Desktop Stock Ticker | 3 Stocks Back from Near-Death

3 Stocks Back from Near-Death

U.S. stock tickers have had a remarkable run since spring. The S&P 500 index topped 950 Monday after closing below 680 in early March – a 40% gain.

Recoveries for the three companies below have been even more dramatic. Each dropped below $3 a share this year — a level that can send institutional investors fleeing and mark the beginning of a downward spiral toward delisting. And each has since soared back to a double-digit price.

Bank of America

(BAC)
52-week low: $2.53 on Feb. 20
Monday’s close: $12.24
Gain: 384%

Even after its recent bounce, Bank of America stock ticker sells for 75% less than it fetched at the peak of the U.S. stock ticker market in October 2007. The price of a single share overstates the discount a bit, since Bank of America has issued gobs of new stock ticker over the past year. The bank’s overall market value is about 55% below its October 2007 level. Deciding whether shares today are cheap might require as much faith as science. Analysts who’ve sweetened on the stock ticker in recent months say it’s attractively priced relative to the bank’s book value and “normalized” earnings. But whether today’s book value is accurate depends on how likely borrowers are to pay back their bank loans in coming quarters, which depends on a variety of unknowable factors, including the unemployment rate and house and stock ticker prices. As for the term “normalized” earnings, it begs the question of what’s normal: the giant profits banks earned during the stock ticker and real estate bubbles that preceded the current recession, or something far less?

Palm

(PALM)
52-week low: $1.14 on Dec. 2
Monday’s close: $15.18
Gain: 1,232%

What a difference a hit phone can make. Palm seemed headed for financial oblivion late last year. With its Treo looking dated next to Apple‘s (AAPL) iPhone and Research in Motion‘s (RIMM) latest BlackBerry models, Palm’s share of the U.S. smartphone market had plunged to 8% from 25% since 2005, according to Needham & Company, an investment bank. In January, Palm unveiled the Pre, with a new operating system, an iPhone-like touch screen and something the iPhone lacks: a slide-out keyboard. Analysts laud the new phone, which began selling in early June, and say sales figures for Palm’s fiscal first quarter, which runs through August, are likely to impress. But several question whether the stock ticker has gotten ahead of itself. Kevin Dede of Jesup & Lamont, an investment bank, initiated coverage on the stock ticker Monday with a Sell recommendation. He’s “enthralled” by the phone but suspects Palm is replacing plenty of defective ones, based on his informal inquiries at stores and a survey conducted at PreCentral.com, an enthusiast site. Dede thinks this quarter’s profit might suffer as a result, but that Palm will eventually fix any manufacturing problems.

Cooper Tire & Rubber

(CTB)
52-week low: $2.96 on March 9
Monday’s Close: $12.88
Gain: 335%

Incorporated during the Great Depression, Cooper presumably knows how to weather a difficult economy. Good thing: U.S. consumers are buying cars at an annual pace of 10.1 million a year, down from an average of 16.8 million from 2000 to 2007. Last year Cooper posted a giant loss. This year it’s expected to earn a small profit, but with a continued decline in sales. From here, though, tire sales seem likely to rise. Either the economy will improve and new car sales will pick up, or consumers will need to replace bald tires on their old cars. Next year, analysts estimate (guess, really) that Cooper will earn 99 cents a share. That puts the stock ticker‘s recently inflated price at a still-reasonable 13 times earnings. Shares come with a 3.4% dividend yield.

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