The market correction has created a whole new batch of low priced stocks. Stocks that trade for just a few dollars or less per share can be very compelling investments as they can make very large percentage moves and possibly even double or triple in a short time period.
Part of this is due to the fact that volatile markets can create bargains in small cap stocks quite often since they do not have the trading volume or liquidity that is present in large cap stocks.
Here are a number of stocks that could see large gains if markets continue to rebound:
Mueller Water Products (NYSE:MWA) is trading at $2.15. Mueller Water Products makes and markets water infrastructure, flow control, and piping component systems for use in water distribution and water treatment facilities. These shares have a 52 week range of $1.94 and $4.80. The 50 day moving average is $3.14 and the 200 day moving average is $3.79, so these shares are trading well below support levels.
Estimates for MWA are for a loss of 4 cents in 2011, and profits of 18 cents per share in 2012. Book value is stated at $2.60. This stock appear due for a rebound soon and any signs of life could spark a major round of short covering.
MGIC Investment Corp. (NYSE:MTG) is trading around $2.13. MGIC is a surety and title insurance company and is based in Wisconsin. The 50 day moving average is $5.44 and the 200 day moving average is $8.11. These shares have traded in a range between $1.87 to $11.79 in the last 52 weeks. Earnings estimates for MTG are for a loss in 2011 and profit of 25 cents in 2012.
This stock has plunged and recently hit new 52 week lows over concerns that the housing crisis will continue to lead mortgage insurers like MTG into paying claims for the foreseeable future. This stock was trading around $8 several weeks ago and could easily rebound from these low levels if there is no major recession.
Keryx Biopharmaceuticals, Inc. (NASDAQ:KERX) is trading around $3.71. Keryx is a biotechnology company, based in New York. These shares have traded in a 52 week range between $3.03 to $5.91. The 50 day moving average is $4.31 and the 200 day moving average is $4.57. Earnings estimates for KERX are for a loss of 38 cents per share for 2011 and loss of 34 cents for 2012.
This company has two candidates "Perifosine" for multiple myeloma and colorectal cancer and "Zerenex" which targets hyperphosphatemia in patients with end-stage renal disease, both of which are currently in phase 3 trials. Some positive news from the company could get this stock back towards the 52 week high.
Denison Mines Corp. (NYSEMKT:DNN) is trading at $1.44 today. Denison is a uranium mining company, and is based in Canada. The 50 day moving average is $1.80 and the 200 day moving average is $2.64. These shares traded between $1.32 and $4.52 in the past 52 weeks. The book value is $2.20 per share so these shares are cheap based on that metric. Denison has nearly $100 million in cash, you can see that and the book value data here.
Denison stock dropped along with all uranium stocks when the Japan quake turned into a nuclear disaster. At barely over $1.40 per share, this stock could be close to a bottom however, the spot price of uranium probably needs to rebound for this stock to make a big move up.
Antares Pharma Inc., (AIS) is trading around $2.40. Antares is a biotechnology company, based in New Jersey. These shares have traded in a 52 week range between $1.32 to $2.65. The 50 day moving average is $2.22 and the 200 day moving average is $1.79. Earnings estimates for AIS are for a loss of 4 cents per share for 2011 and profit of 18 cents for 2012.
Antares recently announced that the FDA has agreed to review its application to market Anturol Gel as a treatment for overactive bladder, and expects to make a decision by early December. This stock has been performing well in the market correction and could be ready to hit new 52 week highs as markets rebound.
General Steel Holdings, Inc., (NYSE:GSI) shares are trading at $1.52. GSI is a manufacturer of steel products, based in China. These shares have traded in a range between $1.11 to $3.15 in the last 52 weeks. The 50 day moving average is $1.48 and the 200 day moving average is $2.14.
The stock trades just slightly over the book value which is currently stated at $1.82. With Asian economies booming and Japan rebuilding the country due to the earthquake damage, demand for steel should boost revenues for GSI.
Sirius XM Radio (NASDAQ:SIRI) shares are trading at $1.75. Sirius is the leading satellite radio company. Earnings estimates indicate a profit of 7 cents per share for 2011 and 8 cents for 2012. The 50 day moving average is $2.03 and the 200 day moving average is $1.82.
There is at least one event that could cause Sirius shares to just about double from current levels and that is a buyout from a larger media company. However, the stock might remain under pressure until investors get more clarity on whether the economy is heading for a recession.
The data is sourced from Yahoo Finance and Stockcharts.com. The information and data is believed to be accurate, but no guarantees or representations are made.
Disclosure: I am long MWA.
Disclaimer: Rougemont is not a registered investment advisor and does not provide specific investment advice. The information contained herein is for informational purposes only.