Cheap Stocks - S. Florida Business & Wealth

Cheap Stocks

Dear Mr. Berko: My wife and I have $7,000, and we’d like to take a real gamble and buy three or four stocks that sell for less than $10 a share. If we lose, we lose; we won’t be bitter about it. But we think it would be exciting to follow the stocks, chart the price changes each day and be involved in some risky companies that could double, triple or become worthless. We asked our stockbroker for several names, but he’s a goody-two-shoes. He’s been in the business for only two years, and he only recommends stocks that his firm recommends. However, my wife’s individual retirement account and my IRA are up nearly 8 percent in 18 months, and we’re pleased. — SL, Fort Lauderdale, Fla.
Dear SL: The reason a stock trades at the price it does today is that right now, that price is the consensus of what thousands of knowledgeable buyers and thousands of knowledgeable sellers believe it’s worth. And it’s not worth a pfennig more. I know very little about cheap stocks, so I called my old pal Huckleberry Ginsberg, CSA (cheap stock analyst). Huckleberry, after he was refused admission to the Academy of Graduate Embalmers of Georgia, decided to become a certified CSA and studied under Bernie Madoff, Jordan Belfort, Andrew Fastow and Michael Milken. Over the years, I’ve asked Huck to help a few readers like you folks who want to toss the dice. The following are Huck’s recommendations, which he says could either zoom and boom or crash and smash.
Vivus (VVUS-$1.19), founded in 1991, is a $125 million-revenue biopharmaceutical company that is producing innovative next-generation therapeutics for obesity, diabetes and sexual health. Two recent drugs — Qsymia, the first drug for obesity approved by the Food and Drug Administration in 13 years, and Stendra, an amazingly effective drug for erectile dysfunction — have impressive potential. And it seems that Qsymia may also be approved for sleep apnea, diabetes and fatty liver disease. A third impressive drug — Tacrolimus, which is for pulmonary arterial hypertension — just successfully completed the phase 2 process. These drugs may provide VVUS with a significant cash flow stream in the near future. VVUS traded in the high $30s after coming public in 1997 and may make a profit this year. Zacks has a “strong buy” recommendation on it, and Thomson Reuters gives it an “outperform” rating.
Huckleberry also likes Banco Santander (SAN-$6.63). SAN was an unmitigated disaster during and after the Great Recession. Low interest rates, collapsing real estate prices and high unemployment drop-kicked SAN to $3.50, down 70 percent from its five-year high. It has recovered by about 3 points since then. New management smartly cut costs and closed 18 percent of its Spanish branches. SAN, a $51 billion-revenue bank with worldwide offices, derives 45 percent of its profits from the relatively strong economies in Mexico, the U.K. and the U.S. The 24-cent dividend yields 3.4 percent. Huck says it’s a $10 stock.
Radiant Logistics (RLGT-$5.48), founded in 2007, is a third-party logistics company providing multi-modal transportation solutions and services in the U.S. and Canada. RLGT’s clients — consumer goods companies, food and beverage companies, manufacturing companies and retail companies — are served from 18 strategically located offices. This profitable $780 million-revenue company contracts with over 11,000 transportation companies — including motor carriers, railroads, ocean lines and airlines — as part of its carrier network. Three- to five-year earnings growth is projected to be between 18 and 22 percent. Ten years ago, RLGT traded at 50 cents a share. Today most analysts have solid “buy” ratings on the stock.
I wish you enormous luck.
Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at mjberko@yahoo.com. To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.
COPYRIGHT 2017 CREATORS.COM

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