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by Darnell Brown

This article will evaluate the investment potential of 6 stocks that have been trading for under $5.00.

Sirius XM Radio (NASDAQ:SIRI) has a market cap of $6.56 billion with a price to earnings ratio of 42.68. The stock has traded in a 52 week range of between $1.03 and $2.44. The current stock price is $1.75. The company reported second quarter revenues of $744 million compared to revenues of $700 million for the second quarter of 2010. Second quarter net income was $173 million compared to net income of $15.3 million in the second quarter of 2010.

One competitor of Sirius XM is Westwood One Inc. (NASDAQ:WWON). Westwood One is currently trading at $4.21 and has a market cap of $95.15 million. The stock of Westwood One is down by -39.8% over the last 52 weeks, compared to the stock of Sirius XM, which is up 66.6% over the last 52 weeks.

Sirius XM has shown a remarkable increase over the last two years. In 2010 net income increased to $43.1 million from $-529 million in 2009. In the last quarter, net income increased by 121%. The company will see greater success in four months when it will be able to raise subscription rates. In addition to the increase in earnings, there have been rumors that the company may be acquired by Liberty Media (LCAPA) or Research in Motion (RIMM). The stock price has increased in tandem with the earnings increase and acquisition rumors. I believe that the stock price will continue to climb higher. I rate Sirius XM Radio as a buy.

Quepasa Corporation (QPSA) has a market cap of $75.01 million, with a negative price to earnings ratio. The stock has traded in a 52 week range of between $3.80 and $15.45. The current stock price is $4.50. The company reported second quarter revenues of $1.84 million compared to revenues of $1.16 million in the second quarter of 2010. Second quarter net income was $-2.32 million compared to net income of $-1.91 million for the second quarter of 2010. Year over Year the company reported net income of $-6.6 in 2010 compared to net income of $-10.5 million.

Quepasa is a Latino Internet social networking company that competes with companies like AOL Inc. (NYSE:AOL). AOL is currently trading at $15.54 and has a market cap of $1.66 billion with a price to earnings ratio of 7.19.

Quepasa has been able to grow revenue but one of the consequences of its revenue growth has been increased losses. The company has lost money every year for the past decade. The stock price is 70.9% off of its 52 week high.

Cemex S.A. (NYSE:CX) has a market cap of $5.47 billion, with a negative price to earnings ratio. The stock has traded in a 52 week range of between $4.81 and $11.15. The current stock price is $5.25. In 2010, this company had revenues of $14.5 billion compared to revenues of $15.2 billion in 2009. In 2010, the net income was $-1.34 billion compared to net income of $108 million in 2009. In the first quarter of 2011, the company reported revenues of $3.42 billion, with net income of $-279 million.

Cemex is a producer of cement products and one of its competitors is Lafarge ADS (OTCPK:LFRGY). Lafarge is currently trading at $9.27 and has a market cap of $10.61 billion with a price to earnings ratio of 10.83.

Cemex is a company that has suffered from the worldwide economic slowdown. The company’s net income has decreased in each of the last three years. The sales growth over the last three years is -14%. As a result of the poor earnings reports, the stock is 51% off of its 52 week high.

China Cast Education Corporation (OTCPK:CAST) has a market cap of $219.46 with a price to earnings ratio of 16.65. The stock has traded in a 52 week range of between $4.09 and $7.99. The current stock price is $4.48. The company reported second quarter revenues of $26.1 million, compared to revenues of $16.3 million in the second quarter of 2010. Second quarter net income was $6.48 million compared to the second quarter net income of $4.48 million.

China Cast competes against China Education Corporation (NASDAQ:CEDU). China Education is currently trading at $5.80 and has a market cap of $92.28 million with a price to earnings ratio of 17.90.

China Cast Education has been a profitable company for years. Over the last five years, the company’s net income has increased by 330%, and last quarter its earnings per share grew by 38%. China Cast is the only U.S. listed company that grants accredited degrees in China. In spite of the company’s terrific earnings growth, the stock price has suffered. The stock is 43.9% off of its 52 week high. I think that China Cast is a strong growth company in a fast growing market. The stock price should increase if earnings continue to grow. I rate China Cast Education Corporation as a buy.

Tenet Healthcare Corporation (NYSE:THC) has a market cap of $2.46 billion with a price to earnings ratio of $2.53. The stock has traded in a 52 week range of between $3.96 and $7.70. The current stock price is $5.20. The company reported second quarter revenues of $2.37 billion compared to revenues of $2.30 billion for the second quarter of 2010. Second quarter net income was $55 million compared to net income of $25 million in the second quarter of 2010.

One of Tenet Healthcare’s primary competitors is Healthcare Holdings Inc. (NYSE:HCA). Healthcare Holdings is currently trading at $19.05 and has a market cap of $9.85 billion with a price to earnings ratio of 8.96

Tenet Healthcare has significantly increased profits over the last three years, from net income of $25 million in 2008 to net income of $1.12 billion in 2010. In the last quarter, earnings per share grew by 29%. It seems that Tenet Healthcare has made a terrific financial turnaround. The stock price is up by 17.65% over the last 52 weeks. I believe that the stock price will continue to rise, and with a price to earnings ratio of only 2.53 this stock is dirt cheap. I rate Tenet Healthcare Corporation as a buy.

GMX Resources Inc. (GMXR) has a market cap of $151.63 million with a negative price to earnings ratio. The stock has traded in a 52 week range of between $2.38 and $6.48. The current stock price is $2.61. The company reported second quarter revenues of 32.9 million compared to revenues of $23.2 million for the second quarter of 2010. Second quarter net income was $-15.4 million compared to net income of $-2.98 million in the second quarter of 2010.

One of GMX Resources' competitors is Cabot Oil & Gas Corporation (NYSE:COG). Cabot is currently trading at $72.69 and has a market cap of $7.61 billion with a price to earnings ratio of 63.67.

GMX Resources has lost money in each of the last three years. The company's 3 year earnings growth rate is -63%. The company’s last quarter earnings per share was -130%. The stock prices of oil and gas exploration companies have generally been doing pretty well, but GMX Resources' stock price has performed poorly. The stock price is 60% off of its 52 week high and down by 42.2% over the last 52 weeks.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 6 Buy Ideas Trading Under $5