3 Stock "Buys" With Single-Digit Prices

A stock's price -- with no other information -- should mean nothing to investors. It doesn't necessarily reflect a company's size; Citigroup sells for less than $5 a share and yet is the 18th-largest U.S. company by market value because it has so many shares outstanding. Nor does a low price signal a modest valuation. InfoSpace ( INSP: 8.26, -0.02, -0.24% ) , an internet search specialist, sells for just over $8 per share, but that's more than 50 times its projected 2011 earnings per share, making it three times as expensive as the average U.S. stock.

Yet, although a stock's price proves little on its own, a 2006 analysis of 81 years of trading data found that stocks priced below $5 a share beat more expensive stocks (above $20 a share) by more than 0.8 percentage points per month, or 10 percentage points a year. Results for a data set that dates back only to the 1960s, but incorporates more companies, showed a smaller, but still significant difference: Low-priced stocks returned about 0.5 percentage points more per month than high-priced stocks. Perhaps that's why companies seem eager to split their shares when the opportunity arises, and why the average stock price hasn't changed much since the Great Depression, even though consumer prices since then have multiplied more than tenfold.

Below are listed three U.S. stocks with single-digit prices and glowing recommendations, on average, from the analysts who cover them. "Buy" recommendations don't necessarily predict good returns, studies show, but recommendation upgrades do. Opinions on these shares have turned sweeter over the past eight weeks. (more)

8 Companies with a Ton of Cash: ACN , ADBE , ADSK , BBBY , BIDU , EXPD , ORCL ,SNDK

It's no secret that corporations are sitting on huge piles of cash these days. In fact, by the latest count companies have close to $2 trillion in cash and other liquid assets on their books.

While it's understandable that companies are a little gun-shy after the recent economic downturn, as the economy improves the issue becomes: what do these companies do with all of that dough?

That's not a bad problem to have.

Companies with lots of cash on hand are able to capitalize on various investment opportunities fairly easily. They can make acquisitions or grow organically without going to the costly debt or equity markets in order to fund their growth. And if they do seek financing, investors will require much lower rates of return than if the company was cash-strapped.

Secondly, companies with plenty of cash can reward shareholders through stock buybacks or dividend payments. This is especially true of mature companies. Larger companies have fewer growth prospects, so it makes sense to return an increasingly large portion of earnings to shareholders.

Think about Microsoft (MSFT - Analyst Report) in the 1990s compared to the 2000s. The company grew tremendously for several years, but inevitably that growth slowed. Now the company rakes in the dough and pays out a decent amount to its shareholders. It began paying a dividend in 2003 and paid a special dividend of $3.00 per share in 2004. The company recently raised its quarterly dividend 23%. Expect more dividend hikes in the future. (more)

Roubini : The housing sector is double dipping

Housing Double Dip

Steve Forbes: Nouriel, good to have you back again. And before we get an update from you, I just want to promote your book on how to cope with the crisis and get a crash course. And while the economy's maybe potentially crashing, your book went up in terms of sales. Congratulations.

Nouriel Roubini: Oh, thank you. It's a pleasure being back with you and having this dialog today.

Forbes: As a writer myself, I envy your success.

Roubini: Thanks.

Forbes: Well, I have to start off--over the holidays you bought a very nice apartment in New York for $5 million or so. People are wondering, is that a sign the market is turning or you just found something you liked and bought it?

Roubini: Well, my view on housing is that actually the housing sector is double dipping. Of course you can find a buy at a price much lower than listed, then it is a buy. But if you're looking at the macro data, where in the spring of last year, a time where prices were going up and demand and supply was increasing, but that was all driven with the fact with these first-time homebuyer tax credit.

So anybody who wanted to by a home, bought it by April. As soon as their tax credit expired, demand collapsed, prices started to fall again. So demand is falling, supply is increasing because there is a shadow inventory of millions of not yet foreclosed homes. Therefore, prices are going to fall even further.

So if there is one sector of the economy I would say that is already double dipping, that certainly is the housing and real estate sector. So unfortunately, what is locally working might not be at a macro, national level still working. (more)

Peter Schiff: China to Unleash US 'Inflation Nightmare'

Forget about official inflation figures, which show consumer prices rose only 1.5 percent last year, says Peter Schiff, president of Euro Pacific Capital.

“Inflation is here,” he tells Yahoo’s Tech Ticker.

“The first place you would expect to see it is in commodities, particularly agricultural commodities and precious metals. That’s exactly what we’ve seen.”What’s causing inflation? “It’s all because of (expanding) money supply, quantitative easing and stimulus,” Schiff says.

"This is the consequence of what the government has done to try to stimulate the economy by running huge deficits. The Fed prints money to buy up Treasurys. That expands the money supply and diminishes the value of money.”

So it’s we citizens who pay for government stimulus efforts. “We are paying for the government through a debased standard of living and a higher cost of living,” Schiff says. (more)

Jay Taylor: Turning Hard Times Into Good times

Ron Paul, Robert Prechter, Ian Gordon, Bob Hoye, John Williams, Larry Parks and Eric Sprott provide insights into the global economic malaise. All offer some hope for YOU, IF you can see through the deceit of policymakers. Paul and Parks explain that defiance of the Constitution's requirement to use gold and silver as money is leading to economic ruination. Prechter, Gordon and Hoye warn of a very severe deflationary future. Hoye believes the markets will require policymakers return to a gold-based currency. But Williams makes a strong case for hyper inflation in a debate with Bob Hoye. Paul and Parks also warn of inflation. Investor Eric Sprott is not as sure as some of this week’s other guests on the inflation/deflation issue but he, like all the other guests, is absolutely sure gold and silver are essential to preserving wealth. Eric makes a very strong case for silver outperforming gold. Jay Taylor's severe cold prompted a replay of the above noted guests this week. (click here for audio)

How to Trade Gold Selloff

Watch This Hedge Fund Manager's Terrifying Video Of What The World Will Look Like When The Dollar Collapses

Damon Vickers, a hedge fund manager in Seattle, has made a terrifying video (embedded below) of what might happen if the world markets crash. He says it happen any day now, at any time -- even right now!

Because there's a risk someone might take Vickers' apocalyptic warning too seriously, we'll tell you the good news ahead of time. Vickers has written a book that has all the answers. Just buy the book, and you'll be fine.

(Also, if possible, go back in time to June and follow the genius advice he gave on CNBC, which totally panned out exactly as he planned.)

If you don't have time to watch the video, Vickers' apocalyptic prediction goes a little something like this:

The Fed prepares to do its QE trick at the Wednesday bond auction, pushing the dollar down even more. China announces that it won't buy any more U.S. notes until the U.S. stops devaluing the dollar. The news hits the wire... Traders around the world become net-sellers of equities, bonds, and Western currency... No one has any liquidity, except China... Within minutes, electronic trading systems short circuit under the load of sellers... Some traders choose oblivion, others join the rash of suicides, others slip away quietly and are never heard from again... Panic sweeps the globe... most nations activate their police and militia to quell angry rioters... Elsewhere, the fisherman still fishes, and the farmer still hoes his fields, and the baker still bakes his bread... The world now shares a common currency... and prepares for a global currency exchange and debt re-set.

-- Which all happens in 14 days. (But remember, get the book and you'll be fine.)