8 Undervalued Stocks With Big Upside Potential

Mar. 21, 2011 10:03 AM ETACLS, CHGS, JETMF, DNN, MGIC, PLUG, RASF, URG18 Comments
Michael Bryant profile picture
Michael Bryant
3.41K Followers

Below is a screen of stocks from Finviz with filters including a P/B below 2, down 10% or more for the week, and up 30% or more in the last half of the year. The idea was to find stocks that have a good relative performance, are down dramatically, and are reasonably valued. Thus, the current fall may not be warranted.

(Click charts to enlarge)

P/S = Price/Sales

P/B = Price/Book

P/C = Price/Cash

P/FCF = Price/Free Cash Flow

EPS next Y = EPS growth next year

EPS past 5Y = EPS growth last 5 years

Insider Trans = Insider Transactions

Sales Q/Q = Sales growth quarter over quarter

ROA = Return on assets

ROE = Return on equity

Curr R = Current Ratio, which, per Wikipedia, “measures whether or not a firm has enough resources to pay its debts over the next 12 months.” A ratio of 1.25 means that “for every dollar the company owes it has $1.25 available in current assets.”

Quick R = Quick Ratio

Gross M = Gross Margin

Oper M = Operating Margin

Profit M = Profit Margin

Axcelis Technologies (ACLS)

The maker of equipment for the chip industry has a low price/sales ratio of 0.84. Both the vertical purple line and the green line show when the technicals were at similar levels, and the stock started its rise.

China GengSheng Minerals (OTC:CHGS)

The heat-resistant products maker seems to have been confused as a rare earths play. But the stock is selling for 0.91 times book value. PEG is a very low 0.47. The orange line, vertical purple line, and brown line show when the technicals were at similar levels, and the stock was neutral, rose, and fell respectively. But be warned that there has been increased fraud activity in the smallcap China space.

Crosshair Exploration & Mining (CXZ)

The uranium, gold and vanadium miner is poised to benefit from the rise of all three metals. And at 1.10 times book value, it seems reasonably priced. The vertical purple line shows when the technicals were at similar levels, and the stock started its rise.

Denison Mines (DNN)

The tiny uranium miner seems to be a good value at 1.12 times book value and quarter-over-quarter sales growth of 212%. The vertical purple line shows when the technicals were at similar levels, and the stock started its rise.

Magic Software (MGIC)

The company had a magical run this past year, with a nearly 300% yield. But valuations and potential say it still has more room to run. This Israeli cloud computing company still trades at a reasonable PEG of 1.97. The vertical purple line shows when the technicals were at similar levels, and the stock started its rise.

Plug Power (PLUG)

The stock’s poor longterm performance makes this alternative fuel maker very speculative and not a long term buy. But quarter-over-quarter sales growth rose 126%, a high number. The vertical purple line shows when the technicals were at similar levels, and the stock rose. But the orange line shows when the technicals were at similar levels, and the price dropped.

RAIT Financial Trust (RAS)

I am skeptical about this stock because financials are still struggling. However, REITs are staging a comeback. Operating margin is very high at 40%, and PEG is very low at 0.14. The vertical purple line shows when the technicals were at similar levels, and the price rose. But the orange line shows when the technicals were at similar levels, and the price dropped.

UR-Energy (URG)

The small uranium miner is trading for 1.89 times book value, a reasonable valuation, and short ratio is only 0.21, low for a speculative stock. Plus, EPS is expected to rise 112%, very high for any company. The vertical purple line shows that the last time the technicals were at similar levels, the stock started its rise.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

This article was written by

Michael Bryant profile picture
3.41K Followers
Investor. Mission: Help people make money. Degree: Chemistry from NC State University. Freelance writerFor short-term ideas about big movers, follow my StockTalks. But please note I am not the best short term stock picker. I am 7-0-1 in the long term, but 0-3 in the short term. Recommended authors:Micheal Filloon (oil shale/short term and long term)Brad Thomas (REIT short and long term)Taylor Dart (mainly gold short and long term also swing/trend trader)Ian Bezek (long term trader and new ideas)Over the last 12 years, I am 7-4-1. I was up 130%, 29%, 15%, 3%, 19%, 25%, 56% from 2001-2007 respectively, and down 39%, 39%, 79% from 2008-2010 respectively. In 2011, I was flat, but some ill-timed trades (should have held AG) caused a loss of 17% and 14% in 2012 and 2013. Note: gains and losses include transaction costs. 2009 and 2010, I traded frequently, adding up transaction costs. That is why I favor long term holding over short term trading.I invest in all stocks. I don't agree that US stocks are the safest. Want a safe stock, try TEVA. It did not fall much, or at all, during the credit crisis. And generics are the future.Being a chemistry graduate, I tend to focus of the drug, medical, biotech, and chemical industries. So far, I wrote about 5 medical companies (RPC, OREX, KV.A, PLX, & XOMA). OREX and KV.A were right on target, though KV.A has fallen back hard after reaching their highs, which surprised me. PLX was half right: it did get a negative letter from the FDA, but the options strategy was wrong. For RPC, so far, I have been wrong, and exited my position in mid-May. XOMA also has fallen since I wrote about it.However, I also cover diverse stocks, from BIDU to NCT. Ignoring other industries is a big mistake. I look for stocks I find undervalued on both a value perspective and a growth perspective, but placing more emphasis on growth. I combine both fundamental and technical analysis. The fundamentals only tell you part of the story.Anybody can make money. Don't let Wall Street analysts manipulate you. Their analysis is good, but don't take everything they say. Good luck investing, and I will do everything I can to make you money.Oh, and I invest in rather risky stocks with high potentials. If you are nearing retirement, I don't recommend you copy my portfolio. I will label my stocks with the risk/reward factor. I am adding a watch list with some stocks for retirement investors that I like. All watch list stocks are long term holdings.Current holdings:O (low risk/medium reward)DLR (low risk/medium reward)RDS.B (low risk/medium reward)OKE (medium risk/medium reward)CGC (medium risk/high reward)GBTC (medium risk/high reward)MMNFF (medium risk/high reward)BTCS (high risk/high reward)BTSC (high risk/high reward)MCOA (high risk/high reward)MGTI (high risk/very high reward)HVBTF (high risk/very high reward)XXII (high risk/very high reward)RGSE (very very high risk/high/if any reward)SUNEQ (bankrupt/no reward)Watch list:ROK (medium risk/medium reward)AG (medium risk/medium reward)EXK (medium risk/medium reward)GTIM (medium risk/high reward) BOJA (medium risk/high reward)SWKS (medium risk/high reward)JAZZ (medium risk/high reward)NFLX (medium risk/high reward)LVS (medium risk/high reward)SAM (medium risk/high reward)CMG (medium risk/high reward)ZNH (medium risk/high reward)RDY (medium risk/high reward)NVDA (low risk/high reward)AVGO (low risk/medium reward)CF (low risk/high reward)TTM (low risk/high reward)NVO (low risk/high reward)BIDU (low risk/high reward)PCLN (low risk/high reward)CLF (low risk/medium reward)AAPL (low risk/medium reward)GOOG (low risk/medium reward)TEVA (low risk/medium reward)GOL (low risk/medium reward)CIM (low risk/medium reward) - dividend stock

Recommended For You

Comments (18)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.