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Earlier this week, we looked at some value stocks in the ranges of under $10, between $10 and $20, and today at stocks between $20 and $50.  Why should you care about stock price?  There could be several reasons.  First, you can buy more shares of lower priced stocks, which can grow if it is a good business.  Second,  perhaps you don’t have a lot of money with which to invest.  You will want to get as many stocks as possible.

Mid range stocks are different.  Often they have good range to grow, but have been valued by both analysts and buyers and sellers to be in the perfect range for which they are offered.  Sometimes these are priced because of a recent stock market drop.  That’s a great time to buy.  They are usually solid companies that ebb and flow with the market or their cyclical clients.

The criteria for these stocks was a P/E under 20, revenues over 20%, then narrowed down to having had a recent earnings surprises.

There were a number of banks that came up on this list.  But since the foreclosure market is still tentative, they are not included.  Neither are retail stocks because as people have to pay more for fuel, they will have less money in their pocket to spend on apparel and so forth.  Also, insider activity was a factor.  If insiders aren’t buying, why should others?  The results came down to only two companies.

First, Fluor Corp, (FLR) This company has been in engineering for the petroleum business for 100 years.  Its revenues are solid, insiders are buying after the big drop in the share price.  The share price dropped all the way down to 28 and now is in the mid 40s.  The P/E is under 11 and it has a solid small dividend yield.  As the price of oil revs up, so should this stock price.

Second,  MTS Systems (MTSC) is a company that operates on two legs.  One is in mechanical testing, the other in making sensitive measuring equipment.  At first glance, this company’s profit look boring.  Just a steady rise in revenue, no great leaps.  However, slow and steady wins the race, too.  And the P/E is under 9, so there is a lot of room for stock growth.  It is at a low right now, and what is most encouraging, is that insiders are buying like crazy.  There has been a departure of one of the directors, however, it is obviously not a concern to the rest of the top dogs there; perhaps their acquisitions bode a sign that the departure will be all right for the company.  It is trading near enough to the bottom to make this one a “throw in the box and forget about it trade.”  Just put in a sell at the high $30 to low $40 price range for a 100% profit.

These two bargain-bin stocks will benefit from the upturn in the market as it grows.  And you can go into the sale with the confidence that the people who work there are also taking on the same risk in their portfolios as are you.

Investors with a long term outlook build on their portfolios constantly.  Although the best buys right now are in global resources, there are a few individual stocks that are grabs as well in all price ranges.  Monday’s picks were mid priced. Today we’ll look at a one that is inexpensive, but has a solid profit margin, good revenue growth, and good insider activity.  This stock is such a rare find because after exhaustive research, this is the only stock under $10 that had such picky criteria.  

Globecomm Systems, Inc. (GCOM) : This company is in the satellite communications service.  It provides communications for a variety of customers from the private sector to the military.  The insiders feel good about buying into their company and have been trading steadily since the market turned down.  It has solid revenue growth and with the advent of mobile connectivity , the future looks even brighter for using the satellite services.  The P/E is under 7 and the revenues are growing yearly.  It is an excellent company for future growth.

This kind of stock is indeed rare. It is one reason why stocks in the emerging market sector is so hot right now.  There is so much growth overseas, and the prices are reasonable, that finding inexpensive bargains to get started with in a portfolio is super difficult. Tomorrow we’ll look at other bargain priced stocks.

Despite the warnings of well-meaning and cautious financial advisers, long term investors need to always keep finding good deals to add to their portfolios. This week we’ll look at a few lower priced stocks that diversity a portfolio and give a chance to build a good portfolio over time.

1.  Aqua America (WTR)  Water is referred to as “blue gold” by financial gurus.  It is thought that water problems in the future will make this commodity expensive and valuable.  Those companies who have the water rights of various water tables and reservoirs The slow, upward profitability of this stock and the fact that insiders grabbed into it when it had corrected downward a bit.  Aqua America (WTR) is one such company.

Right now WTR is close to being too expensive because the P/E is over 20. However, on the technical charts, it is trading almost at a low.  A good buy would be under 16.  Sell if it were to trade over 21.

2.DCP Midstream Partners LP (DPM):  It’s rare that a stock can triple in six months and still be an excellent value.  This is one such instance.  DPM is a pipeline company that provides a 13% dividend and  and a ridiculously low P/E of 4.  This company’s energy assets are involved with pipelines and propane.  As natural resources continue to propel upward, this company should do quite well.

