Value Trap or Play? 12 Smallcaps Hitting New Lows

by: The Keating Letter
Don’t catch a falling knife. That’s typically good advice, and you have to be careful with 52-week low lists. The idea isn’t to rush out and buy a stock because it just hit the list.
While I’m not a momentum investor, I respect the emotional motivations behind price movements. Most investors buy when prices go up, and sell when they are going down. That’s human nature. As a value investor, I take the opposite approach, but I also don’t take my cues from the stock price. A 52-week low list should be an idea generator - a starting point. Once you do your research and feel confident that there is a mis-pricing situation then you should scale into a position. What has dropped, even if not justified by the fundamentals, can drop further. If you agree with this approach, dollar-cost averaging into a position is the way to go.
A flat to down day in the markets today brings a fresh set of stocks that hit new 52-week lows. Here’s the report for January 20, 2011. There are 12 stocks. I used MarketWatch's screener and paraphrased the descriptions from Seeking Alpha's company profiles. Where appropriate, I've linked to a Seeking Alpha article discussing the stock.


Name Price % Change Volume Market Cap
BioCryst Pharma
4.32 -2.04% 275k 194m
China Integrated Energy
5.96 -2.45% 424k 201m
China Intelligent Lighting
2.29 -1.30% 67k 30m
China Sky One Medical
5.27 -1.50% 368k 88m
1.95 -4.88% 2.1m 125m
Farmer Brothers Co
13.57 -1.24% 47k 206m
Genco Shipping & Trading
13.69 -2.00% 1.2m 486m
China Finance Online
6.05 -2.58% 69k 133m
M&F Worldwide
21.89 -1.53% 85k 423m
Rosetta Genomics
0.87 -3.38% 160k 14m
Suffolk Bancorp
22.41 -4.27% 56k 216m
Transcontinental Realty Investors
5.91 -5.29% 3k 47m

BioCryst Pharmaceuticals: BCRX is a biotechnology company that designs, optimizes and develops novel drugs that block key enzymes involved in cancer, viral infections and autoimmune diseases.
China Integrated Energy: CBEH engages in the wholesale distribution of finished oil and heavy oil products in China, including gasoline, diesel and naphtha to distributors that supply to retail service stations and gas stations. (Why Is China Integrated Energy Raising Money?)
China Intelligent Lighting: CIL manufactures residential, commercial and outdoor lighting, LED accessories, and other accessories. (Still Optimistic About China Intelligent Lighting)
China Sky One Medical: CSKI developes, manufactures and markets over-the-counter, branded nutritional supplements and plant and herb based pharmaceutical and medicinal products. (27 Red Flags for Chinese RTO Stock Investors to Look For)
Cytokinetics: CYTK is a clinical-stage biopharmaceutical company and engages in the discovery and development of small molecule drug therapeutics for the treatment of cardiovascular diseases and cancer.
Farmer Brothers Company: FARM engages in the manufacture, wholesale and distribution of coffee and non-coffee products in the United States.
Genco Shipping & Trading Limited: GNK engages in the ocean transportation of drybulk cargoes through the ownership and operation of drybulk carrier vessels worldwide. (Identifying the Market's Best Small Cap Bargains)
China Finance Online: JRJC provides online financial and listed company data and information in China.
M & F Worldwide: MFW provides check and check-related products, direct marketing and customized business and home office products.
Rosetta Genomics: ROSG develops microRNA-based diagnostic programs for various cancers. (Biotech Merger/Acquisition Activity Mixed During Major Conference)
Suffolk Bankcorp: SUBK provides domestic, retail, and commercial banking services to small and medium-sized commercial enterprises, professionals, and individual consumers in Suffolk County, NY.
TransContinential Realty Investors: TCI acquires, develops, and owns residential and commercial real estate properties.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.