Posted on 15 December 2012.
There are a number of stocks under $5 per share that are candidates for under $5 stocks to buy in 2013 to catch stock price rebounds to book trading profits. It is not all that unusual for beaten down stocks that are trading below $5 per share at the end of a year to rebound due to the “January Effect”, which brings fresh bargain hunting money into the stock market that typically causes a rally in beaten down small cap stocks trading under $5 per share. In addition to bargain hunting money, short covering and long term investors looking to park their money in new stocks often causes stocks under $5 per share to rally during January, which is why it is important to identify under $5 stocks to buy in 2013 ahead of the stock market herd.
The following are some ideas for under $5 stocks to buy in 2013.
Groupon (GRPN) – After undergoing an Initial Public Offering in 2011 at $20 per share, GRPN has fallen below $5 per share. With a business that continues to grow, plans to offer merchants value added services beyond just daily deals, search capability in development for its website, GRPN presents a good opportunity for a 2013 rebound.
MeetMe (MEET) – MEET (formerly QuePasa / QPSA) was one of the first publicly traded social networking stocks, and briefly traded above $10 per share in 2011. Because more social networking companies have gone public and the social networking mania has eased, MEET has fallen below $5 per share. However, this has not stopped MEET from growing, and with growing revenues and a price to sales ratio approaching 1, MEET may move back above $5 during 2013.
AK Steel Holding Corporation (AKS) - With a forward Price Earning (P/E) ratio of 16.48 and earnings per share expected to grow over 100% in 2013, AKS has a good chance of breaking out above the sub-$5 trading range that it settled into.
Alcatel-Lucent, S.A. (ALU) – ALU has spent a considering time in the sub-$5 price range. While 2013 might not be the year that ALU trades above $5, the stock could make a nice percentage move higher off its current price just above $1 per share, due to an expected earnings per share gain of over 50% in 2013.
Nokia Corporation (NOK) - NOK was a darling of Wall Street for years, and then fell out of favor and into the sub-$5 basement, as their mobile phones lost popularity to rivals, such as Apple and Samsung. However, 2013 might be the year that NOK breaks out above $5 per share, as earnings per share are expected to grow over 80% in 2013.
Sirius XM Radio Inc. (SIRI) – SIRI was a true penny stock during the depths of the 2008/2009 financial crisis, trading below 15 cents per share. Since then, SIRI has become profitable and benefited from the surge in new automobile sales that has vastly expanded the company’s opportunities to gain new listeners, as many new cars come with Sirius XM capable radios. With SIRI’s earnings growth rate expected to exceed 25% for years to come, SIRI may continue its climb out of sub-$5 territory during 2013.
There is no shortage of under $5 stocks to buy in 2013. The key consideration when deciding which under $5 stocks to buy in 2013 is the earnings prospect of the companies, since earnings is what ultimately drives stock prices higher.
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