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Small Stocks. Big Returns. The SmallCap Network is one of the web's leading small cap stock trading communities. While large caps tend to receive the majority of media attention, small and micro cap stocks as well as penny stocks can often offer the most potential for investment gains. The... More
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  • Five Great Stocks Under Five Dollars - NCS, SUSQ, AXL, BC, UIS 0 comments
    Jul 28, 2009 1:17 PM | about stocks: UIS, BC, AXL, SUSQ, NCS
    Bargain hunters, take a look at NCI Building Systems, Susquehanna Bancshares, American Axle & Manufacturing, Brunswick, and Unisys right now.

    While the bear market of 2008 and 2009 may have punished stock portfolios, for the stronger companies the marketwide losses also mean incredible bargains... well undervalued stocks, given the economic turnaround starting to materialize. We've identified five such bargain stocks, each of which boasts a share price of less than five dollars. The stocks you may want to consider adding to your collection are NCI Building Systems Inc. (NYSE:NCS), Susquehanna Bancshares, Inc. (NASDAQ:SUSQ), American Axle & Manufacturing, Holdings Inc. (NYSE:AXL), Brunswick Corp. (NYSE:BC), and Unisys Corporation (NYSE:UIS).

    These names were largely chosen based on fundamental and technical criteria. Mostly, however, they were just chosen based on strong odds of solid gains in the near and distant future.

    Let's take a look at each one.

    If the real estate market as well as the economy really are improving the way June's 11% increase in home sales implies they are, then NCI Building Systems Inc. (NCS) may be poised for much better days.

    Just to clarify, NCI Building Systems doesn't do anything in residential construction - the company manufactures various metals and metal products for nonresidential construction. The two construction venues go hand in hand though.

    NCI remained profitable through the third quarter of last year, but slipped into the red the next two quarters. Analysts expect a profit in the current quarter again though, and then a profitable 2010. However, next year's EPS estimate of 50 cents seems woefully low.

    When you think 'regional bank', Susquehanna Bancshares, Inc. (SUSQ) is probably not the first name that comes to mind. Maybe it should be right now though.

    The bank took a loss in its recently-reported Q2, but that was no surprise. The loss was smaller than expected. The market is looking for minor losses this and next quarter as well (5 cents and 3 cents, respectively). Given that the company 'beat' this last time around though, the market may have errantly priced in the worst-case scenario.

    Either way, the forward-looking P/E of 22.0 is decent, and possibly underestimates how well the industry could recovery once the economy gets into full swing again.

    American Axle & Manufacturing, Holdings Inc. (AXL) is completely dependent on the success of the major auto makers for its own success, as it's a supplier of drive trains and transmission parts to the major automobile manufacturers. And, it's no secret that the car industry is in tatters.

    So why jump on AXL shares here? Like Susquehanna, American Axle may be priced for a worst-case scenario... even though cars sales will have to recover at some point in time. The analysts think that could be next year.

    If they're right, then $1.28 for a stock paired with an expected EPS of $0.74 for 2010 is an outright bargain. Heck, it would be a bargain with a fraction of that forecasted EPS.

    Brunswick Corp. (BC), the maker of everything from boats to bowling pins, may be the poster child for the 'leisure product' group. The reason for the interest is obvious though... an improving economy means more discretionary spending. And, Brunswick certainly has lots of room for improved numbers - the company got killed last year, and is on track to put up some ugly numbers this year as well.

    As the old saying goes, however, buy it when nobody else wants it (and sell it when everybody else wants it).

    The fact is, some of the current forecasts say 2010 isn't going to be a profitable year for Brunswick, while other forecasts say it will be. With the stock's price rising since October of last year, this is a case where the market may know that the dated forecasts are off-base.

    No recovery portfolio is complete without a little bit of technology exposure; we chose Unisys Corporation (UIS).

    Not only is Unisys in the hole for the year, but the company has fallen short of analyst estimates (sometimes badly) in each of the last four quarters. On the other hand, the stock has been duly punished for the crime. Now if Unisys can actually earn the expected 8 cents per share next year, the drubbing will translate into a value proposition.

    As a matter of fact, the stock's already acting as if that's how things are going to take shape. Yet, look at the amount of room shares have to recover.

    So there you are... five dirt-cheap investment ideas you won't hear the media talking much about just because they're a little obscure. That obscurity, however, is your advantage when seeking undiscovered small cap investments.

    Stocks: UIS, BC, AXL, SUSQ, NCS
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