When a company's shares fall into penny-stock territory, the chances of ever recovering are typically very slim. Yet a handful of companies have proved that it's possible to come back from the abyss.

Telecom-equipment giants Nortel ( NT) and Lucent ( LU) both fell below a buck a share last year and then bounced back to more than $2 apiece. Energy trader Dynegy ( DYN) also slid below the $1 mark last year, only to rally back to about $5.

In a particularly stunning turnaround, Ask Jeeves ( ASKJ) went from a low of 86 cents last July to more than $13 now.

So how did these companies do it?

"Our general sense is that the characteristics apply differently to them than to the smaller-cap stocks," said Jim Kuster, managing director at Crest Advisors. "Large-cap stocks generally have more resources to get themselves out and more strategies that they can employ."

Such gains are pretty remarkable, given that the survival rate for stocks that fall below $1 is usually very low. According to a study conducted by Crest Advisors, 82% of stocks that fall into this category never move higher than $1 again, and many just discontinue trading.

The trend makes sense. After all, when stocks start trading for pennies, analysts often drop coverage, institutions dump their shares and liquidity begins to dry up. Still, this isn't what happened with Lucent, Nortel, Dynegy and Ask Jeeves. All four of these stocks continue to have a high level of institutional ownership.

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