3.  Caterpillar, Inc. (CAT)- It may seem counter intuitive  to purchase a company that depends on sales in big equipment in a world that is struggling financially. In fact, when this list was being put together, real estate, banks and other stocks which could be hurt significantly by the market was excluded.  However, CAT is different because it has worldwide recognition for its large equipment.  Plus it is in the perfect position to blitz upward whenever a recovery in this sector takes off.  It is still fairly close to the fifty-two week low.   CAT fell from 83 all the way down to 29. Slowly it is creeping back. This may be the riskiest stock on the list, but with a P/E under 9, and insiders buying confidently, this stock is probably a fine long term keeper.   So many emerging markets need heavy equipment and CAT has an aggressive world wide presence.

4.Targa Resources, LP (NGLS):  This pipeline maker has the one thing going for it that make stock pickers excited:  insider buying.  Insiders like this like crazy.  The last dividend was over 17% and although it is trading at twice its 52 week low of five, it still is $10 under its high of 26.  The P/E is under 9 and the future is bright as the price of oil creeps up.  If you have to lose money at the pumps, you might as well put some in your pocket through your investments.

[Due to technical difficulties with our service provider and the internet, this blog has been unable to be written daily in the past two weeks.  Thank you for your patience.]

A casual glance in the supermarket would probably not make most people cringe.  Prices took a big drop in the past eight months, and although food still may seem high to some people, it truly has dropped a bit in price.  Eggs, which had been as high in the upper Midwest as $2.00/dozen, sunk down during the time of deflation to $1.50/dozen and less.  Milk, before inflation, was fetching dairy farmers $22 per hundred weight. Last week, I was told that the same hundred weight was getting $9.

All this will change as the price of gasoline goes up. Shippers will impose higher fees to cover their delivery price.  That is more money out of the pockets of regular every day people.  It means higher prices in every store.   People can’t spend their money at a local store if they have to put their money in the gas tank.  It sets up a chain reaction where many small businesses could go under.

This inching up of fuel will set back the economic recovery that is underway.  While there has always been a time in American history when individuals have had to have wage increases to match the standard inflation that is going on, this is an exceptional time.  First, the number of available, excellent candidates is much higher than jobs available.  Employers don’t have to pay more to get good workers.  Second, when choosing between having a job or not having a job, most people will agree to the job without a pay increase just so they can put food on the table.  At this time, most Americans can not absorb an increase in fuel prices at all.

Martin Weiss, the ultra-conservative financial adviser, is warning that the market’s recent gains may be completely wiped out by another topple in the market.  He feels this is time to get out of the market if you have not already done son.

If one looks at the Dow Jones technical charts, it certainly looks as though the market is in a downhill trend.  Normal ups and downs in any market may account for the recent upward climb.  Weiss argues that the soft monetary base of the banks, the struggling of the average Americans, and the debt of the U.S. government makes another drop in the stock market quite likely.

If Weiss is correct, and it looks like the market could crash one more time some time in the next eight months.  Therefore it is critical to for all investors to balance the time they have to recover if they choose to stay in the market with the time before the money they are investing is needed.  If, for example, this money is for a child’s education and college is six years away, a steady balance of EE bonds with a small stock investment might be a better mix than the fully stock invested portfolio that was the standard ten years ago.  

Watch the price of fuel as a good indication of the health of the economy in the next ten months.  And adjust your investments accordingly.

When looking to pick a stock, researchers such as me and other advanced investors look for some basics:

1. P/E:  preferably under 20

2.  Profits:  Look at the net numbers:  is it in the black?  If it is not a profitable company, why bother investing in it?  Does it have good financial backing while its new product make it to the market?

3.   Are insiders trading?  If the answer is “yes”, this is a great confidence builder.

4.  What does the stock pricing charts look like?  Is it on an upward trend?  Do other investors want to buy it?

5.  What kind of publicity and coverage is it getting?  Is the news positive?  Are other people looking at buying into it, too?

Ironically, one stock actually fits these characteristics:  Ford (F).  If you do the research,  insiders are buying.  A new product, the Fusion,  is fuel sipping, rather than fuel guzzling, and stands to be an alternative, viable car product for this upcoming year.

Does that mean this is a good time to buy Ford?  Consider the following:

1.  Ford had gotten alternative funding, so it will not be at the finger-shaking of the American government.

2.  Credit has loosend, and with the rise of gasoline prices in the past few weeks, people may be looking very seriously at a car with great gas mileage that is new.

