Below is a list of five equities that have been on my watch list and, with over 25% average upside, are worth a second look:
1. Thompson Creek Metals Company Inc. (TC) is an industrial metals and minerals company that, as of this writing, is trading at $6.10. This current trading price is just above, what appears to be, very strong support at $5.75. The company touched this support level last October but has not remained below this price for more than a day since early 2009. In addition to this low price, the company holds a very low price to book (P/B) ratio of 0.59, a strong return on equity of 18.49%, and, overall, appears undervalued. The average price target, from a total of five brokers, is currently $9.65, a 58.20% upside from the stock's current price.
As the stock is trading near its $5.75 support level, now may be a good time to enter this, what appears to be very undervalued company.
2. Best Buy Co. Inc. (BBY) has struggled immensely, falling from its $45.00 high in late 2010 to its current $22.11. This fall can be attributed to many factors including an apparent over-commitment to the 3D TV "revolution", an under-commitment to online competitors, and poor, overall leadership, to name a few. The company's CEO, Brian Dunn, recently resigned, leaving the company searching for new leadership. This resignation, in some investors' opinions, could spawn the turnaround the company so badly needs.
As of this writing, Best Buy is trading just above $21.00, a support level that the company hasn't remained below since early 2003. It appears that investors are hesitant to let the company's stock fall below this support level, possibly optimistic that new leadership will bring hope to an otherwise failing company. If we do begin to see a brighter future with new leadership and a change in the overall direction of the company we may quickly see a movement toward the current, average analyst target of $26.92.
3. LDK Solar Co., Ltd. (LDK) is a highly volatile stock (2.82 beta) and is, therefore, a risky play. But for those who can endure the risk, this stock may be worth some investigation. Like Best Buy, LDK Solar is trading above, what appears to be, a strong support level at $2.75. Analysts appear to hold confidence in the company with an average target, from a total of ten brokers, at $3.61, a 20.33% upside from the stock's current price of $3.00. Though I am not yet confident in the long-term future of LDK Solar, this stock could yield significant gains for risk tolerant, short term traders. Do note, however, the company's upcoming earnings date of April 30th, 2012.
4. Gladstone Investment Corporation (GAIN), a diversified investments company, has yielded good returns since its dip to the low $6.00 level last September and appears to still be undervalued. The company is fundamentally strong with notable statistics including a P/B of 0.77, 12.27% return on equity, and 83.82% operating margin. Gladstone Investment Corporation also offers an 8.13% annual dividend which is distributed to investors monthly, making this equity a strong play for those looking for monthly income.
The average analyst price target, from a total of two brokers, is $8.75, an 18.56% upside from the stock's current price.
5. Dell Inc. (DELL) has been climbing consistently since bouncing off of support at $14.00 late last year. The stock is now significantly above this support level, currently trading at $16.53, but looks poised to continue climbing. Dell Inc. is fundamentally very strong and boasts an impressive 41.86% return on equity; this rivals Apple Inc. (NASDAQ:AAPL)'s return on equity of 45.58%.
Analysts also appear confident in Dell Inc. with an average price target, from a total of 24 brokers, of $19.46, a 17.73% upside from the stock's current price.
Disclosure: I am long TC.