By James BrumleyNEW YORK (
As it stands right now, LSI shares are priced at about nine times 2011's anticipated earnings, which is stunningly low by tech stock standards against that kind of growth. 4. Graphic Packaging Holding (GPK - Get Report) -- While most investors are thinking of the obvious ways to play the rebounding economy, the savvy way to play it may well be with a group that's too obvious to notice, like packaging, signage and printing companies. In fact, the profit of $0.08 per share Graphic Packaging Holding is expected to announce in early November would be a record-breaker for the company. Graphic Packaging Holding has already proven it's taking advantage of the recovery by swinging back to profitability five quarters ago, and staying there ever since. The year-over-year comparisons have been nice increases that entire time as well, with the biggest one yet slated with the third quarter's estimates. 5. Art Technology Group (ARTG) -- Trading at a little more than 18 times projected earnings for the next four quarters, one would be hard-pressed to say Art Technology Group is a "cheap" stock. On the other hand, you have to pay for quality and reliability, and this company definitely falls into that category. The company, in simplest terms, offers e-commerce solutions. Apparently it's a good business to be in. Though income was reeled in slightly during the early part of the recession, Art Technology Group never dipped into the red ink at any point in the past four years. How so? The nature of the business is heavy on recurring revenue; income growth comes from adding new customers/revenue streams. And now that the economy is on measurably firmer footing, new customers should be easier to find. Given 2011's earnings estimates of a record $0.24 per share, analysts seem to agree. Action to Take: There's a difference between "cheap" and "undervalued." Cheap stocks are on the low end of the price scale for a reason, so being priced under $5 doesn't mean you should ease up on your selection standards. These five names are undervalued, and also just happen to be trading under the $5 mark. That could change in a major way, however, over the course of the coming year (Read
Half-Off Stocks You Can't Afford to Ignore). This article originally appeared on StreetAuthority. To read more articles from James Brumleyon, you can visit this link. Disclosure: At the time of publication, James Brumley owned no positions in the stocks mentioned.
Become a fan of TheStreet on Facebook.