Everybody likes a deal. And many investors think that low priced stocks are bargains. They can be but not always. When looking at low price stocks, there are several factors you want to look for. Here is the list:
1. Generating earnings
2. Decent earnings growth
3. Low or no debt
4. Preferably paying dividends
5. Preferably dividends paid at least quarterly
Here are two companies fitting both of those categories.
National American University Holding (NAUH), which is currently trading for less than $3 a share, owns and operates National American University. Many of these education companies have been hit hard over the last few years and NAUH is one of them. Maybe it's time for a rebound.
The stock trades at 12 times trailing earnings and 13 times forward earnings. The price earnings to growth ratio is a very favorable 0.84. Plus the stock trades at an excellent 0.58 times sales. The company pays a very healthy yield of 5.9%, and the payouts are made quarterly.
Nevsun Resources (NSU) is in the business of exploring for and developing gold, silver, copper, and zinc mineral properties. The stock, which is less than $4 a share, has a trailing price to earnings ratio of 11 and a forward PE of 8.
The PEG ratio is an outstanding 0.27 and the price sales ratio is a reasonable 1.83. The dividend is paid quarterly and the stock yields 3.7%.
With financials in place like this, there is very little downside and plenty of upside.If you like lists like this, check out the stock lists at WallStreetNewsNetwork.com.
Disclosure: Author didn't own any of the above at the time the article was written.