Your Prey for 2006
Below is a MRR and PLR article in category Finance -> subcategory Stock Market.
Your Investment Opportunities for 2006
Introduction
As 2005 wraps up, investors are eagerly anticipating the new year with fresh expectations. A common strategy is to sell losing investments before the year ends to benefit from early tax deductions and to sell winning investments after the new year to defer tax liabilities. With extra cash in hand, investors need smart ideas for where to invest next.
Hunting for Bargains
Exploring stocks that hit a 52-week low can be a fruitful starting point. Tax loss selling has pushed many stocks onto this list, presenting great opportunities for small investors. Without negative fundamental news, these cheap stocks can become attractive investment options. Turnaround investors often target these stocks and research them, as they have the potential to rebound, offering substantial returns. Notable examples from this year include:
- ATI Technologies Inc. (ATYT): Up 39% from its low.
- Seagate Technology (STX): Up 29% from its low.
- Omnivision Technologies (OVTI): Up 68.8% from its low.
- Maxtor Corp. (MXO): Up 45% before being acquired and trading 120% above its low.
While not every stock hitting a 52-week low will bounce back, it remains a valuable research strategy. Here are some potential opportunities for 2006:
Investment Ideas for 2006
Pier One Imports Inc. (PIR)
Specializing in furniture and decorative accessories, Pier One has faced customer defection, resulting in declining sales. Its stock has fallen from a 52-week high of $19.98 to $8.90 per share, a 55% decrease. Although Warren Buffett reduced his stake, the stock still holds potential for recovery.Shanda Interactive Entertainment (SNDA)
For exposure to the Chinese market, consider Shanda, which provides online gaming services, particularly MMORPGs. Despite a 67% drop to $15.00 from a high of $45.40, Shanda boasts a strong balance sheet with more cash than long-term debt and is profitable. With potential market growth, Shanda remains appealing.Navistar International Corp. (NAV)
This manufacturer of commercial trucks and buses faces competition from Paccar and Volvo. With a forward P/E of 6 and a solid balance sheet, maintaining 0% growth in profits could see its stock rise from $28.80.Verizon Communications Inc. (VZ)
Verizon has had a decent profit year, but competition and a high debt load have impacted its stock price, currently at $30.27 with a 5.30% dividend yield. If it maintains profit levels, dividends should remain secure. The company has successfully reduced its long-term debt from $44.8 billion in 2002 to $34.3 billion, improving its balance sheet.Fresh Del Monte Produce Inc. (FDP)
This producer and distributor of fresh fruit is struggling due to pricing weaknesses and higher costs. With management reportedly hiring JP Morgan to explore a potential sale, the company could fetch up to $1.8 billion or $30.70 per share. Currently trading at $23.64, a successful deal could yield a 29.9% return. However, if the sale fails, the stock may face further declines.Conclusion
The start of 2006 presents numerous investment opportunities, particularly among stocks that have recently touched their 52-week lows. By carefully researching and selecting potential turnaround stocks, investors can position themselves for success in the new year.
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