Home
>
Stocks & Mutual Fund
>
Value Investing: Selecting From The Bargain Bin

Value Investing: Selecting From The Bargain Bin

Picking a beaten-down stock requires a different kind of selection process. Normally, most companies beaten down this far have no earnings to speak of. Of course, if the company continues to earn money, one can apply normal valuation techniques. By that measure, many of these stocks appear outrageously undervalued: an indication of great buys. But this may also be a red flag that things are "too good to be true".

Another criteria we look at focuses on the breakup value of the company and/or the ability of the company to keep operating in troubled times. For example, debt ratios are important because we want to be sure the company will not be swallowed up in its debt payments. Book Value tells us the value of each share based upon the accountants valuations of assets and liabilities. Sometimes, we also look at cash-on-hand to determine if the company is able to continue as a going concern.

A glance at the high and low price that the shares have sold for in the past may indicate no more than how crazy the market was only a few short years ago. Still, if investors were willing to pay $200 per share for a stock two years ago, it is difficult to believe that it's worth less than a dollar today. Maybe the reality is somewhere in between.

Openwave Systems (OPWV $1.12, High $208; Buy Aggressively), is the top supplier of software that mobile service providers use to offer text and instant messaging to customers. It also provides mobile Web browsing software. The company, which resulted from the merger of Phone.com and Software.com, develops products providing wireless data transfer and messaging, mobile e-mail, and directory services. A recent acquisition of SignalSoft adds a new product line, software that assists cellular users to locate destinations or other users. The company has a loyal subscriber base, and outstanding growth prospects. Openwave, however, is typical of today's bargains. Formerly selling as high as $208 per share (no, that's not a misprint), shares today cost only a little over a dollar. With a book value more than 4 times that amount, virtually no debt, and cash on hand in excess of the stock price per share, there can be no doubt that the shares are now selling at outrageously low prices. We believe these shares represent an outstanding high-risk buy at current prices.

To send comments or to learn more about Scott Pearson's Investment Advisor Services, visit http://www.valueview.net

Scott Pearson is an investment advisor, writer, editor, instructor, and business leader. As President and Chief Investment Officer of Value View Financial Corp., he offers investment management services to a wide variety of clients. His own newsletter, Investor's Value View, is distributed worldwide and provides general money tips and investment advice to readers both internationally, and in the U.S.

scheduled cleaning services Winnetka ..

In The News:

Cybersecurity firm Infoblox reveals that over 90 percent of parked domains now redirect visitors to scams and malware, making simple typos extremely dangerous.

The Fox News AI Newsletter covers the latest artificial intelligence technology advancements, including the challenges and opportunities AI presents now and for the future.

GPT-5.2 is now live for all ChatGPT users with improved coding, writing and image interpretation, with Kurt Knutsson offering his review.

New iPhone replacement scam uses pressure tactics and fake carrier calls to steal devices from buyers. Criminals claim shipping errors and demand urgent returns.

Amazon Ring's new facial recognition feature sparks privacy controversy as Electronic Frontier Foundation critics argue the AI upgrade expands surveillance risks.

New Android banking trojan Sturnus steals credentials, reads encrypted messages and controls devices.

Denmark's 3D-printed student village proves automation builds 36 apartments faster than traditional methods. Skovsporet project shows housing future.

Discover Android's new Sound Notifications feature that alerts you to smoke alarms, doorbells, and baby cries even when wearing headphones.

New SantaStealer malware reportedly threatens holiday shoppers with password theft. This Christmas-themed info-stealer targets browsers and crypto wallets.

The Christmas season brings a surge in Netflix phishing scams targeting shoppers with fake emails. Stacey P received convincing scam but verified account first.

San Francisco Giants invite Jamie Grohsong to throw ceremonial first pitch at Oracle Park after he learned to play baseball with a bionic hand following an injury.

FBI warns cybercriminals are stealing family photos from social media to create fake proof of life images in virtual kidnapping scams targeting victims.

Instagram's new 'Your Algorithm' tool lets you control your Reels feed in real time. The app now gives you power to customize what videos you see.

Major Marquis fintech breach exposes 400,000-plus Americans' data through unpatched SonicWall vulnerability, with Texas hardest hit at 354,000 affected.

Free up iPhone storage fast by clearing large photos and videos from Messages app. Simple steps for iOS users to delete attachments without losing chats.

Scammers are flooding inboxes with fake tracking alerts that mimic real carriers, exploiting the holiday rush to steal logins and personal data.

The Fox News AI Newsletter brings you the latest news on AI technology advancements and the challenges and opportunities AI presents now and for the future.

Texas family reunites with missing 11-year-old cat Grayson after 103 days using Petco Love Lost's AI photo matching technology and community help.

Tired of AI customer service loops? These insider tricks help you escape "frustration AI" and get real human help when you need it most for urgent issues.

Unlock richer audio from your streaming apps with simple tweaks to volume normalization, equalizer settings, and quality preferences for cleaner sound.

Scammers are sending fake Facebook settlement payout emails that mimic legitimate notices from the privacy settlement administrator to deceive users.

Holiday shopping scams surge as fake refund emails target distracted consumers during Black Friday and holiday seasons, costing Americans billions annually.

The AI-powered IRMO M1 exoskeleton features four modes, including turbo, eco, training and rest for hiking, running, cycling and sports with eight-hour battery life.

OpenAI announced upgrades for its ChatGPT Images platform on Tuesday, saying the program can now make more precise edits and produce images more quickly.

Chrome for Android now turns web articles into AI-powered podcast conversations. Get hands-free browsing with Google Gemini's natural audio summaries.

Value Investing: Selecting From The Bargain Bin

Stocks & Mutual Fund