I am always looking for a good deal, whether that means buying an extra box of Golden Grahams when they're on sale or pouncing on undervalued stocks. The idea that anybody would sell a stock for less than its worth may seem silly, but legendary value investor Ben Graham (no relation to the cereal) tells us, by way of allegory, how we can look out for these situations.
In The Intelligent Investor, Graham introduces readers to a wacky chap named Mr. Market. Mr. Market's game is to pay you house calls on a daily basis to offer to sell you interests in businesses he owns or to buy from you interests in businesses you own. Sometimes Mr. Market will show up at your door very excited and offer you premium prices for your holdings, while at other times he'll be inconsolably depressed about the future and will offer to sell you what he has for as low as pennies on the dollar.
So to find some of the stocks that Mr. Market is depressed about, I've turned once again to The Motley Fool's CAPS investor community. Each of the companies below had been given a five-star rating (the highest) by our community of investors just 30 days ago:
Stock
30-day return
One-year return
Current CAPS rating
Chesapeake Energy (NYSE: CHK)
(23.6%)
(56.6%)
*****
Transocean (NYSE: RIG)
(19.5%)
(56.7%)
*****
Pengrowth Energy Trust (NYSE: PGH)
(12.7%)
(45.2%)
*****
Brookfield Asset Management (NYSE: BAM)
(12.1%)
(57.2%)
****
Woodward Governor (Nasdaq: WGOV)
(11.9%)
(34.5%)
***** Continued... |