9 Uber Cheap Stocks to Buy Now

Summer Sale

On the heels of a late June rally, stocks started July off with a big bang. But in the past few trading days, concerns over the widening European debt crisis and an unsettling U.S. jobs report have caused stocks to pull back substantially. Does this mean the summer rally has fizzled, or is it merely the pause that refreshes?

If you’re still in the bullish camp — and with a fresh earnings season just starting off, that may be the place to be — this sell-off is the perfect opportunity to buy stocks that ran away from you during the past month. So we’ve put together a list of already cheap stocks that are now even better deals given the stock market’s recent dip.
Here are nine cheap stocks to buy now.

Cheap Stock to Buy #1 – Leap Frog Enterprises (LF)


Hilary Kramer, Editor, Breakout Stocks Under $5

Leap Frog Enterprises (NYSE: LF) makes technology-based educational products that teach phonics, reading, writing and math. Many of these learning games use characters licensed from other companies like Disney/Pixar. This stock was a real highflier at one point. In 2004, however, things started to unravel. Sales of its LeapPad systems fell, as the product became a little stale, and the lower-cost, lower-margin Leapster product line cannibalized sales from the LeapPad. The stock, which had been over $45 a share in late 2003, began a long descent, trading as low as $1 for a brief time around the market bottom in March 2009.

But thanks to cost-cutting, a pretty nice turnaround is taking shape. And Leap Frog’s new educational tablet products for kids have been the subject of favorable reviews. This should help the company’s revenue momentum remain strong, even as excess inventories may hurt sales for another quarter or two. This cheap stock is a strong buy.

Cheap Stock to Buy #2 – Physicians Formula Holdings (FACE)


Nancy Zambell, Editor, Buried Treasures Under $10

Physicians Formula Holdings (NASDAQ: FACE) makes premium-priced cosmetics via retail, drug chain, mass volume, specialty retail and wholesale channels, including stores operated by Wal-Mart Stores (NYSE: WMT), Target (NYSE: TGT), CVS (NYSE: CVS) and Rite Aid (NYSE: RAD). Brands include Physicians Formula, Almay, L’Oréal, Max Factor, Neutrogena, Revlon, OPI, Borghese and Iman.

During a troubled economic era, FACE has managed to continue pulling ahead of its competition, in market share and in financial strength. However, a Nasdaq notification for delisting caused the stock to pull back. This was due to one of FACE’s auditors resigning from the company’s Board of Directors, leaving them with just two audit members. Since three auditors are required by Nasdaq, the exchange gave FACE a “cure period,” and last month the company announced that it had appointed one. Fortunately, the snafu with the Nasdaq and the general market sell-off have taken shares of FACE back down to a very buyable level.

Cheap Stock to Buy #3 – Majesco Entertainment (COOL)


Louis Navellier, Editor, Emerging Growth

Majesco Entertainment (NASDAQ: COOL) is an innovative provider of video games, developing a wide range of titles for Sony’s PlayStation, Microsoft’s Xbox and Nintendo’s Wii systems. In June, the company reported that net revenues more than tripled year-over-year to $32.1 million compared with $10.9 million a year ago. Earnings reached 13 cents per share. Analysts expected earnings of 7 cents per share, so the company posted a fantastic 85% earnings surprise.

It has been suggested that video game sales are in trouble, following game systems’ revenues plunging 19% in May, but I don’t believe there’s anything to worry about with this stock. Analysts are currently expecting 975% growth this year, which is quite a bit more than the 36% growth expected from its industry. Expect to see big movements from this aggressive stock, but rest assured that you’re going to see big profits from Majestico in the end.

Cheap Stock to Buy #4 – E-Trade Financial (ETFC)


Hilary Kramer, Editor, Breakout Stocks Under $5

E-Trade Financial (NASDAQ: ETFC) provides online brokerage and related services primarily to individual retail investors. The stock should do well if the market turns around and stays strong as we head into earnings season. Its earnings power is significant once the mortgage market improves, and I expect to continue to see bad loans roll off the company’s books.

E-Trade is a strong franchise within the retail trading community, and I like the upside potential. A move to my $20 target would give you a more than 50% return from current prices.

