Tuesday, March 5, 2013

3 Deep-Value Stocks to Profit From

Sometimes opportunities in the stock market are where you least expect them. When a company sees a spike in share price on news of a buyout that ultimately fails, that stock is left for dead by most investors...
But you can actually find deep value here.
Let me explain...
After a series of stumbles throughout 2011, the board of directors at health care information provider WebMD (Nasdaq: WBMD) realized that the company may be better off in the hands of a larger digital information company.
An announcement at year's end helped to give fresh life to shares, as they quickly rebounded toward the $40 mark.
But few companies were interested in buying WebMD at that price, let alone at the 20-40% premium that shareholders typically expect in a buyout offer. The company's board announced that plans to sell the company were off the table in the near-term, sending shares quickly to fresh multi-year lows. Eventually, this company dropped off the front page, and its shares fell below $15 as investors moved on to other, timelier opportunities.
Yet it's worthwhile to keep tracking these companies after the crowd has moved on. For example, even in the absence of near-term buyout prospects, value investors started to move back in to WebMD, pushing shares up more than 15% in January. That was a wise move as WebMD recently announced stellar quarterly results, helping shares to post a heady 50% in the past three months to about $22. (more)
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