3 Stocks Under $5 Worth a Look
Mastery presents three stocks that are trading close to $5 we believe are worth your attention. The stocks in order of importance are Nokia Corporation (NYSE:NOK), The Wendy's Company (NASDAQ:WEN), and Marchex Inc. (NASDAQ:MCHX).
Everyone has thrown Nokia (NOK) in the garbage and no one believes the company will pay out its current 10% annual dividend yield. However, NOK shares jumped 8% on Tuesday out of no where and closed at $5.64. We believe Tuesday's jump was due to traders placing bets on the future success of its new 4G LTE phone the Lumia 710 running on Windows 7.5. The Lumia is selling for $49 (with contract) and we anticipate it's going to be a big money maker (see review below). From now on, Nokia is partnering with Microsoft (MSFT) for its operating systems. We like the odds with Windows 8 due out later this year, the Lumia 710 is just the beginning.
Nokia shares have traded between $4.46 and $11.75 over the past 12 months. Nokia trades with a P/E Ratio of 23.4 and EPS of 0.22. Even with Tuesday's jump Nokia shares are only 20.92% from its 52-week low.
Marchex Inc (MCHX) hit a new 52 week low of $4.99 and closed at $5 even. MCHX shares have traded between $5.08 and $10.87 over the past 12 months. Marchex trades with a P/E Ratio of 88.6 and EPS of 0.06. Thanks to its beat up share price MCHX now pays a 2 cent dividend for a 1.6% annual yield.
Marchex has been on a steady decline - since last summer, the stock has lost almost half of its value. The company generates revenue from two primary sources: Local Advertising Services and Publishing Network. During the year ended December 31, 2009, revenue from its Local Advertising Services accounted for approximately 66% of total revenues.
We believe MCHX has been sold off to the extreme, but the company is not dead by any means. Here's what smallcapnetwork.com had to say about them last month:
Marchex is a performance marketing company that delivers call and click-based advertising products to advertisers. For 3Q2011, Marchex reported that revenue rose from $24.2 million for 3Q201o to $39.9 million while GAAP net income came in at $1.2 million verses a net loss of $547,000 for the same period the year before. However, investors should note that Marchex did sell a small number of non-strategic domains for $2.5 million while net income came in at $141k, $576k and $645k for the previous three quarters. Otherwise, investors should note that Marchex’s Chairman and CEO has pointed out that since the launch of the company’s Pay-For-Call product in July of 2009, every quarter has validated the company’s decision to focus on Digital Call Advertising and making a bet on the emergence of mobile and other call media sources (along with deep call analytics). On Wednesday, Marchex fell 2.07% to $5.67 (MCHX has a 52 week trading range of $5.53 to $10.87 a share) for a market cap of $211.3 million (source: smallcapnetwork.com)
WENDY'S CO. (WEN)
The Wendy's Company (NASDAQ:WEN) shares closed Tuesday at $5.31. This company needs no introduction, it's a national household name and its stock is trading 19% from its 52-week low. Wendy's (WEN) shares have traded between $4.29 and $5.62 over the past 12 months.
Wendy's shares are trading near 2008 levels, and Wall Street has all but abandoned the company. Mastery likes the company's cash position and if management can get its act together -- this stock could be a triple-bagger.
Check out Fool.com's article Has Wendy's Made You Any Real Money? by Seth Jayson if you are considering buying WEN. He has done his homework and its worth your time (click to read at fool.com).
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