Here are five well-diversified stocks that television investment guru Jim Cramer recommends with some interesting prospects for you to consider.
Zipcar Inc. (ZIP): This stock could be the latest play on going green. Zipcar is a car sharing network that, in ten years, has grown to over 600,000 members, spread over 13 major metropolitan areas and on more than 150 college campuses. In metropolitan areas and on campuses, as well as in government where green has become the social norm, Zipcar is filling demand for an alternative to the high-cost of car ownership and lack of parking. Not only is the company inherently ‘cool’, Zipcar for business consists of a fleet management solution to organizations that manage their own fleet of vehicles using a state-of-the-art Software as a service (SaaS) platform.
Trading at $30 a share before its initial public offering in April, steady selling pressure has brought it down to a very reasonable $17 a share, also down from its initial offering price of $18. There are no major car rental companies that offer quite the same service yet, but with the growing expense of car ownership and the trend towards a more green lifestyle, Zipcar could have found a niche that will put them ahead of any future competition.
Westport Innovations Inc (WPRT): While the Dow was at its fifty-two week low, Westport Innovations is at its fifty-two week high. What exactly is it with this stock that keeps it afloat when all other ships seem to be sinking? Westport Innovations is a company that engineers automobile engines that run on natural gas. While the business is arguably green, its profits have been quite red over the last few periods.
Westport's chief executive recently got together with Royal Dutch Shell (RDS.A) in a joint marketing agreement and stated that the use of natural gas as a fuel for transportation would accelerate. But a lot more exciting is the congressional action on nat-gas-friendly legislation has lifted Westport in the past along with its nearest competitors Clean Energy Fuels (CLNE) and Fuel Systems Solutions (FSYS).
All said and done, Westport Innovations is still treading water while its competitors have sunk in the most recent market downturn. Its balance sheet received some spring cleaning lately, replacing previous debt with $36 million of lower cost debt. These are all strong characteristics of a company making itself look good for a potential buyer. So if your portfolio could use an attractive (buy out) speculation stock, you should keep an eye on Westport Innovations.
Accuride (ACW): Accuride has lost 63% of its value since the beginning of this year and has just lowered its earnings outlook for the year 2011. The company said it is facing market conditions and performance issues at its operations that will prevent it from achieving 2011 full-year results within the ranges published last quarter. Yet, all three of the analyst that cover this stock have a buy rating and Accuride has been purchased by a number of insiders over the past three months.
David Gallo's hedge fund firm Valinor Management has also increased his position to $23 million in Accuride, so there is still a lot of faith in the company despite the sell-off. The lowered earnings forecast is apparently due to higher start up costs in the company's new aluminium-wheel facility and sudden increased demand for the product. Wabash National (WNC), a trailer manufacturer and a major buyer of Accuride’s component parts for the commercial vehicles industry, also missed its earnings numbers last month in spite of nearly doubling its revenues. Both of these companies were taken by surprise the increased demand as truck sales were 33% higher in the quarter, which doesn't reflect well on them in the present but does look good for future prospects. This is probably why people closer to the industry are buying up the stock.
Pier 1 Imports Inc. (PIR): There are two main drawbacks in online shopping: not being able to touch or try on the product and not being able to easily return it if need be. In the summer of 2012, Pier 1 Imports, Inc. will be deploying its ecommerce site to offer more flexible options to their customers. The EDGE platform will enable their customers to buy online with the option of having their orders either shipped to them or available for in-store pick up. The added bonus to the system is the ability to return items purchased online to the nearest store.
This strategy should take a lot of the negativity out of the online shopping procedures, giving Pier 1 Imports a competitive advantage over retailers that don't have online services and online retailers who don't have the brick and mortar facilities. Pier 1 Imports currently has a beta of 4.52, indicating the stock will be more volatile than the rest of the market. However, in the most recent quarter, Pier 1 Imports reported a net earnings per share of 0.92 and has a PEG ratio of 0.96, with a price to earnings of 9.71, indicating that the stock may be undervalued. So now could be a good time to stock up if you believe the combination strategy is likely to work.
Ligand Pharmaceuticals, Inc. (LGND): Ligand Pharmaceuticals is a biotech firm that is not just doing the research but also seeing the results on their bottom line. If there is one thing for certain, a stock won't move without a catalyst and the next few months should be packed with stock-moving events for Ligand Pharmaceuticals.
Ligand Pharmaceuticals has partnered with seven major pharmaceutical companies for a worldwide network of distribution of its products, both in and out of the pipeline, including: GlaxoSmithKline plc (GSK), Baxter International Inc. (BAC), Merck & Co. Inc. (MRK) and Pfizer Inc. (PFE) to name a few.
In 2010, the total revenues for the company were $23.5 million; and for 2011, Ligand forecasts revenues in the range of $22 million to $24 million, so the company is nothing if not consistent. In the second quarter of 2011, Ligand had a net loss of nearly $1 million or $0.05 per share compared to a loss of $283 thousand or $0.01 per share in the same time period of last year.
But over the last six months, the company's directors have purchased more than $1.2 million of the stock, so if insider trading is any indicator of the not too distant future something is set to be brewing for sure. Shares of Ligand have gained 49 percent year-to-date with a 52 week low of $8.14 and a 52 week high of $16.24, so the current price of $13.00 could be a nice entry point and if you really like the action, you could have several plays in Ligand Pharmaceuticals over the next year.