Ah, penny stocks. Quite possibly the world's most dangerous investments ... yet so enticing.
And for good reason. Some of the world's best stock pickers are, at times, penny-stock investors. Peter Lynch, for example, has and still does enjoy the stock market's super-cheap seats. The Royce Low-Priced Stock (RYLPX) fund crushes the market by betting on stocks trading for less than $10 a share. Even the All-Stars in our 100,000-strong Motley Fool CAPS investor-intelligence database dabble in penny stocks. More than a few have been richly rewarded.
Finally, there's our Motley Fool Hidden Gems small-cap service. You won't often find penny stocks on its scorecard, but Foolish colleague Tim Hanson studies rising microcap stars in a segment called Tiny Gems. Current Global Gains pick China Fire & Security (Nasdaq: CFSG ) made Tim's list last August. Its shares have risen more than 30% since.
10 Best Stocks To Own For August 2012:AmTrust Financial Services Inc. (AFSI)
AmTrust Financial Services, Inc., through its subsidiaries, operates as a multinational specialty property and casualty insurance company in the United States and internationally. The company operates in three segments: Small Commercial Business, Specialty Risk and Extended Warranty, and Specialty Middle Market Business. The Small Commercial Business segment provides workers? compensation insurance and an array of commercial package products, including commercial property, general liability, inland marine, automobile, workers? compensation, umbrella, and farm and ranch owners? coverage to small businesses, such as restaurants, retail stores and strip malls, professional offices, owner or contractor of building management-operations, private schools, business traveler hotels/motels, light manufacturing, small grocery and specialty food stores, light contracting, distributors, and laundry/dry cleaners. The Specialty Risk and Extended Warranty segment serves manufacturers, service providers, retailers, and third party warranty administrators that provide coverage for accidental damage, mechanical breakdown, and related risks for consumer and commercial goods. This segment also provides coverage for products, such as personal computers, consumer electronics, consumer appliances, automobiles, cellular telephones, furniture, heavy equipment, homeowner?s latent defects warranty, hand tools, credit payment protection, gap insurance, commercial and residential properties, and legal expenses. The Specialty Middle Market Business segment underwrites worker?s compensation, package products, general liability, commercial auto liability, and other specialty commercial property and casualty insurance for retail, wholesale, service operations, artisan contracting, trucking, light and medium manufacturing, and habitational markets. The company sells its products through a network of independent wholesale agents, brokers, and retail agents. The company is based in New York, New York.10 Best Stocks To Own For August 2012:Kulicke and Soffa Industries Inc. (KLIC)
Kulicke and Soffa Industries, Inc. designs, manufactures, and sells capital equipment and expendable tools used to assemble semiconductor devices, including integrated circuits, high and low powered discrete devices, light-emitting diodes, and power modules. It also services, maintains, repairs, and upgrades its equipment. The company operates in two segments, Equipment and Expendable Tools. The Equipment segment manufactures and sells a line of ball bonders, heavy wire wedge bonders, stud bumpers, and die bonders. Its Ball bonders are used to connect very fine wires, primarily made of gold or copper, between the bond pads of the semiconductor device or die, and the leads on its package; Heavy wire wedge bonders are used in the power semiconductor and automotive power module markets; and Die bonders are used to attach a die to the substrate or lead frame, which will house the semiconductor device. This segment?s Stud bumpers mechanically apply bumps to die, while still in the wafer format, for some variants of the flip chip assembly process. The Expendable Tools segment manufactures and sells various expendable tools for a range of semiconductor packaging applications. Its products include capillaries, bonding wedges, and saw blades. The company?s customers primarily comprise semiconductor device manufacturers, outsourced semiconductor assembly and test providers, other electronics manufacturers, and automotive electronics suppliers in the United States and the Asia/Pacific region. Kulicke and Soffa Industries sells its products through manufacturers? representatives and distributors. The company was founded in 1951 and is headquartered in Singapore.10 Best Stocks To Own For August 2012:Cintas Corporation (CTAS)
Cintas Corporation provides corporate identity uniforms and related business services in North America and Latin America, Europe, and Asia. The company operates through four segments: Rental Uniforms and Ancillary Products; Uniform Direct Sales; First Aid, Safety, and Fire Protection Services; and Document Management Services. The Rental Uniforms and Ancillary Products segment engages in the rental and servicing of uniforms and other garments, including flame resistant clothing, mats, mops and shop towels, and other related items. It also offers restroom cleaning services and supplies; and tile and carpet cleaning services. The Uniform Direct Sales segment involves in the direct sale of uniforms and related items, and branded promotional products. The First Aid, Safety, and Fire Protection Services segment offers first aid, safety, and fire protection products and services. The Document Management Services segment provides document destruction, document imaging, and document retention services. The company also operates document imaging and storage facility that provides solutions to help customers securely store and maintain sensitive business information and data. Cintas Corporation offers its products and services through its distribution network and local delivery routes, or local representatives to small service and manufacturing companies, as well as corporations. The company was founded in 1968 and is headquartered in Cincinnati, Ohio.10 Best Stocks To Own For August 2012:Equity One Inc. (EQY)
