$1, $2, $3, $4, $5, $6 & $7 Stock to Buy

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Bargains, Not Bathing Suits

Dollar SignsIt seems many investors have taken “sell in May and go away” to heart. After a strong April, the Dow Jones Industrial Average has shed about 2% since the beginning of the month. But just throwing in the towel (and packing your beach towel) is not a responsible way to invest. Those who take that approach are likely to miss out on substantial gains this summer.

The nice thing about a sell-off is that it gives you a chance to buy stocks for less. So we’ve come up with a list of cheap stocks you should put on your summer shopping list. Trading between $1 and $7 (prices rounded), these inexpensive stocks represent great buys right now.

$1 Stock – Citizens Republic Bancorp Inc. (CRBC)

Citizens Republic Bancorp Inc. (NASDAQ: CRBC) Current Price: 76 cents

Hilary Kramer, Editor, Breakout Stocks Under $5

Citizens Republic Bancorp Inc. (NASDAQ: CRBC) operates as the bank holding company for Citizens Bank and F&M Bank Iowa, which provide banking and financial services to individuals and businesses in Michigan, Wisconsin, Ohio, Iowa and Indiana.

The company reported a loss of 19 cents a share in the first quarter, an improvement from losses of 28 cents a share in the previous quarter and 21 cents from the year before. Credit quality also continues to improve. Over the past six months, non-performing assets are down 58%, watch list loans are down 43%, and delinquent loans are down by 61%. Interestingly, the company is seeing indications of increased loan demand and hired additional commercial bankers in the quarter — two more excellent signs. With profitability possibly coming next quarter, the stock is attractively valued, and I’m targeting it for $1.40.

$2 Stock – WebMediaBrands (WEBM)

WebMediaBrands Inc. (NASDAQ: WEBM)Current Price: $1.47

Hilary Kramer, Editor, Breakout Stocks Under $5

In this age when information is at our fingertips – literally – companies that provide the information people want and need will do well. While companies like Google (NASDAQ: GOOG) and Facebook try to serve the world, others focus on niches. WebMediaBrands Inc. (NASDAQ: WEBM) is one such company, and it is a leading player in a highly desirable market, providing content for media and business professionals.

The company is seeing significantly improved revenue and operating performance, and has a promising new product called AllFacebook.com, a Yellow Pages type of subscription-based service that should help it benefit from the high-growth Facebook market. My target for this undervalued stock is $3.

$3 Stock – Wave Systems Corp. (WAVX)

Wave Systems (NASDAQ: WAVX) logoCurrent Price: $2.77

Nancy Zambell, Editor, Buried Treasures Under $10

Digital security company Wave Systems Corp. (NASDAQ: WAVX) produces products used in identity protection, data security, digital signatures, electronic transaction integrity and network security. 

The company showed significant sales improvements in the first quarter, and reported a 27% increase in net revenues. Although still in a negative income position, the company is on the cusp of tremendous changes and opportunities in the network security arena — its specialty. Although the stock is volatile, this company has what it takes to make a difference in the cloud computing world. My target is $7.

$4 Stock – Powerwave Technologies (PWAV)

Powerwave Technologies (NASDAQ: PWAV)Current Price: $3.88

Nancy Zambell, Editor, Buried Treasures Under $10

Powerwave Technologies Inc. (NASDAQ: PWAV) operates in the wireless communication arena, targeting both enterprise and commercial customers around the world for its technologically advanced end-to-end wireless infrastructure solutions. The company’s indoor/outdoor wireless coverage systems offer better signal quality and reduced network congestion, giving users faster access and longer battery life, and support mission critical communications for government, law enforcement and public safety agencies worldwide.

Although a temporary delay in “ramping up” one of its new products impacted revenues and earnings for the first quarter, PWAV still showed a 19% increase in total sales year over year. By any stretch of the imagination, this company is severely undervalued. Its customer base is widespread, and it makes its money from wireless infrastructure, not handsets. That means that every time technology is changed, PWAV has additional opportunities to profit, as is going on right now with the transition to 4G.

The company is trading at 13 times forward earnings, significantly less than the industry, yet its growth rate is almost double its competition. My target is $7.50.

$5 Stock – Ruth’s Hospitality (RUTH)

Ruth’s Hospitality Group Inc. (NASDAQ: RUTH)Current Price: $4.91

Hilary Kramer, Editor, Breakout Stocks Under $5

Ruth’s Hospitality Group Inc. (NASDAQ: RUTH) is benefiting from improved corporate travel and moderate price increases. At the same time, it could also benefit from falling commodity prices. The company posted an encouraging earnings report this month, reporting that margins expanded despite a 1.4% increase in food costs, thanks to higher sales volume and effective control on restaurant operating costs.

This iconic restaurant chain is attractively valued at just 5.12 times trailing enterprise value/earnings (EBITDA). The stock looks to have consolidated around $5 in the last couple of months where it is a great buy. My target for RUTH is $6.50.

$6 Stock – Metalico (MEA)

Metalico (AMEX: MEA)Current Price: $5.70

Hilary Kramer, Editor, Breakout Stocks Under $5

Metalico (AMEX: MEA) recycles scrap metal and makes lead products used in everything from nuclear energy to stained glass windows to balance systems in planes. Demand for ferrous scrap metal continues to grow steadily driven by increasing electric arc furnace production capacity, and the company is also benefiting from the higher prices for ferrous scrap, which have increased dramatically. The scrap industry remains poised for further consolidation, and Metalico is right in the thick of it.

As long as global growth fundamentals remain intact, earnings for this steel scrapper should remain strong. The company could earn over 60 cents a share in the next two years, which is strong earnings power in the current environment. My target for MEA is $10.

$7 Stock – Radcom Ltd. (RDCM)

Radcom (NASDAQ:RDCM)Current Price: $6.63

Louis Navellier, Editor, Emerging Growth

Radcom Ltd. (NASDAQ: RDCM) is an Israel-based company, one of the hottest regions in terms of economic growth. It makes test equipment and software used in the creation, installation and maintenance of corporate computer networks. The company’s equipment identifies, diagnoses, isolates and resolves network problems. Radcom sells to telecom carriers, Internet service providers and communications equipment developers.

At the beginning of May, the company announced its highest revenues in four years in its quarterly earnings report. The company posted first-quarter sales of $5.6 million, up 26% from its first-quarter sales result of $4.4 million in 2010. On these sales, the company booked a profit of $311,000, of 5 cents per share, up 10% year-over-year. Management is expecting another strong year, and I think RDCM will be a big winner.


Article printed from InvestorPlace Media, https://investorplace.com/2011/05/cheap-stocks-to-buy-crbc-webm-wavx-pwav-ruth-mea-rdcm/.

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