NEW YORK (TheStreet) - I define stocks that qualify as stocking stuffers as those with a buy rating according to www.ValuEngine.com, are more than 20% undervalued, have an average daily trading volume of at least 200,000 shares and projected to gain at least 7.5% over the next 12 months. Headlining this screening are Advanced Micro Devices (AMD) and Alaska Communications (ALSK) along with seven others.
I never profile a penny stock as these stocks trade below a buck a share and they do so for a reason.
I consider stocks trading between a buck a share and $3 a share as 'options on survival' if they have a buy rating according to ValuEngine. When you buy the stock within this price range you have the risk that it may become worthless vs. the possibility that the stock price could double, triple or more in price.
When a stock is trading below $5 a share individuals cannot buy that company on margin. Three of the stocks in today's post trade between $3 and $5 so these stocks have a higher cost for that 'option on survival.'
If you buy a stock considered an 'option on survival' consider it a Christmas stocking stuffer and look at it a year from now to see if you made money, but beware that the risk is that the stock has become a lump of coal.
My buy-and-trade profiles are based upon fundamental data that determines ratings and valuations including 12 month trailing earnings per share, 12 month forward estimates of earnings per share and on the yield on the Treasury 30-Year bond. ValuEngine can not anticipate positive or negative company specific events which can affect the performance of low-priced stocks particularly among biotech companies.
Alterna Zentars (AEZS)($1.20) is a biotech company focusing on treatments for prostate issues for men and ovarian issues for women. The stock has a buy rating is 75% undervalued and is down 47.9% over the last 12 months and is below its 200-day simple moving average at $1.53. This stock recently declined from $1.74 on Nov. 15 to 99 cents on Nov. 20. My weekly value level is $1.11 with a month pivot at $1.18 and semiannual and quarterly risky levels at $1.39 and $1.60.
Alaska Communications ($2.17) provides local telephone, wireless and Internet services to subscribers in Alaska. The stock has a buy rating is 39.5% undervalued with a gain of 6.9% over the last 12 months and is just below its 200-day SMA at $2.21. This stock traded as high as $3.90 on August 8 and was above $16 in mid-2007. This week's value level is $1.80 with a monthly risky level at $2.74.