wearmanyhats

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.

Trackback URI | Comments RSS