3.  True, there is an awful lot of vehicles on the lots that are new to compete with Ford’s newest product, but who wants a gas guzzler now?  None of those vehicles can get the kind of gas mileage Ford’s engineers say that their car gets.  Besides, the other companies either are out of business or may be in the near future.  Ford stands to clean up all of the American business.

4. The Ford family secured private finance when they could have made the company go back to being private.  This is key,because it means that others with more money than us believe in this company. And it also means that the family, with its very deep pockets can still buy out stockholders in the future.

If ever there was a time to buy Ford, it might be now.  However, a cautious investor like me says wait.  Ford has terrible competition right around the corner.

1. Tesla is close to having a handle on their sedan model. Right now their hot rod gets 150 mph.   Of course, it is very expensive.

2.  There is a company in France that has invented a vehicle which runs on air pressure.  They are looking for a company to make the product here in the United States.

3.   Toyota’s vehicles have had good working models on the market right now that are known for being fuel efficient.  These vehicles are reasonably priced, and provide American jobs as well.

If anything, Ford has the advantage of name recognition, of having a vehicle that is on its way out the chute, and an infrastructure already to producing cars.  The unions that provide workers may even be a little more willing to work with Ford in order to keep the union jobs that they have.  However, the death knell for the unions is sounding, too, and Ford will probably not be able to compete long with super high wages on the floor.  These next few years in the car industry promise to be very exciting.

Wednesday’s drop shattered many investor’s hopes that the bull market had come back to the U.S. market.  While the last few months have seen an overall climb, days like today give investors the jitters.  And it should  The last ten months have given the American Investor the worst bull market of this generation.  Investors who have been investing for only twenty years or fewer have seen a drop in the Dow that almost defied reason.  It was a legendary drop, and not only was it unsuspected, it was purely frightening.

Having said that, many investors have been optimistic that this is now the end of such tumultuous stock declines.  And the Dow seemed to have forgotten its recent spookiness, climbing from the low of of 7,000.  Wednesday’s drop was an aftershock after a catastrophic earthquake.

Is th stock market done falling? Martin Weiss of Weiss Research points to historical precedence in his belief that the market is not done bleeding.  He points out that in times of U.S. irresponsible spending, inflation came back to haunt our very existence.  Only the intervention of some very clever leaders at the Federal Reserve  have kept us from going through another Great Depression.

Weiss’ sole goal for his subscribers is that they should not lose money.  It is his belief that in order to retain wealth, losing that money can set a person back for his entire life.  Look at the retirees who suffered at the hands of Bernie Madoff for proof of that.

There’s nothing wrong with that kind of thinking.  But many advanced investors are in the market to make money.  They aren’t interested in over caution as much as to make money.  Having said that, what can be done about a falling market and investors who want to win?

Strategy and great care when stock picking.  Never pick one that is over 20 P/E. Do the proper research. Are insiders buying?  That is a good sign.  Does it have a proprietary service or product?

Not only that, but think ahead.  What sectors are undervalued.  Which stand to gain in case of a rash of inflation?   If the market is going to fall more, then these bargains will probably not be as affected.

In the end, smart investments will win out, especially if the buyers concentrate on undervalued stocks.  In another twenty years, these days will just be a blip on the screen.

To the average city dweller, the plight of the beef farmer is nothing worth even thinking about. It should be. Unless you are a vegetarian, the meat farmer’s life affects you more closely than you realize.  The commodity meat market fluctuates dramatically, sometimes making these farmers a good living, other times they have to wait until prices go back up.

The beef farmer, having enjoyed wonderful prices on his/her cattle for a number of years, has seen a drop in the price of cattle in the past seven or so months.  This deflationary period that caught producers by surprise, but when you can’t pay for your house payment, or car, when you’ve been laid off, you  don’t buy as many steaks.

Beef prices fell.

Some farmers have been holding their herds, hoping the price of beef will climb so they can sell off their herds and at least come out ahead.  By the time you buy the youngstock, then the feed to get them through the winter, and take care of any vet shots needed to keep them healthy, the bill for the initial investment is quite noticeable. Only a sizable profit can make the whole endeavor worthwhile.

Farmers are used to the gamble of their calling.  Sometimes you can buy grain and a good storm will wipe it out.  Other times it’s drought.  Sometimes you can invest in pigs, and the price of pork will drop through the floor.  It’s a risky business and a miracle that anyone even works the land at all!  