Equity One, Inc., a real estate investment trust (REIT), engages in the ownership, management, acquisition, renovation, and development of neighborhood and community shopping centers in the United States. Its shopping centers are anchored by supermarkets, drug stores, or discount retail store chains. As of December 31, 2006, the company?s property portfolio consisted of 179 properties, including 166 shopping centers, 6 development parcels, and 7 non-retail properties. As a REIT, Equity One would not be subject to federal tax to the extent that it distributes at least 90% of its taxable income to its shareholders. The company was founded in 1992 and is based in North Miami Beach, Florida with an additional office in Israel.10 Best Stocks To Own For August 2012:Luxottica Group S.p.A. (LUX)
Luxottica Group S.p.A., together with its subsidiaries, provides luxury and sport/performance eyewear worldwide. It operates in two segments, Manufacturing and Wholesale Distribution, and Retail Distribution. The Manufacturing and Wholesale Distribution segment engages in the design, manufacture, wholesale distribution, and marketing of house and designer lines of prescription frames and sunglasses. It also offers performance optics products, including sun and prescription eyewear, ski goggles, and electronically-enabled eyewear, as well as branded apparel, footwear, watches, and accessories. This segment provides its products under house brands, such as Ray-Ban, Oakley, Arnette, Persol, Revo, Vogue, Oliver Peoples, K&L, Luxottica, Mosley Tribes, Sferoflex, and Eye Safety Systems; and licensed brands comprising Anne Klein, Brooks Brothers, Bvlgari, Burberry, Chanel, Dolce & Gabbana, D&G, Donna Karan, DKNY, Fox, Miu Miu, Paul Smith, Polo Ralph Lauren, Prada, Salvatore Ferragamo, Stella McCartney, Tiffany & Co., Tory Burch, Versace, and Versus. It serves retailers of mid- to premium-priced eyewear, such as independent opticians, optical retail chains, specialty sun retailers, department stores, and duty-free shops, as well as independent optometrists and ophthalmologists. The Retail Distribution segment operates optical and sunglass stores under the brand names of LensCrafters, Sunglass Hut, Pearle Vision, ILORI, The Optical Shop of Aspen, OPSM, Laubman & Pank, Budget Eyewear, Bright Eyes, Oakley ?O? Stores and Vaults, and David Clulow, as well as under licensed brands, such as Sears Optical and Target Optical. As of May 11, 2011, this segment operated approximately 6,350 optical and sunglass retail stores. The company was founded in 1961 and is headquartered in Milan, Italy.10 Best Stocks To Own For August 2012:AmerisourceBergen Corporation (Holding Co) (ABC)
AmerisourceBergen Corporation, a pharmaceutical services company, provides drug distribution and related services to healthcare providers and pharmaceutical manufacturers in the United States, the United Kingdom, and Canada. The company distributes brand-name and generic pharmaceuticals, over-the-counter healthcare products, home healthcare supplies and equipment, and related services to various healthcare providers, including acute care hospitals and health systems, independent and chain retail pharmacies, mail order pharmacies, medical and dialysis clinics, physicians, and long-term care and other alternate site pharmacies. It also offers various services, such as pharmaceutical packaging, pharmacy automation, inventory management, reimbursement and pharmaceutical consulting and staffing services, logistics services, and pharmacy management. In addition, AmerisourceBergen provides scalable automated pharmacy dispensing equipment, medication and supply dispensing cabinets, and supply management software to various retail and institutional healthcare providers. Further, the company offers distribution and other services to physicians, who specialize in various disease states; distributes plasma and other blood products, injectible pharmaceuticals, and vaccines; and provides drug commercialization, third party logistics, reimbursement consulting, data analytics, and outcomes research services for biotech and other pharmaceutical manufacturers, as well as practice management and group purchasing services for physician practices. Additionally, it delivers unit dose, punch card, unit-of-use, and other packaging solutions to institutional and retail healthcare providers; and offers contract packaging and clinical trial material services for pharmaceutical manufacturers. The company serves customers through a network of distribution and service centers, and packaging facilities. AmerisourceBergen was founded in 1985 and is headquartered in Chesterbrook, Pennsylvania.10 Best Stocks To Own For August 2012:Public Storage (PSA)
