Thursday, January 2, 2014

5 Surprising Stocks That Are Falling - and Don't Deserve to Be

Aleyska, or Trans - Alaska Pipeline, Chugach Mountains, north of Valdez, Alaska, USAAlamy The market may have rallied remarkably this year, but there are plenty of stocks that never got the memo. Dozens of stocks are hitting fresh 52-week lows these days, and some of them aren't as bad as their low stock prices would seem to suggest. Last week, I took a look at five stocks that didn't deserve to be hitting new 52-week highs. Now it's time to flip things around and look at five stocks that hit new 52-week lows last week that are prime candidates to bounce back. Dice Holdings (DHX) 52-Week Range: $6.83-$10.43 Dice operates several industry-specific career and employment websites, including the namesake Dice.com for tech jobs, ClearanceJobs.com for jobs that require security clearance, and Rigzone.com for jobs in the oil industry. It's a novel approach to helping folks in specific sectors network, and naturally this is magnetic to potential employers. The success of LinkedIn (LNKD) may have taken some of the shine off Dice, but the company's still finding ways to grow. Analysts see revenue climbing at a slightly better than 6 percent clip this year and again in 2014. Kinder Morgan (KMI) 52-Week Range: $32.30-$41.49 Kinder Morgan watches over the country's largest network of natural gas pipelines. Thanks to its reputation as a cleaner energy source than coal or petroleum (and the massive upsurge in U.S. production thanks to the fracking boom), natural gas is a growing source of domestic energy. Even commercial vehicles are starting to be powered by liquefied natural gas. Kinder Morgan is growing, but it has missed Wall Street's profit targets in each of the three past quarters. That's been enough to scare off some investors. However, the falling share price has also made Kinder Morgan's healthy dividend that much more compelling. The stock's yield of 4.6 percent is too rich to ignore here. Liquidity Services (LQDT) 52-Week Range: $20.37-$44.40 Liquidity Services prides itself as a problem solver. It runs a marketplace for items that need to be cleared out, and that's a blessing for government and commercial enterprises with overstocks that are seeking a way out of their surplus of goods. Business has been softening. Analysts see revenue slipping 10 percent this quarter, clocking in flat for the entire year. But the dip should be short-lived, as the market's holding out for growth next quarter, accelerating throughout the year. LightInTheBox (LITB) 52-Week Range: $6.18-$23.38 Saying that LightInTheBox is at a 52-week low may be stretching things. The China-based online retailer has only been trading since going public at $9.50 in June. However, the stock quickly soared into the low $20s before crashing on back-to-back quarters of posting disappointing results. LightInTheBox sells fancy dresses and housewares. It offers free shipping worldwide, and that has helped it become a hit outside of China. More than 80 percent of its sales are going to Europe and North America. Its first two quarters as a public company were indeed bad, but LightInTheBox is still growing, targeting sales growth in the high teens during the holiday quarter. That's not too bad. The market was just spoiled at the time of the IPO, but now that expectations have been adjusted, it will be that much easier for LightInTheBox to live up to the hype. Rackspace Hosting (RAX) 52-Week Range: $32.62-$81.36 When it comes to Web hosting, Rackspace has emerged as a popular provider for companies and webmasters looking to sustain an online presence. Rackspace provides conventional hosting services on its growing fleet of servers, and it also offers a platform for the growing number of cloud-based hosted solutions. Rackspace now has more than 100,000 servers. Rackspace is growing at a healthy pace. Revenue climbed 16 percent in its latest quarter, and that's essentially what the analysts see through at least next year. Earnings have been going the other way. That's the competitive nature of this growing industry, but at least Rackspace is still posting strong growth. Don't let the low share prices fool you. All five of these stocks are in better shape than their share prices suggest. (F) Ford has been making cars through a fair number of cicada emergence cycles, and that's not going to change. Cars will naturally look materially different in 17 years; by then, it wouldn't be a shock to see self-driving cars in widespread use. Ford should continue to have a major role in the industry. Naturally, there may be trends moving away from automobiles in general. The urbanization trend -- which features people flocking back to metropolitan areas where mass transit makes car ownership less important -- will likely continue. U.S. automakers may also continue to lose market share to overseas rivals. However, it's hard to bet against Ford. Remember, Ford was the only major U.S. automaker to avoid the government's bailout in 2009, proving its mettle during tough times. Ford (AAPL) This pick will be controversial given the way that Apple's stock has been beaten down since peaking late last year. But the consumer tech giant is a survivor. Since the last Brood II invasion we saw the iPod in 2001, the iPhone in 2007, and the iPad in 2010. Yes, Steve Jobs is gone, but denying Apple its historical bent to raise the bar in consumer electronics would be a costly mistake. Apple will find a way to innovate its way to growth and margin expansion. Apple (WMT) The world's largest retailer has plenty of detractors. Critics argue that Walmart destroys mom-and-pop businesses and treats its employees unfairly. However, 60 percent of the people in this country will visit a Walmart this month. Think about that. Walmart rang up more than $469 billion in sales last year. Think about that, too.

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