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11 Stocks That Trade for Under $11 on 11/11/11

Frank Byrt|Analyst
Friday, 11 Nov 2011 | 3:10 PM ET

Numerologists say today is a lucky day, given the "11/11/11" date. Superstitious investors who have come to believe that traditional fundamental analysis methods are haywire in the seesawing marketplace may want to consider promising stocks with beaten-down prices of under $11.

Small-cap stocks, which typically include those trading for less than $11, are down 5.2 percent this year, compared with the large-cap bellwether S&P 500's 0.6 percent decline. But the small-cappers show signs of having bottomed as they are up 9.7 percent in the past month and 5.4 percent over 13 weeks, according to Morningstar.

Outside the New York Stock Exchange in lower Manhattan.
Photo: Oliver Quillia for CNBC.com
Outside the New York Stock Exchange in lower Manhattan.

To celebrate the number "11," what follows is a synopsis of 11 stocks trading for under $11 that boast trailing 12-month revenue growth of 50 percent to 100 percent or projected earnings per share growth of at least 15 percent. Many are smaller companies.

If there's a rebound in the economy over the next few months, they stand to benefit even more than they have this year. So count your lucky stars. Or wait till Dec. 12 of next year for "12/12/12," or 12 stocks that trade for less than $12.

Vonage Holdings is a provider of broadband-telephone services based on the Voice over Internet Protocol communications standard. Its shares are trading at $2.73, having risen 20 percent this year, resulting in a market value of $607 million. Vonage has a three-year average annual return of 42 percent.

Last week, Vonage reported that third-quarter earnings tripled to $24 million.

Graphic Packaging makes paperboard and integrated paperboard products for beverage and other consumer-products packaging. Its shares are trading at $4.27, up 8.5 percent this year, resulting in a market value of $1.7 billion.

The shares have an average annual return of 37 percent over the past three years. Two weeks ago, the company reported that third-quarter net income jumped by a third to $33.8 million.

Interpublic Group is one of the world's largest advertising and marketing companies. It owns hundreds of individual agencies worldwide that focus on specific functions such as ad creation, brand strategy, media planning and public relations.

Now trading at $9.40, its shares have a market value of $4.3 billion and a projected dividend yield of 2.58 percent. The shares have lost 11 percent this year, but have a three-year average annual return of 25 percent.

Interpublic Group recently reported that third-quarter profit rose sharply to $208 million from $42.4 million.

Parker Drilling is a provider of land- and offshore-contract-drilling services, including drilling rigs, rental tools, and labor management to the energy industry. It should benefit from the demand for its services due t the boom in North American oil shale drilling.

Parker's shares, now trading at $6.43, are up 37 percent this year and have a three-year average annual return of 17.4 percent. The company has a $752 million market value.

A week ago, Parker Drilling reported a huge jump in earnings in the third quarter as net income totaled $20.7 million, up from $500,000.

Dean Foods is the nation's largest processor and distributor of milk and other dairy products. The company's results can gyrate due to fluctuating commodities costs.

Its shares, trading at $9.87, are up 15 percent this year, resulting in a market value of $1.8 billion. The 10-year average annual return is 7 percent.

Lions Gate Entertainment is a film studio that makes motion pictures, TV programs, home-entertainment videos and digital content. Among its TV programs are the popular "Mad Men" and "Weeds" series.

Its shares are trading at $8.38 and are up 27.5 percent this year, resulting in a $1.1 billion market value. They have a three-year average annual return of 7.8 percent.

This week, Lions Gate reported a fiscal second-quarter loss of 18 cents per share. At the end of August, hectoring hedge-fund activist Carl Icahn agreed to sell his big position in the company and drop all pending litigation.

AuRico Gold is a Canadian company that explores and mines for silver and gold, primarily in Mexico, but it has recently made some major acquisitions in North America.

Its shares are up 27 percent this year to $10.42, resulting in a market value of $3 billion. Their three-year average annual return is 37 percent. As with other gold miners, the company's success is tied to volatile gold prices.

Rite Aid is the third-largest retail-pharmacy chain in the U.S., with about 4,700 stores. Prescription drugs account for 68 percent of sales. Long term, it is expected to benefit from increases in prescription sales due to an aging populace.

This week, Credit Suisse upgraded its rating on Rite Aid shares to "outperform," with a $1.50 price target. The shares, currently trading for $1.18, are up 30 percent this year and have a three-year average annual return of 39 percent. The company has a market value of $1 billion. Over 10 years, its shares have an average annual return of 6.2 percent.

NetSpend is a provider of reloadable pre-paid debit cards and other alternative financial services, which allow consumers to spend money without a bank account or credit history so they can use debit cards in lieu of cash.

Now trading at $6.33, NetSpend's shares are down 53 percent this year, but up 35 percent in the past three months, resulting in a $502 million market value.

Sirius XM Radio provides a subscription-based digital radio service, in the model of cable TV, whose broadcast signals originate from orbiting satellites.

The company faces tough competition from free land-based broadcasters as well as from a wide range of new forms of audio content.

Sirius shares are trading at $1.64, and the company has a $6 billion market value. Its stock is up 0.6 percent this year and has a three-year average annual return of 77 percent.

Next year, Sirius will raise its base subscription rate by 12 percent to $14.49 a month, which may drive away some subscribers.

Wendy's shares are trading at $5.20, with a market value of $2 billion.

Wendy's/Arby's ranks a distant third in the United States quick-service restaurant space, which is led by McDonald's. It is gradually overhauling its menu and, in September, the company introduced a redesigned version of its 42-year-old flagship hamburger. The result is an 810-calorie sandwich that has been met by only middling reaction from its customers.

Wendy's shares are up 15 percent this year and they have a three-year average annual return of 11 percent.

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Disclosures:

TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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