Thursday, September 4, 2008

Two Stocks on Sale

I took a spin through the bargain bin this morning to see if any interesting companies had hit 52-week lows. I love doing this.

Here are two I like:

Corning
The glassmaker is trading at less than five times earnings. It cut its 3Q profit outlook and Wall Street couldn't sell Corning fast enough. Shares fell the most they had in two years. But here's what the company said: Earnings per share (ex items) will be between 43 cents and 45 cents a share on sales of $1.58 billion to $1.62 billion.

Hmm. Those look like decent numbers to me, especially when you consider that its previous forecast was a profit of 48 cents to 51 cents on sales of $1.65 billion to $1.72 billion. Even the worst-case revenue number is better than last year. Lots of companies would be thrilled with just being able to use that color of ink.

Shares closed Friday at $20.54 and are currently at $16.75., a drop of 18.4%%. Even if profit comes in at the low end of Cornings' revised guidance, that still only a decline of 11% on the bottom line. The market has overreacted to this news, and this presents a good buying opportunity.

iShares MSCI Taiwan
I recently wrote about Harvard Management's Co.'s addition of 7.2 million shares of iShares Taiwan, a stake worth $102 million and equal to 3.2% of Harvard's publicly reported portfolio. Shares of this exchange-traded fund (Ticker: EWT) are at their 52-week low.

Not surprisingly, the market this ETF tracks is also in the toilet, having lost 24.6% so far this year. It is also at its 52-week low.

Now, lest you think I'm recommending a purely "technical" move, let me add this: The TAIEX is trading at 10 times earnings. Taiwan is expected to post 4% annual growth through 2012. The Standard & Poor's 500 Index, the U.S. benchmark, is trading at 25 times earnings -- and we're only going to see 2.5% annual growth through 2012. Taiwan is cheap, and this ETF is a shrewd play.

An exchange-traded fund acts like a mutual fund but trades throughout the day like a stock. It's a great way to participate in the Taiwan market, which you otherwise wouldn't be able to access without a bunch of hassle and a shitload of fees. You can buy EWT using a discount broker like Scottrade.

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