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7 Stocks Under $5 Worth Pursuing

In response to popular demand, here are some low-priced picks

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Crown Media Holdings (NASDAQ:CRWN) is the network behind the Hallmark Channel and the Hallmark Movie Channel. I personally wouldn’t be caught dead watching The Martha Stewart Show, but to each his or her own. After all somebody is watching.

This company has managed to post a nearly 50% jump in share prices so far in 2012 and has seen six straight quarters of revenue growth. Of course, expectations are difficult to beat because just about no analysts are even watching this stock so it’s hard to know whether its growth is good, bad or ho-hum.

Crown Media reports earnings July 27. (Note: This stock does indeed have low volume of around 200,000 shares daily, so please use a limit order if you want to trade this company. It is illiquid and a big purchase could skew share prices.)

Synovus Financial (NYSE:SNV) is one of the many cheap bank stocks out there right now. SNV has finally returned to profitability, being back in the black this year after trouble in the wake of the financial crisis. That means its 1 cent quarterly dividend could be going up in 2013 presuming the improvements continue and the reserves are socked away.

Oh, and by the way, the 1 cent dividend is a nice 2% yield considering the $2 share price. Beware that SNV is, after all, a bank — and thus the uncertainty surrounding bad housing debt and financial reform apply here as they do to the big boys. But frankly, banks mostly move in lockstep these days so it may not make much difference which bank you invest in.

If you’re looking cheap, SNV is an option. It reports earnings July 24, and shares are up about 40% year-to-date.

United Microelectronics (NYSE:UMC) is a Taiwan semiconductor manufacturer that is in the right place for the high-tech revolution, as it is the second-largest foundry in terms of market share. It supplies big boys including American tech giants IBM (NYSE:IBM) and Qualcomm (NASDSAQ:QCOM), among others.

Shares are down slightly year-to-date and off about 15% in the last year due to a slowdown in new orders. But the company pays a decent but fairly volatile 2.8% dividend, and semiconductor stocks should get a boost if and when a consumer or business recovery takes shape.

Mizuho Financial (NYSE:MFG) is another bank stock, but this one is in Japan and trades as an ADR on U.S. exchanges. Despite the share price under $4, the company has a market cap approaching $40 billion. A big selling point is the plump dividend, $4.77 on an annualized basis though it is paid just once a year and not until the spring. Still, the stock is up 20% year-to-date not counting dividends and could be a decent alternative to domestic banks if you’re looking for diversification into financials but without the pain of another London Whale.

Wendy’s (NASDAQ:WEN) was part of a list of under $10 stocks I made back in April, and since its price hasn’t budged much from around $5, I include it again. The sale of lagging Arby’s Restaurant Group backed out some revenue and restructuring costs have been a short-term drag, but Wendy’s is ahead of some fast food rivals by focusing on a healthy and fresh menu.

Also, the leadership of Emil Brolick — who successfully rejuvenated fast-food giant Yum! Brands (NYSE:YUM) through international expansion is a huge plus, too. Wendy’s has a lot of room to grow internationally, and that’s a double-edged sword. If Wendy’s locations take they will be a big boost to the bottom line. But the burger joint is late to the expansion into Latin America and China, Wendy’s may not see profits materialize.

Wendy’s is roughly flat year-to-date in 2012, and reports earnings August 9.

Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at editor@investorplace.com or follow him on Twitter via @JeffReevesIP. As of this writing he did not own a position in any of the stocks named here.


Article printed from InvestorPlace Media, http://investorplace.com/2012/07/7-stocks-under-5-worth-pursuing/.

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