Low-priced stocks can be tempting, but sometimes they represent value traps suffering from poor stock performance. Here's an idea to separate the good from the bad. We ran a screen on stocks trading under $5 for those with "overweight" ratings from Barclays, indicating that analysts at Barclays are bullish on the companies' outlooks.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.
We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. (To access a complete analysis of this list's recent performance, click here.)
Do you think these stocks are poised to move higher? Use this list as a starting point for your own analysis.
List sorted by ratings date.
1. Power-One Inc. (NASDAQ:PWER): Designs, manufactures, and markets power conversion and power management solutions for the renewable energy, communications infrastructure, and other technology markets. Market cap of $407.54M. Price (as of market close on 01/03) at $4.13. On 11/11/2011, Barclays Capital had an Overweight rating on the stock. This is a risky stock that is significantly more volatile than the overall market (beta = 2.18). The stock has lost 61.67% over the last year.
2. ZIOPHARM Oncology, Inc. (NASDAQ:ZIOP): Focuses on the development and commercialization of in-licensed cancer drugs in North America. Market cap of $301.86M. Price (as of market close on 01/03) at $4.30. On 02/23/2011, Barclays Capital had an Overweight rating on the stock. The stock is a short squeeze candidate, with a short float at 13.76% (equivalent to 17.47 days of average volume). The stock has performed poorly over the last month, losing 15.19%.
3. Chimera Investment Corporation (NYSE:CIM): Operates as a real estate investment trust in the United States. Market cap of $2.58B. Price (as of market close on 01/03) at $2.59. On 01/20/2011, Barclays Capital had an Overweight rating on the stock. The stock has lost 28.49% over the last year.
4. Suntech Power Holdings Co. Ltd. (NYSE:STP): Engages in the design, development, manufacture, and marketing of photovoltaic products. Market cap of $398.15M. Price (as of market close on 01/03) at $2.35. On 01/11/2011, Barclays Capital had an Overweight rating on the stock. This is a risky stock that is significantly more volatile than the overall market (beta = 3.01). It's been a rough couple of days for the stock, losing 7.92% over the last week.
Data sourced from Yahoo Finance.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.