Things appear to finally be turning around for the American economy. Certainly, there are those who still remain skeptical about the rebounding job numbers, but between a potential deal on Greek debt and several consecutive months of relatively strong job growth, the American economy appears to be in a rally. So, what companies are poised to join in? Are there any stocks out there that have taken a real beating in the last couple of years but could be poised to stage their own rally? In short: maybe. Here are three stocks that look like they might have the potential to turn around a downward slide and begin to rise steadily.
An eye in the sky, if you will. GeoEye is a provider of earth imaging for commercial purposes, using two satellites and airplanes to take images of the earth to sell to defense departments, intelligence agencies, and other groups. GeoEye apparently didn't see the last 12 months coming as the company's share price has taken a nearly 50 percent hit over that period. However, the company does appear to be looking to the future. GeoEye appears to be relatively cheap at the moment, with a P/B under one and a PEG of 0.77. Also observe the company's gross margin of over 65 percent and operating margin of over 25 percent. Trading just 20 percent over its 53-week low, some might not need a satellite to see a rally in the company's future.
Molycorp is a rare earth mining company operating in the Western hemisphere. Molycorp's real value may derive from the current state of the rare earth market. China currently holds a rather dramatic monopoly on rare earth metals, mining and producing the vast majority of global supply. China has used its ability to control supply to manipulate prices, causing anger from other nations and prompting the United States to explore a potential rare earth reserve. As such, Molycorp's position as a North American based rare earth mining company could yield major benefits. The company shows very bullish projections for EPS growth over the next five years. What more, the company's profit margin exceeds 30 percent, its operating margin is over 35 percent, and its gross margins are over 55 percent. Add to this that Molycorp has been falling over the last year, losing over 60 percent of its value since last May, and Molycorp might be a reasonably priced stock poised for a gain. Of course, this all involves speculating on the future of the rare earth market, which is anything but certain, but there is that potential that becoming the Western alternative to Chinese rare earth companies could be the engine that drives a Molycorp rally.
Dice Holdings (DHX)
Dice makes specialized career websites focused on select professional communities. Dice has had a rough year, losing over half its price per share since May 1st last year. However, the woeful state of the company's stock doesn't necessarily mean one should run away from Dice. The company currently appears to be undervalued based on its earnings and growth numbers, as its current PEG of 0.77 would indicate. Dice also has projected EPS growth for the next five years projected at close to 25 percent, driven by an operating margin over 30 percent and a gross margin over 90 percent. If the American jobs market continues to rebound, it stands to reason that it should at least marginally improve the outlook for Dice, making this a stock that appears to have a chance at a rally.
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