For now, the beef farmer waits and hopes for good times to return to the country.  S/he wonders if maybe pigs would bring the farm a better return next years.  Perhaps a specialty meat such as Hereford will bring a better price.  The farmer waits while we enjoy the prices of beef at the store.  Our good fortune is the farmer’s living slowly draining away.

The headline on Yahoo Finance today: Party Like it’s 2007: Investors Prefer Emerging Markets Over U.S. Stocks.  Why is that?

Could it be that the growth in the emerging markets is skyrocketing.  Yes, that would be part of it.  Could it be because the banks here have had solvency issues?  Yes, that would be a part of it, too. But there are so many other reasons that emerging markets look wonderful to investors that even if the United States were not having difficult times, investors should be investing in those markets anyway.

The logic behind this is because emerging markets are poised to outshine all markets in the world.  Emerging markets have not been saddled with the banking woes with which mature markets have had to contend.  So while European and American markets have been falling, investors in emerging markets have seen great returns.

Consider that while the real estate bust has left a virtually dead landscape on the American scene, building and expanding in places such as China, Tiawan, Dubai, and Singapore is bursting forth.  Cranes help the skyscrapers go up, up, up and with it, the promise of business going on in a brisk manner.  This is the fundamental difference in the emerging markets versus the American landscape.  Here unemployment has been at record highs. Not true overseas in some countries.

There are dozens of excellent emerging market funds.  Choose the ones that fit your tolerance for risk, have solid returns and read over the prospectus.  In there you should find the countries in which the particular fund you are analyzing is investing.  That’s critical as some countries such as Russia have serious political difficulties that can lead to the squelching of good, sparkling businesses.

Why not invest in an ETF of Emerging markets?  Because ETFs do not discriminate about which stocks are in their portfolios.  That is fine if the market is moving in the upward direction.  However, a bump in one stock can really hinder the general movement of the whole sector, especially considering political instability.  You want a smart fund manager to pick these stocks for the overall fund.  

Like many sector funds, emerging market successes come and go. However, until the banking industry shrugs off this black cloud hanging over it, some other investment vehicle is going to take the star.  Emerging markets stand to benefit handsomely as the world rushes to join the western hemisphere in all of the bounty this world has to offer.

Fans of Denison Mines were ecstatic in early December when they could pick up this little known silver mining company for $.54 a share.  The smart ones loaded up their portfolio with as many shares as fast as they could.  The result was a fast recovery and big profits for investors.  Today the stock has been hovering between $2.00 and $2.50.

But financial gurus still encourage people to load up on the stock.  Why?  The price of silver has been slowly edging upward, and Dennison stands to become a takeover target or have a stock rise over time due to profitability.  Even though the stock has skyrocketed, it still is considered a grab.

To understand that thinking, it would be worth noting that the stock used to be stable at $7 /share and had at one time climbed all the way to $13/share.  This was before the company had even made a profit.  Now that it is profitable, the company should look even more exciting to investors.

There are always concerns.  Morningstar still has the stock listed with a negative P/E ratio.  So even though the company showed a profit for the first time a couple of years ago, the drop in value of silver during the last quarter of 2008 made profitability sink.  Now that the price of silver has gone back up, profitability should hopefully retain back in.

Insiders are not trading right now, so it might be worth buying on dips if this is a stock you want to add to your portfolio.  Howard Ruff, the long time financial analyst, urges people to buy silver stocks to hyperspeed their portfolio.  Denison is one of many good small stocks to help beef up a solid portfolio.

During the worst of the bear market, Warren Buffet was approached by investment firm after investment firm asking him to buy them out.  There was only one that he bought:  Goldman Sachs (GS).  Now that the market has rebounded a bit, the question for the slow-to-act investor is, “Is GS still a good buy?”

There are several litmus tests of investing.  First is the P/E ratio.  Currently the P/E is at 31, which is much higher than the desired 20.  Another investor’s welcoming sign is when insider trading is taking place.  Right now, Goldman Sach’s executives are not buying.  Most are exercising their options, or giving stock as gifts.  There are no records or recent stock buy. a desirable activity when looking to invest in a stock.

A final thing to note, Goldman Sachs recently reported a loss of profit in the last year.   There is still a profit, but it is not as huge as it used to be.  Morningstar has rated its financial health as a “D.”

If GS takes a dip in stock price, it might be worth grabbing.  Buffet’s analysis of the basic books probably revealed good bookkeeping, as the guru from Omaha is notorious for not buying investment vehicles he doesn’t understand.   If another market correction takes place and the profitability looks better, then GS would be a buy.  But for now, let it pass to find other stocks on sale.