Sometimes you may want to invest just for fun. But when it comes to mad money, don't bet too much, and apply a little method to your madness. One strategy is to pick down-on-their-luck stocks that once traded for more and that have real revenues -- even though profits are currently scant or nonexistent. You're betting that the market has overreacted, which is often a safe bet, and that a turnaround is just a couple of quarters' worth of good results away.
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TiVo (symbol TIVO, recent price $6) invented digital TV recording. Like Xerox and FedEx, its name is used as a verb, so its brand recognition is strong. But the stock has lagged because of fears that bigger communications powers will muscle the business away or force TiVo to spend its scarce reserves to defend its base of 4.4 million customers. TiVo's counterattack includes selling advertising, launching a high-definition recorder and signing marketing deals with Comcast and other media companies. TiVo first offered its stock at $16 in 1999, but at $6, it's worth a shot.
UQM Technologies (UQM, $4) makes parts for electric-vehicle motors and performs contract electric-propulsion research. It's a tiny company, with annual revenues below $10 million, but product sales rose 53% last year and contract-research revenues rose 37%. UQM's idea is to help develop electric-powered motors for heavy trucks, military vehicles and off-road SUVs. The company is speculative because it's small and loses money, but it has good customers (including the U.S. government and Air Force) and the numbers are moving in the right direction.
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Omnova Solutions (OMN, $5) makes, among other things, simulated marble and granite countertop surfaces. If you've looked at replacing a Formica countertop recently, you know that such synthetic-stone surfaces are all the rage. The company swings from small profits to small losses, but its financial picture is improving.
As for our $1,000 low-price stock picks last year, we called two out of three: Design Within Reach rose from $5 to $6, and Hanger Orthopedic Group was up from $7 to $12. Phoenix Footwear was the one loser, dropping from $5 to $2.75.
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Fed Cuts Rates Again: What the Experts Are SayingFederal Reserve The central bank continued to ease, but a new administration in Washington clouds the outlook for future policy moves.
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Fed Goes Big With First Rate Cut: What the Experts Are Saying
Federal Reserve A slowing labor market prompted the Fed to start with a jumbo-sized reduction to borrowing costs.
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Stock Market Today: Stocks Retreat Ahead of Nvidia EarningsMarkets lost ground on light volume Wednesday as traders keyed on AI bellwether Nvidia earnings after the close.
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Stock Market Today: Stocks Edge Higher With Nvidia Earnings in FocusNvidia stock gained ground ahead of tomorrow's after-the-close earnings event, while Super Micro Computer got hit by a short seller report.
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Stock Market Today: Dow Hits New Record Closing HighThe Nasdaq Composite and S&P 500 finished in the red as semiconductor stocks struggled.
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Stock Market Today: Stocks Pop After Powell's Jackson Hole SpeechFed Chair Powell's Jackson Hole speech struck a dovish tone which sent stocks soaring Friday.
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Stock Market Today: Stocks Drop Ahead of Powell's Jackson Hole SpeechSentiment turned cautious ahead of Fed Chair Powell's highly anticipated speech Friday at the Jackson Hole Economic Symposium.
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Stock Market Today: Stocks Rise After Jobs Data Lifts Rate-Cut OddsPreliminary data from the Bureau of Labor Statistics shows job growth was lower than previously estimated.