Cheap Stock to Buy #5 – Lannett Company (LCI)


Nancy Zambell, Editor, Buried Treasures Under $10

Lannett Company (AMEX: LCI) develops and distributes generic pharmaceutical products in the United States. From 2009 to 2010, Lannett saw a 10% expansion in prescriptions for its products, and its best-selling thyroid treatment saw sales grow 16% during that period.

Lannett recently received approval from the FDA for its morphine sulfate oral solution, with estimated annual sales of $31.7 million, but the stock is still moping along. I think it’s because the company still has a few more approvals and new filings on tap at the FDA, which always makes investors hesitant. Industry analysts are anticipating approval of at least two generic products in the next month or two, which are predicted to get Lannett moving again. At this time, this cheap stock remains a screaming buy.

Cheap Stock to Buy #6 – Mercer International (MERC)


Louis Navellier, Editor, Emerging Growth

Mercer International (NASDAQ: MERC) produces wood pulp from both virgin wood and recycled products. Mercer is unlike any other paper company I’ve seen, though. The company is not only the largest producer of its particular type of pulp in Europe (it also operates in North America and Asia), but it also is rapidly developing a renewable energy division. In one of its mills in Canada, it converts the wood that is left over after the pulp production process to “black liquor” and burns it in a high-pressure boiler to make power.

The main advantage this company has over its competitors is its innovation. It has some of the most modern mills in the world and is rapidly improving the efficiency of its processes and pursuing new opportunities where it can (its burgeoning energy business is just one example). Most paper and pulp companies do best in an accelerating economy so Mercer will not only benefit from its organic growth, but also from the rapid improvements in the global economy. This cheap stock is an aggressive play, but could be a big gainer.

Cheap Stock to Buy #7 – Optimer Pharmaceutical (OPTR)


Hilary Kramer, Editor, Breakout Stocks Under $5

Optimer Pharmaceutical (NASDAQ: OPTR) is a biopharmaceutical company that focuses on anti-infective products, including ones that treat gastrointestinal infections and related diseases. The stock dipped last month, and looks to have found support just under $12.

A lack of news from the company hasn’t given new investors a reason to get in, but I think that will change. Its new anti-infective drug, Dificid, was approved at the end of May, and Optimer has good label and marketing agreements that should lead to a successful launch. Earnings will be released in early August, and I expect an update on Dificid will get investors interested. Use this pullback as an opportunity to buy this cheap stock.

Cheap Stock to Buy #8 – First Busey Corp(BUSE)

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Nancy Zambell, Editor, Buried Treasures Under $10

I think small regional banks are set to make a comeback, and in this space I like Illinois-based First Busey Corp. (NASDAQ: BUSE). The bank has had its share of problems, as Illinois was one of the largest hubs of banking problems in the nation during the financial fallout. BUSE borrowed $100 million TARP funds, which it hasn’t yet paid back in total, but it is making great progress toward that goal.

The company beat earnings estimates in the last four fiscal quarters, and institutions are ramping up their ownership. Additionally, this cheap stock pays a nice little dividend of almost 3%. As the regional baking sector recovers, I think BUSE will be a leader.

Cheap Stock to Buy #9 – Lattice Semiconductor Corp. (LSCC)


Nancy Zambell, Editor, Buried Treasures Under $10

A survivor of the tech boom and bust cycle, Lattice Semiconductor Corp. (NASDAQ: LSCC) has managed to consistently grow its new product revenue by 28% per quarter since 2006. And that astounding figure includes one of the worst recessions in our history, as well as a downturn in the semiconductor market. The company’s primary customers are original equipment manufacturers (OEMs) in the communications, computing, consumer, industrial, automotive, medical and military markets. Its strongest markets include the fastest-growing segments in our economy today.

LSCC intends to focus on aggressively expanding its mid-range markets, as well as its products for lower-power, lower-cost applications. It also plans to continue targeting customized solutions for its customers, all the while continuing to increase its flow of new product growth and entry into new markets.


Article printed from InvestorPlace Media, https://investorplace.com/2011/07/cheap-stocks-to-buy-lf-face-cool-etfc-lci-merc-optr-buse-lscc/.

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