Best Cheap Stocks To Buy In August 2013

Tags: 2013 Insurance Stocks ,Top Insurance Stocks To Invest In ,Top Stocks For 2013 ,Top Stocks To Hold 2013 ,Top Stocks In 2012

One of the hallmarks of improved investor sentiment is when folks are willing to pay ever greater premiums for equities in expectation of future profit growth. And since the market started rallying from its early March lows, it's clear that sentiment seems to be improving, at least in certain corners of the market.

One indicator of improved sentiment is the rise in forward price-to-earnings multiples. Forward P/E is derived by dividing a company's share price by analysts' average estimate for future earnings per share; for the 500 stocks in the Standard & Poor's 500 Index ($INX), this ratio has risen to 16 from 13 in March, according to The Wall Street Journal Market Data Group.

Such growth is a clear indication that investors are starting to shake off the shock of last year's meltdown and have regained some appetite for risk, says Hank Smith, the chief investment officer of equity at Haverford Investments in Haverford, Pa.

 

As risk appetite grows, Smith says, many bigger, "safer" shares have been left in the dust; that's keeping a lid on the Dow Jones Industrial Average ($INDU). The forward P/E on this bastion of the bluest of blue-chip stocks is less than 14, down from nearly 18 in March, according to Dow Jones Indexes. In other words, as the broader market has gotten more expensive, the Dow has become cheaper.

Such low valuations could lead one to believe that the Dow is just chock-full of blue-chip bargains. In some cases, that's true. But sometimes cheap stocks are a steal, and sometimes they're cheap for a reason.

Here is a look at the Dow's cheapest stocks, as measured by forward P/E, including an assessment as to whether these inexpensive bets are likely to become investor darlings or dogs in the next 12 to 18 months.

Best Cheap Stocks To Buy In August 2013:LeMaitre Vascular Inc. (LMAT)

 LeMaitre Vascular, Inc. develops, manufactures, and markets vascular devices for the treatment of peripheral vascular disease worldwide. The company provides vascular products, including balloon catheters for the removal of blood clots, occlusion, and facilitation of blood flow; carotid shunts for the facilitation of blood flow to brain during carotid plaque removal; remote endarterectomy devices for the removal of blockages in the major arteries of the leg; and valvulotomes for the destruction of vein valves to create vein bypass grafts. Its vascular products also consist of vascular grafts, which are synthetic vessels for use in bypass and replacement procedures; vascular patches that are synthetic and biological patches for use in closing incisions in a blood vessel; vein strippers for single-incision removal of varicose veins; and vessel closure systems for the attachment of blood vessels, primarily for dialysis access. In addition, the company offers endovascular products comprising aortic stent grafts for endovascular repair of abdominal and thoracic aortic aneurysms, and thoracic dissections; manual contrast injectors for the injection of contrast media into blood vessels; modeling catheters for the improvement in the seal of aortic stent grafts; and radiopaque tapes for the improvement in precision of vascular and endovascular procedures. Further, it provides general surgery products, such as laparoscopic cholecystectomy devices for introducing dye into the cystic duct. Additionally, the company distributes Powerlink System, a bifurcated abdominal stent graft; and ArterX Vascular Sealant, a surgical sealant, as well as engages in private label manufacturing. It sells its products through direct and indirect sales forces, and a network of distributors. The company was formerly known as Vascutech, Inc. and changed its name to LeMaitre Vascular, Inc. in April 2001. LeMaitre Vascular, Inc. was founded in 1983 and is headquartered in Burlington, Massachusetts.

Best Cheap Stocks To Buy In August 2013:Select Comfort Corporation (SCSS)

 Select Comfort Corporation develops, manufactures, markets, and distributes adjustable-firmness beds and other sleep-related accessory products in the United States, Alaska, Hawaii, Canada, and Australia. It offers its mattresses under the Sleep Number brand name. The company also provides a line of accessory bedding products, including specialty pillows, mattress pads, comforters, sheets, and leg options. Select Comfort Corporation distributes its products through retail, direct marketing, and e-commerce channels. As of January 2, 2010, it had 403 company-owned stores and 146 retail partner doors. The company was founded in 1987 and is headquartered in Minneapolis, Minnesota.

