3 stocks that could double by 2011
Finding 100% profits in 12 months isn't out of the question if the cards fall right -- either via huge growth or buyouts.
Finding stocks to buy is simple on paper. It's all well and good to say a stock posting improving earnings is a good buy with upside potential. But how much upside?
The truth is that picking investments capable of dramatic gains -- potentially as much as doubling your money -- is much harder. That's because charts don't offer much support for big moves like this, and efficient market theory argues against such short-term performance.
But finding doublers, while difficult, is not impossible.
One good place to start is screening book value analysis or cash analysis to find a deal, or to find potential acquisition targets. Also, while a turnaround typically takes more than a year to come to real fruition, there are still success stories, such as Chipotle Mexican Grill (CMG), which was trading around $60 in October 2009 and is now up to about $160 per share as of this writing to top even its 2007 highs.
Here's a look at three hot investments that could deliver 100% returns in the
next 12 months if things play out. All of these stocks are actively
traded, with an average volume of more than 1 million shares daily, and they
all have at least some stock options tied to them to reach that profit
But in the world of technology consolidation, the Cisco
(CSCO) data-center initiative is driving tech giants like Dell(DELL),
and others to acquire smaller companies to feed the cloud-computing
future of data and networking. After Brocade and Foundry merged, the
company is now nearly a complete "poor man’s Cisco" that’s a great
buyout target. Post continues after video:
If it competes on price, capturing even 1% more of total market share, that would be a major coup and that would generate massive returns for holders and could spark a 100% run-up from the bottom in the next year or so.
Citigroup (C), one of the "too big to fail" banks, is slowly and sloppily getting out from underneath the government. What’s more, bank pressure under fin-reg is hurting the stock. It’s sitting at the bottom of its 52-week range ($3.11 to $5.07) -- a far cry from its +$50 valuation as recently as 2007.
Energy Conversion Devices (ENER) has been one of the solar players that has not fared out well in 2010 — though it’s hardly the lone loser in the sector. Shares are now at the worst levels in recent memory, around $4.50 as of this writing (52-week range of $3.76-$14.21) but shares peaked north of $60.00 back during the energy bubble of 2008.
The company is said to need cash soon by some, but its cash position
rose to $205 million. And just this week, ENER posted an
above-estimate report and solar sales rose +25% sequentially and +77%
year over year; net revenues rose +19% sequentially and +68% from a
year earlier. While it grew shipments, cut inventory and raised cash
flows, it is targeting sales growth and margin expansion — all signs of
big growth potential despite the fact that ENER is still losing money.
That potential better had be realized, however, if investors will see a
double in this stock. Energy Conversion Devices has fallen hard over
the last few years, and any takeover bid would have to be exorbitant to
win shareholder approval.
Read about three more stocks that could double in 2011 on InvestorPlace.com
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