The stock market can be a wonderful thing, helping you grow your wealth and enjoy a comfortable retirement. But it can also fry your precious nest egg if you're not careful. My colleague Morgan Housel has noted that the financial industry "is dominated by cranks, charlatans, and salesmen" -- but very often, we're the ones who most endanger our portfolios and our financial futures with our reckless investment ideas. Permit me to review just a few.
"Wow, this cheap stock is only $0.13 per share! I can buy 10,000 shares for just $1,300!"
Penny stocks -- those trading for less than about $5 per share -- are usually very bad investment ideas, as they can be easily manipulated and are often tied to shaky, unproven companies. Sure, they entice us with their seemingly cheap prices, and the thought of owning 10,000 shares of something is somehow more exciting than owning far fewer shares. But a low price isn't necessarily a cheap price. A $200 stock can be undervalued and more likely to rise than fall while a $0.13 stock can be worth much less than that and be more likely to fall than rise.
Hot Undervalued Companies To Invest In Right Now: Sirtex Medical Ltd(SRX.AX)
Sirtex Medical Limited, a biotechnology and medical device company, engages in the research, development, manufacture, and distribution of liver cancer treatments utilizing small particle technology. The company offers SIR-Spheres microspheres with Yttrium 90 radioactive microspheres for the treatment of liver tumors. It also focuses on the research and development of Radioprotector, Nanoparticle, and Microsphere technologies. Sirtex Medical Limited markets its products in the Asia-Pacific, Europe, and the United States. The company, formerly known as Paragon Medical Limited, was founded in 1997 and is based in North Sydney, Australia.
Hot Undervalued Companies To Invest In Right Now: Hillenbrand Inc(HI)
Hillenbrand, Inc. designs, manufactures, distributes, and sells funeral service products to licensed funeral directors operating licensed funeral homes. The company?s products include burial caskets, cremation caskets, containers, vaults, urns, and selection room display fixturing for funeral homes, as well as other personalization and memorialization products and services, including Web-based applications, and the creation and hosting of Websites for licensed funeral homes. It markets its products under the Batesville and Options brand name through direct sales force in the United States, Puerto Rico, Canada, Mexico, the United Kingdom, and Australia. The company also designs, produces, markets, sells, and services bulk solids material handling equipment and systems for various industrial markets, including plastics, food, chemicals, pharmaceuticals, power generation, coal mining, pulp and paper, frac sand, industrial minerals, agribusiness, recycling, wood and forest pr oducts, and biomass energy generation. It offers feeders and pneumatic conveying equipment under the K-Tron brand name; and size reduction equipment, such as hammer mills, double-roll crushers, wood and bark hogs, chip sizers, screening equipment, pneumatic and mechanical conveying systems, storage/reclamation systems, and specialty crushers and other equipment under the Pennsylvania Crusher, Gundlach, and Jeffrey Rader brand names. In addition, the company manufactures dry material separation machines that sort dry, granular products based on the particle?s size serving various industries, including frac sand, potash, urea, phosphates, chemical, agricultural, plastics, and food processing. The company sells its material handling equipment and systems worldwide through a combination of a direct sales force, and a network of independent sales representatives and distributors. Hillenbrand, Inc. was founded in 2008 and is headquartered in Batesville, Indiana.Advisors' Opinion:
- [By Fitz Gerald]
Hillenbrand is the largest supplier of products to the funeral service industry. Caskets and urns are at its primary products and it sells to 16,000 of the nation's 22,000 funeral homes. This is a demographic trend that is only getting larger with an aging population. The stock yields 4% and trades for only 10 times forward earnings. I like stocks that are monopolies in their industry, pay huge dividends (which they just increased) and trade for a cheap multiple on cash flows.
Best Casino Stocks To Invest In 2014: Solar Capital Ltd.(SLRC)
Solar Capital Ltd. is a business development company specializing in investments in leveraged companies, including middle market companies. The firm invests in aerospace and defense; automotive; beverage, food and tobacco; broadcasting and entertainment; business services; cable television; cargo transport; chemicals, plastics and rubber; consumer finance; consumer services; containers, packaging and glass; direct marketing; distribution; diversified/conglomerate manufacturing; diversified/conglomerate services; education; electronics; energy, utilities; equipment rental; farming and agriculture; finance; healthcare, education and childcare; home and office furnishing, consumer products; hotels, motels, inns and gaming; industrial; infrastructure; insurance; leisure, motion pictures and entertainment; logistics; machinery; media; mining, steel and non precious metals; oil and gas; personal, food and miscellaneous services; printing, publishing and broadcasting; real estate ; retail stores; specialty finance; technology; telecommunications; and utilities. It invests in the form of senior secured loans, mezzanine loans, and equity securities. It also invests in equity securities, such as preferred stock, common stock, warrants and other equity interests received in connection with its debt investments or through direct investments. The firm also invests in United States government securities, high-quality debt investments that mature in one year or less, high-yield bonds, distressed debt, non-United States investments, or securities of public companies that are not thinly traded. Solar Capital Ltd. was founded in November 2007 and is based in New York, New York.