One of the screens I run every weekend is one designed to find intriguing stocks between $3.75 to $5 a share. I have found that these stocks can run strongly if they can get above the $5 level as some institutions are prohibited from buying shares at under that price level. Here are four stocks priced within this range. All have cash-rich balance sheets, improving fundamentals and all broke across their 200 day moving average last week.
"Official Payments Holdings (NASDAQ:OPAY) provides of direct electronic payment solutions to federal, state, and local governments, as well as to educational institutions, utility companies, and other public sector clients in the United States." (Business description from Yahoo Finance)
Three reasons OPAY has upside from just under $5 a share:
- The company has over $40mm in net cash on its balance sheet (approximately 55% of its market capitalization at current prices).
- It has two analysts that cover the firm. One analyst has a $7 price target and the other's target is $8 a share.
- The stock has intermediate technical support at $4 a share (See Chart).
"Hudson Global (NASDAQ:HSON) provides specialized professional-level recruitment and related talent solutions worldwide. The company provides permanent recruitment services; and contract consulting services, including project management, interim management, and professional contract staffing services." (Business description from Yahoo Finance).
Three reasons HSON looks like it has upside at $4.61 a share:
- A 10% owner (Sagard Capital Partners) has been a frequent buyer lately and has made several million dollars of purchases in the last few months.
- The company has over $25mm in net cash on the balance sheet (around 20% of market capitalization) and sells for just 17% of annual revenues.
- The median analysts' price target on HSON is $6 a share. The stock traded north of $14 prior to the financial crisis.
"Tellabs (NASDAQ:TLAB) designs, develops, and supports telecommunications networking products for communication service providers in the United States and internationally". (Business description from Yahoo Finance).
Three reasons TLAB has value at just under $4 a share:
- Tellabs has over $800mm in net cash on its balance sheet (about 2/3's of its market capitalization).
- Insiders have purchased over $800K in new shares since May of this year.
- The stock is selling near the bottom of its five-year valuation range based on P/S, P/B and P/CF.
"GSI Technology (NASDAQ:GSIT), a fabless semiconductor company, designs, develops, and markets high-performance memory products for the networking and telecommunications markets primarily in the United States, China, Malaysia, and Singapore". (Business description from Yahoo Finance).
Three reasons GSIT is worth a flyer at just under $5 a share:
- The company has almost $60mm in net cash on its books (over 40% of current market capitalization).
- Taking out cash, GSIT is selling at less than 7 times forward earnings and is priced at just 4% above book value.
- The stock is selling near the bottom of its historical valuation range based on P/S and P/B.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in OPAY, TLAB over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.