U.S. stock market investors have struggled this year. The Dow Jones industrial average is down almost 15% since January 1. Many stocks are significantly off their 52-week highs. Fear is a frequently used word right now. The economy, jobs, mortgage crisis, gas prices and the cost of the two wars weigh heavily on Americans.
So what should investors do given these circumstances? Go shopping and buy stock bargains off the clearance table! Look for strong companies with promising earnings growth rates and low price-to-earnings (P/E) ratios.
A search on MSN’s Money Central with the following criteria yield fifteen stocks with significant upside potential: current P/E less than 15; analysts’ projected earnings per share 5-year growth rate greater than 25%; anticipated price appreciation greater than 200% (based on current price, current P/E and projected EPS growth grate); market cap less than $2 billion; and, the Motley Fool CAPS rating of 5.
If these stocks meet analysts’ expectations you will enjoy three-baggers or more with each investment over the next five years. The likelihood of a five or ten-bagger from this group is high.
Happy shopping!
GlobalSCAPE, Inc. (AMEX: GSB) develops and distributes secure managed file transfer software for individuals and business users to safely send files over the Internet. P/E = 7.2; today’s price= $1.42 (82% off 52-week high); expected 5-year EPS annual growth rate = 40%; target price = $7.74; potential gain = 445%.
Cogo Group, Inc., formerly Comtech Group, Inc. (NASDAQ: COGO), provides customized module design solutions for a diverse set of applications and end markets, serving as a gateway for its technology component suppliers to access electronics manufacturers in China. P/E = 7.9; today’s price= $4.52 (80% off 52-week high); expected 5-year EPS annual growth rate = 25%; target price = $14.22; potential gain = 215%.
Sigma Designs, Inc. (NASDAQ: SIGM) is a fabless provider of integrated system-on-chip solutions that are used to deliver multimedia entertainment throughout the home. P/E = 7.4; today’s price= $16.71 (77% off 52-week high); expected 5-year EPS annual growth rate = 32.5%; target price = $70.11; potential gain = 320%.
Interactive Intelligence, Inc. (NASDAQ: ININ) is a provider of software applications for contact centers and voice over Internet protocol (VoIP) applications to enterprises. P/E = 12.1; today’s price= $9.49 (69% off 52-week high); expected 5-year EPS annual growth rate = 30%; target price = $35.49; potential gain = 274%.
Silicon Motion Technology Corporation (NASDAQ: SIMO) is a Taiwanese fabless semiconductor company that designs, develops and markets, low-power semiconductor solutions for the multimedia consumer electronics market. P/E = 7.5; today’s price= $7.31 (72% off 52-week high); expected 5-year EPS annual growth rate = 30%; target price = $27.57; potential gain = 277%.
Navios Maritime Holdings Inc. (NYSE: NM) is a Greek global, vertically integrated seaborne shipping and logistics company focused on the transport and transshipment of drybulk commodities, including iron ore, coal and grain. P/E = 3.6; today’s price= $8.46 (57% off 52-week high); expected 5-year EPS annual growth rate = 25%; target price = $27.47; potential gain = 225%.
Wonder Auto Technology, Inc. (NASDAQ: WATG) is a Chinese holding company and through its subsidiaries is primarily engaged in designing, developing, manufacturing and selling automotive electrical parts in China, specifically alternators and starters. P/E = 13.3; today’s price= $8.23 (38% off 52-week high); expected 5-year EPS annual growth rate = 28%; target price = $29.25; potential gain = 255%.
TechTeam Global, Inc. (NASDAQ: TEAM) is a global provider of information technology outsourcing, enterprise support and business process outsourcing services to Fortune 1000 companies, government entities, multinational companies, product and service providers, and small and medium-sized companies. P/E = 14.6; today’s price= $9.61 (32% off 52-week high); expected 5-year EPS annual growth rate = 25%; target price = $29.85; potential gain = 211%.
KHD Humboldt Wedag International Ltd. (NYSE: KHD) is a Chinese company engaged in industrial plant engineering and equipment supply business and has a royalty interest in the Wabush iron ore mine. P/E = 15; today’s price= $23.00 (50% off 52-week high); expected 5-year EPS annual growth rate = 32.8%; target price = $83.64; potential gain = 264%.
Zhongpin Inc. (NASDAQ: HOGS) is principally engaged in the meat and food processing business in the People’s Republic of China. P/E = 13.9; today’s price= $11.07 (28% off 52-week high); expected 5-year EPS annual growth rate = 30%; target price = $43.35; potential gain = 292%.
EXFO Electro-Optical Engineering Inc. (NASDAQ: EXFO) is a Canadian test and measurement provider in the portable test market segment. P/E = 6.9; today’s price= $4.43 (43% off 52-week high); expected 5-year EPS annual growth rate = 35%; target price = $21.66; potential gain = 389%.
American Reprographics Company (NYSE: ARP) is a reprographics company in the United States providing business-to-business document management services to the architectural, engineering and construction (AEC) industry. P/E = 10.7; today’s price= $16.90 (34% off 52-week high); expected 5-year EPS annual growth rate = 25%; target price = $50.61; potential gain = 200%.
Fuqi International, Inc. (NASDAQ: FUQI) is a designer of precious metal jewelry in China, developing, promoting, and selling a range of products in the Chinese luxury goods market. P/E = 9.6; today’s price= $8.23 (31% off 52-week high); expected 5-year EPS annual growth rate = 25%; target price = $26.66; potential gain = 224%.
Bronco Drilling Company, Inc. (NASDAQ: BRNC) provides contract land drilling and workover services to oil and natural gas exploration and production companies. P/E = 13.6; today’s price= $16.78 (10% off 52-week high); expected 5-year EPS annual growth rate = 25%; target price = $54.37; potential gain = 224%.
ViroPharma Incorporated (NASDAQ: VPHM) is a biopharmaceutical company dedicated to the development and commercialization of products that address serious infectious diseases. P/E = 12.6; today’s price= $12.70 (14% off 52-week high); expected 5-year EPS annual growth rate =30.45%; target price = $48.93; potential gain = 285%.
Pierre Cutler
The Sacramento Executive
Gillian remarked to me this week that I have found my calling - paparazzi.
Today my wife's dream came true. Gillian is a attending the 2008 Democratic Convention in Denver as a national delegate for Barack Obama. The week started off with a bang at the Texas delegation breakfast highlighted by keynote speaker Governor Kathleen Sebelius from Kansas. What an amazing woman! And she was introduced by another awesome woman, a young rising Texas democratic party star - Leticia Van de Putte - State Senator from San Antonio.
After breakfast we picked up Gillian's credentials for the day. What a thrill it was for me to shoot this photo of Gillian signing for her credentials. It was a great moment. 
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