 20% fewer shares and 10 times Sirius's $3.1 billion revenue. Increasing the bottom line number is obviously much greater with Sprint than Sirius.
You don't need to double your money to make an investment a decent one. Both Sprint and Sirius offer the ability to profit. I believe the best way toward profits with Sprint and Sirius is through options. Friday's closing price of $1.85 or less is a buying opportunity with Sirius.

Read Robert's article to find out how to use options with these two low-priced stocks.

The key takeaway for me, however, is "You don't need to double your money to make an investment a decent one." Wise words.

And Robert doesn't play around. Since his article, SIRI has returned 13%. He's been advocating bullish options plays with S for weeks in our Options Investing Newsletter. That stock, of course, is up roughly 20% over the last three months.

Even with this upside, Robert advocates more conservative approaches to both stocks via options (yes, you can actually decrease your risk exposure when using options).

At day's end, it's all about having been around the block a few times. The this or that stock will double this year crowd shows off a rudimentary and incredibly dangerous grasp of the stock market. You'll get burned by the touts they run through their assembly lines.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

At the time of publication, the author was long NOK.
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SYM TRADE IT LAST %CHG
F $15.26 -0.42%
NOK $7.34 -0.20%
SIRI $3.84 -1.70%
S $4.65 -1.50%
AAPL $131.49 -0.42%

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S&P 500 2,114.31 -9.17 -0.43%
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