Best Cheap Stocks To Buy In August 2013:Two Harbors Investments Corp (TWO)

 Two Harbors Investment Corp. operates as a real estate investment trust (REIT) that focuses on investing in, financing, and managing residential mortgage-backed securities (RMBS) and related investments. Its target assets include agency RMBS collateralized by fixed rate mortgage loans, adjustable rate mortgage loans, hybrid mortgage loans, or derivatives; non-agency RMBS collateralized by prime mortgage loans, Alt-A mortgage loans, pay-option ARM mortgage loans, and subprime mortgage loans; and non-real estate financial assets, including asset-backed securities and hedging transactions. The company has elected to be treated as an REIT for the U.S. federal income tax purposes. It generally will not be subject to the U.S. federal income tax to the extent that the company distributes its taxable income to its stockholders on an annual basis and does not engage in prohibited transactions. PRCM Advisers, LLC operates as the manager and advisor of Two Harbors Investment Corp. The company was formerly known as Capitol Acquisition Corp. and changed its name to Two Harbors Investment Corp. in October 2009. Two Harbors Investment Corp. was founded in 2007 and is headquartered in Minnetonka, Minnesota.

Best Cheap Stocks To Buy In August 2013:Dreyfus Strategic Municipal Bond Fund Inc. (DSM)

 Dreyfus Strategic Municipal Bond Fund, Inc. operates as a diversified, closed-end management investment company in the United States. It primarily invests in long-term municipal investments. The Dreyfus Corporation serves as the investment advisor of the fund. Dreyfus Strategic Municipal Bond Fund was founded in 1989 and is based in New York City.

Best Cheap Stocks To Buy In August 2013:Medallion Financial Corp. (TAXI)

 Medallion Financial Corp., through its subsidiaries, operates as a specialty finance company in the United States. The company engages in originating, acquiring, and servicing loans that finance taxicab medallions and various types of commercial businesses. It offers commercial loans to finance the purchase of the equipment and related assets necessary to open a new business, or the purchase or improvement of an existing business; asset-based loans to small businesses; and secured mezzanine loans to businesses in various industries, including manufacturing and various service providers. The company also raises deposits; originates consumer loans for the purchase of recreational vehicles, boats, motorcycles, trailers, and hearing aids; and conducts other banking activities. In addition, it provides other debt, mezzanine, and equity investment capital to companies in various industries. The company was founded in 1995 and is headquartered in New York, New York.

Best Cheap Stocks To Buy In August 2013:Horizon Lines Inc. (HRZ)

 Horizon Lines, Inc., through its subsidiaries, provides container shipping and integrated logistics services. It ships a range of consumer and industrial items, such as refrigerated and non-refrigerated foodstuffs, household goods, auto parts, building materials, and other materials used in manufacturing. The company offers container shipping services to ports within the continental United States, Puerto Rico, Alaska, Hawaii, Guam, the U.S. Virgin Islands, and Micronesia. Its integrated logistics services comprise rail, truck brokerage, warehousing, distribution, expedited logistics, and non-vessel operating common carrier operations. Horizon Lines, Inc. also offers terminal services. The company operates terminals in Alaska, Hawaii, and Puerto Rico; contracts for terminal services in seven ports in the continental United States; and the ports in Guam, Yantian, and Xiamen, China, as well as Kaohsiung, Taiwan. In addition, it offers inland transportation services. As of December 20, 2009, the company owned or leased approximately 20 vessels and 18,500 cargo containers. Horizon Lines, Inc. serves consumer and industrial products companies, as well as various agencies of the U.S. government, including the Department of Defense and the U.S. Postal Service. The company was founded in 1956 and is based in Charlotte, North Carolina.

Advisors' Opinion:

• By Hutchinson At 2011-10-27

  Horizon Lines (NYSE: HRZ) is the largest oceangoing shipping company in the United States with a dominant market position along protected shipping lanes. One look at the steady resurgence in shipping demand, coupled with the company’s improving financials, and it seems the worst is behind them — making now the perfect time to scoop up this stock at a discount.

  HRZ is up almost 30% since September, and I expect it to continue moving higher. Recent data show more goods are being manufactured, and they need to be shipped. Horizon will be one of the biggest beneficiaries.

  Buy HRZ on pullbacks under $5.

Best Cheap Stocks To Buy In August 2013:Investors Capital Holdings Ltd. (ICH)

 Investors Capital Holdings, Ltd., through its subsidiaries, provides various financial services in the United States. It provides broker-dealer services in support of trading and investment in securities, such as corporate stocks and bonds, the U.S. government securities, municipal bonds, mutual funds, and variable annuities, as well as variable life insurance, including provision of market information, Internet trading and portfolio tracking facilities, and records management. The company also offers investment advisory services, such as asset allocation and portfolio rebalancing services. Investors Capital Holdings, Ltd. was founded in 1995 and is based in Lynnfield, Massachusetts.

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