Today we took a look at four stocks trading under $10. Here's our take on each. Please use our analysis as a starting point for your own research.
Campus Crest Communities, Inc (CCG) operates in the industry of REITs with a focus on student housing that includes building, managing and owning the student housing properties in the United States. With the recent announcement of two new properties in FY12-13 coupled with the strong second quarter results, CCG is getting analysts' attention these days. CCG enjoys a competitive advantage from internal general contractor and supply company that results in strong buying power and cost advantages. For the quarter ended June 30, 2011, Fund from operations (FFO) went up to $5.1 million or $0.17 per share from the FFO loss of $0.4 million in the corresponding period last year. As of August 1, 2011, the overall portfolio was leased 87.00% for the academic year 2011-12 up against the 81.20% in the same date last year. The company paid a dividend of $0.16 per share for the second quarter of FY 11. As on August 26, 2011, CCG stock closed at $11.35 with daily range of $10.93-$11.35 and highest appreciation of 2.99% among the peers. CCG stock is worth keeping an eye on for the short term considering the recent developments as well as the positive environment surrounding the REITs industry in general these days.
LSI Corporation (LSI) stands as a leading provider of innovative silicon and software technologies in the semiconductor industry with broad portfolio of capabilities and services. LSI stock is gaining momentum again after taking a dip in the last quarter, when institutional investors started selling an equivalent to 7.32% of the company’s 571.12 million share float. After a couple of rough days, the stock seems to pick up some momentum again with price appreciation of 1.96% at the day end on August 26, 2011.. The strong results of the second quarter of FY11 coupled with the recent launch of ‘MegaRAID Caching Software’ are helping to revive the lost confidence of investors in the stock. Secondly, the ability of the stock to perform according to the consensus estimates is what is putting LSI stock on the analyst radar. As a result, LSI stock is trading at a price to earnings ratio of 13.52. The one-time gain of selling the external business has helped the company to achieve earnings of $293.78 million for the quarter ended July 3, 2011 against $10.15 million in the first quarter of FY 11. The stock is recommended for the short term investors looking for positive return from capital gains.
Pacific Sunwear of California (PSUN) is among one of the top names in teen fashion providing a vast array of clothing line with over 800 stores in 50 states. PSUN may have posted a narrower than expected deficit during the second quarter of FY11 but with only 48.8% employed teens this year, it’s not surprising they are spending less on clothing. This is why investors seem to be running away from the teen retailers at the moment, as PSUN was included in the list of biggest price decliners for this week. The stock closed at $1.41 with a low trading volume of 1.22 million shares.
The third quarter outlook given by the company is probably adding fuel to the fire. PSUN predicted a gloomy outlook for the third quarter with loss of $0.18 per share against the consensus estimate of $0.06 as the company is facing a tough start to the back to school shopping period. Considering the news surrounding the teen retailers industry, it’s better to monitor the stock closely and a cautious stance is recommended to investors in this stock.
Hecla Mining Company (HL) is considered one of the lowest-cost primary silver producers, and is among the oldest precious metal mining companies in the U.S. It is safe to consider HL a shining star given the following: Soaring gold and silver prices coupled with a 5 year annual growth rate of 26.30% and the ability of the company to remain lowest cost producer in the industry with cash cost of just over $0.50 per ounce during the first quarter of FY11. With revenue growth of more than 72% during the first quarter of FY11 and with the improved operational efficiencies, the company has planned to boost its production by more than 50% in the next five years. The strong quarterly performance has doubled the EPS figure to $0.16 against $0.08 in the first quarter of FY 10. As of August 26, 2011, the stock closed at $7.68 with price appreciation of 4.50% and was among the biggest prices gainers at the beginning of the week when it rose by 6.80%. The above mentioned facts surely make HL worth keeping an eye on as evident from a price to earnings ratio of 27 and one year target fair value of $10.88, which represents upside potential of more than 30%.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.