Building the Waiting List

In my search for cheap stocks, once I have surveyed the opening pages of Value Line, which cover stocks' median appreciation potential, and surveyed sectors to get a broad overview of the markets, I like to dive right into the tables in the back. Each week, Value Line posts lists of stocks that have high price-to-earnings ratios, low P/Es, highest yield and that sort of thing. Several of these lists, such as lowest price-to-book-value and highest projected total returns, have produced some very profitable ideas over the years, and I check them faithfully every week.

This week, I turned first to the list of stocks that trade at the widest discount to book value. The first two stocks listed are both in the shipping industry, a sector that I favor, and I already own several names in the space. Genco Shipping (GNK) and Eagle Bulk Shipping (EGLE) are both very cheap and trade for a fraction of book value, and I have been following them for over a year now. Unfortunately, they do not have the types of improving fundamentals or solid balance sheet that I favor. Both have severe credit issues, and there is simply no margin of safety to be found in the shares right now....544 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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