Five 'Under $2 Stocks' to Watch

Fannie Mae (FNM): Currently has very little short interest opposing very strong bullish sentiment. Stock ran straight up, uncontested, from 30 cents on Friday, November 21, 2008, to close at $1.16 on Friday, November 28, 2008 - almost a 4-bagger. A reverse-split is in the offing to an over-$5/share price, particularly to attract institutional investors (who don't invest below this cut-off); however, there is little chance of any such reverse-split unless/until the company is returned to private status. Otherwise, the stock must stay above $1/share for 30 consecutive trading days. FNM has until May 11, 2009 to cure this deficiency. It could easily ramp up over $2.00 if the market continues to rebound.

RF Microdevices (RFMD): RFMD was recently crushed along with the broad market sell-off and stands to rebound in a big way if the broad market ramps up again. The stock has some short-seller resistance. The company has no bad news or financials that would hold stock back. Its primary customers are Nokia (NOK), Samsung and, to a lessening-degree, Motorola (MOT). The stock could pop back over $2.00-$2.30 if techs continue rebound.

Tenet Healthcare (THC): This stock was overly punished in the recent broad market sell-off. It can easily rebound back to the $2.40 range again if the broad market continues to rebound.

Pilgram's Pride (PPC): Today is put-up or shut-up day as far as this mega-chicken producer is concerned. PPC is facing potential bankruptcy and received an extension through December 1, 2008 to deal with various credit issues with lenders. In anticipation that PPC would resolve said issues, the stock ran up from 30c to a high of $1.48 last week before sliding back to $1.15 at Friday's close.

Nortel Networks (NT): Despite majorly-negative sentiment surrounding NT - including calls that the company could break up or become insolvent - NT seems to be the company with nine lives. If the broad market ramps up, keep an eye on this stock to run. It is a straggler- but may eventually bump in a big way.

Disclosure: As of the date of this blog-post, I don't currently own any of these stocks. However, I may own one or more of them shortly. My views above are not recommendations to buy these stocks, rather personal views on their potential.