Public Storage operates as a real estate investment trust (REIT). It engages in the acquisition, development, ownership, and operation of self-storage facilities in the United States and Europe. The company?s self-storage facilities offer storage spaces for lease on a month-to-month basis for personal and business use. Public Storage also has interests in commercial properties containing commercial and industrial rental space; facilities that lease storage containers; and ancillary operations, which include reinsurance of policies against losses to goods stored by its self-storage tenants, retail operations comprising merchandise sales and truck rental operations. As of December 31, 2008, the company had interests in 2,012 self-storage facilities with approximately 127 million net rentable square feet in 38 states; and 181 self-storage facilities with approximately 10 million net rentable square feet in 7 western European nations. It also had direct and indirect equity interests in approximately 21 million net rentable square feet of commercial space located in 11 states in the U.S. As a REIT, the company would not be subject to federal income tax to the extent that it distributes at least 90% of its taxable income to its shareholders. Public Storage was founded in 1971 and is based in Glendale, California.10 Best Stocks To Own For August 2012:JDS Uniphase Corporation (JDSU)
JDS Uniphase Corporation provides communications test and measurement solutions, and optical products for telecommunications service providers, wireless operators, cable operators, network-equipment manufacturers, and enterprises worldwide. The company?s Communications Test and Measurement segment supplies instruments, software, and services to enable the design, deployment, and maintenance of communication equipment and networks. Its product portfolio consists of test tools, platforms, software, and services for wireless and fixed networks. The company?s Communications and Commercial Optical Products segment offers components, modules, subsystems, and solutions that are used by communications equipment providers for telecommunications and enterprise data communications. This segment?s products comprise transmitters, receivers, amplifiers, ROADMs, optical transceivers, multiplexers and demultiplexers, switches, optical-performance monitors and couplers, splitters, and circulators, which enable the transmission of video, audio, and text data through fiber-optic cables. It also provides various laser products, including diode, direct-diode, diode-pumped solid-state, fiber, and gas lasers for micromachining, materials processing, bioinstrumentation, consumer electronics, graphics, medical/dental, and optical pumping; and photovoltaic products, such as concentrated photovoltaic cells and receivers for generating energy from sunlight, as well as fiber optic-based systems for delivering and measuring electrical power. The company?s Advanced Optical Technologies segment offers optical solutions for security and brand-differentiation applications; and thin film coatings for a range of public and private-sector markets. This segment also provides multilayer product-security solutions that deliver overt, covert, forensic, and digital product and document verification. JDS Uniphase Corporation was founded in 1979 and is headquartered in Milpitas, California.Advisors' Opinion:
- By Eri! c Fox At 2011-9-8
JDS Uniphase (Nasdaq:JDSU) also beat street estimates on earnings and revenues when it reported its results in early February, ending up 38% in February. The company reported non-GAAP earnings of $0.12 per share compared to an estimate of $0.09 per share. It should be noted that the company lost $19.5 million on a GAAPbasis.
10 Best Stocks To Own For August 2012:Peet's Coffee & Tea Inc. (PEET)
Peet?s Coffee & Tea, Inc. operates as a specialty coffee roaster and marketer of fresh roasted whole bean coffee and tea in the United States. It offers whole bean coffee and related products consisting of products for home brewing, tea, and packaged foods; and beverages and pastries. The company also provides brewing equipment for coffee and tea; paper filters and brewing accessories; and branded and non-branded cups, saucers, travel mugs, and serve ware. Peet?s sells its products through various channels of distribution, including grocery stores; home delivery, office, restaurant, and foodservice accounts; and company-owned and operated stores. As of January 2, 2011, it operated 192 retail stores in California, Colorado, Illinois, Oregon, Massachusetts, and Washington. The company was founded in 1966 and is headquartered in Emeryville, California.Advisors' Opinion:
- By Bill At 2011-9-12
In addition to selling its product through company owned stores, Peet’s Coffee & Tea distributes its product via a number of established channels including grocery stores, home delivery, office accounts and restaurants. Shares are up 37% so far in 2011.
As unemployment rates remained stubbornly high, Peet’s has generated profits over the past two quarters that have easily exceeded Wall Street estimates. That trend will continue the longer people stay out of work. For the current year the company is expected to make a profit of $1.50 per share growing 23% to $1.84 per share in 2012.
Shares trade for a hefty premium of 38 times current-year estimates. Like Caribou that premium is likely based on the growth potential of Peet’s to expand its retail presence. I would buy this stock as more workers tire of searching for work in the comfort of home and head to the coffee shop instead.
