- The company is awful and might even be a scam; or
- Wall Street, as it is prone to do, has overdone the selloff, and now the stock's ready for a rebound.
|Whole Foods Market (WFMI) |
So the market has essentially assumed zero growth on Whole Foods. Any upside from that is a home run. Another company near its 52-week lows is Caterpillar ( CAT).
|Caterpillar (CAT) |
With home sales and construction down, everyone assumes Caterpillar will bear the brunt, with lower sales of tractors and construction equipment. Meanwhile, commercial construction is up, and the company sells equipment to the mining industry, which is benefiting from higher oil prices. Caterpillar trades at only 10 times next year's earnings and has a dividend of 2%, so investors will get paid while they wait. (For a contrarian view, investment guru Ken Fisher disagrees.) Additionally, take a look at the portfolio for the TheStreet.com Ratings team's best stocks for 2007, which offers the reasons why each pick is included. The Ratings team includes Caterpillar in its Stockpickr portfolio. At 10 times next year's earnings, it's hard to see this company going much lower without someone mulling the largest leveraged buyout in history. Motorola ( MOT) is another stock that has caved in recently.
|Motorola (MOT) |
Wall Street is worried about increased competition for Motorola's pride and joy, the Razr phone, not only from Nokia ( NOK), which is enjoying nice growth off of some of its recently released products, but also from Apple's ( AAPL) upcoming iPhone. However, it's worth noting that the Razr had a record quarter, even if CEO Edward Zander said he was disappointed in it on the recent Motorola earnings call. It's also worth noting that Motorola's home-solutions business, which sells set-top boxes and DVR players, is only 8% of Motorola's sales right now. That number will be much higher as unit sales of DVRs and set-top boxes worldwide more than double over the next four years. Motorola is also gaining market share in China and India in the wireless handset business. Bottom-fisher Prince Al-Waleed owns shares of Motorola, as does the Goldman Sachs Large Cap Value Fund. Check out the full list of S&P 500 stocks trading near their 52-week lows. Also, to participate in or just view the debate on buying 52-week lows vs. 52-week highs, check out the Stockpickr forum. Stockpickr tip of the day: Don't forget to check out the Barron's roundup we plan to post each Sunday in our blog. We present, in the Stockpickr format, portfolios relating to the top stories in Barron's, the list of stocks being pursued by activist hedge funds, the list of stocks (with additional color that we provide) that make up the top insider purchases, and the portfolios of the top funds mentioned in Barron's. Here is the latest edition of the Barron's roundup, which includes the recommended picks of various Barron's roundtable members such as Marc Faber.