Millions of Americans turn on their TVs every night asking themselves, "What's the plan, Wall Street? What's the plan?" And Wall Street coaxingly replies, "Shhh, there is no plan."
It doesn't look so good. The sky must be falling. If you listened to everyone else, you'd never get ahead of them though, would you? Buffett, Fisher and Heebner never got their "secret market-beating strategies" from Wall Street. In my time, all the actionable advice I've received has ended up in bankruptcy, and that's why I do my own research.
A majority of people have no idea what's going on much past what they've gathered by cringing through 20 minutes of television. Yet someone who might barely understand balance sheets and income statements is encouraged to invest. This is where the market opens up opportunities for the wise to take advantage of the foolish.
It's not for the faint of heart. It requires the understanding of meta-knowledge, bounded rationality and the theory of constraints. That said, if you stick to a few easy principles and never settle for second best, you'll avoid making needless losses.
Here are three cheap companies that are selling at half of face value.
It is my belief that recession or not, there will always be a market for the consumption of vodka. Central European Distribution Corporation (CEDC), a seasonal company looking to ramp up revenues over the next two statistically larger quarters, is priced to grow at a drunken 7.3%. Analysts have CEDC growing at a minimum of 16%, with most estimates coming in significantly higher. I like to look at the worst-case scenario. The last 10 years of revenues and earnings are below. Magical if you ask me.
The three-month RSI is 17. My advice is buy. Don't consider selling this till at least the spring or $100. Any less and you're cheating yourself. I have CEDC growing optimistically at 30%. Zacks ranks it a 2, StockScouter ranks it a 9, analysts are saying it's a strong buy, and it's the season for drinking. Drink up.
If you like this kind of look at a company combined with analyst estimates and investor consensus, take a look at Cognizant Technology Solutions (CTSH). It's currently at $22.11. Don't sell till $40. Also check out Manitowoc (MTW), currently at $15.54. Don't sell this one till $30.
Honestly, with the market looking like it is right now, just putting money in is a good idea. At least it was on Tuesday. The probability that Congress takes action when the president stands up and makes a statement is worth noting.
There will always be pessimists pointing down to the Dow at 8000. My belief is that something needs to happen. Congress was designed to take its time making policies, and the market is known to freak out.
It's the height of the madness. Volatility is through the roof. Drink up!
To see more of my ideas, check out GlenBradford.com.
Know What You Own: Manitowoc operates in the industrial goods industry. Some of the other stocks in its field include Hitachi (HIT), Terex (TEX), Deere (DE) and Caterpillar (CAT). These stocks recently closed at, respectively, $68.94, down 0.7%; $29.43, down 3.6%; $46.30, down 6.5%; and $56.95, down 4.5%. For more on the value of knowing what you own, visit TheStreet.com's Investing A-to-Z section.
Author owns CEDC, CTSH, MTW.
