Cheap stocks have an undeniable appeal because they offer investors the potential to score big returns.

Using MSN Money’s Deluxe Screener, columnist Harry Domash has identified nine companies whose shares are bargains now but have the potential to recover from the problems that sank their share prices in the first place.

Among the stocks that the screen turned up is RealNetworks (RNWK, news, msgs), the operator of the Rhapsody online music service. RealNetworks expects the biggest music companies will soon permit music to be sold online without copy-protection software. Today, music sold online comes with software that limits what users can do with the songs after they buy them. Songs purchased on iTunes, for instance, play only on Apple’s (AAPL, news, msgs) iPod music player.

The screen also identified Art Technology Group (ARTG, news, msgs), a provider of software and services that help about 600 companies do business online. The Cambridge, Mass., company last month announced a deal with apparel retailer Chico’s FAS (CHS, news, msgs), which plans to relaunch its Web storefronts for each of its brands using an Art Technology Group product suite.

Coeur D’Alene Mines (CDE, news, msgs) also made the cut. The company mines silver, gold, lead and zinc in the U.S., South America, Africa and Australia. Its plan to open a gold mine near Juneau, Alaska, this year sustained a setback last month when a federal appeals court indicated it would overturn a permit for the mine’s tailings dump.

Here is the complete list of stocks uncovered by the screen April 19.

Company Industry Previous day’s close
Art Technology Group (ARTG) Internet software and services $2.23
Coeur D’Alene Mines (CDE) Silver and gold $4.15
Netlist (NLST) Electronic equipment $4.34
Actuate (ACTU) Application software $5.73
TransAct Technologies (TACT) Computer peripherals $7.15
RealNetworks (RNWK) Internet software and services $7.66
STEC Inc. (STEC) Data storage $8.01
Website Pros (WSPI) Internet services and products $8.88
Silicon Image (SIMG) Semiconductors $9.11

The screen is based on the following parameters:

  • A previous day’s closing price between $2 and $9.95 a share
  • Average daily trading volume of at least 40,000 shares over the previous quarter, to weed out dead or rarely traded stocks
  • A return on invested capital of at least 10%, to isolate companies with profits sufficient to support growth or reward shareholders
  • A price-sales ratio of 8 or less
  • Year-over-year revenue growth of at least 12% in the past 12 months
  • Revenue growth in the previousquarter that’s at least 75% of the growth rate for the previous 12 months
  • Forecasted earnings-per-share growth of at least 15% over five years
  • At least 30% of outstanding shares held by institutional investors
  • A mean recommendation by analysts of “hold,” “buy,” or “strong buy.”
  • At least 30% of outstanding shares held by institutional investors
  • No negative earnings suprises in the recent past

Domash cautions investors against expecting to score easy gains on cheap stocks, many of which got that way because market players spied serious fundamental problems that probably won’t go away. Thus, many are likely to get even cheaper.As a starting point for additional research, however, the screen offers investment ideas that can isolate profitable companies in the cheap-stock universe. For more details on the screening criteria, click here.

Source: articles.moneycentral.msn.com

Quote of the Day:
When someone says ‘it’s not about money’, it’s about money. – H. L. Mencken

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China Media1 Corp. (Symbol: CMDA) is currently an owner and operator of premier Chinese advertising media assets – which includes physical advertising space and contracts with top-tier brand names and Multi-National corporations. Based in Irvine, California, this media company provides an effective platform between investors, advertising agencies, and the Chinese government. Their goal is to enhance their client’s competitiveness and expand their client’s business opportunities in the Chinese market.

I know what you’re thinking when looking at this graph. It doesn’t look pretty and enticing at all. However, looking at a few of advertising contracts that they have recently signed, I have a feeling they’re going to be doing better this year than last year.

  • Air China and Samsung Sign Advertising Contracts for Chengdu Airport with China Media1
    China Media1 Corp. is pleased to announce that the Company has signed four initial contracts for our Chengdu Airport departure level signs. The major brand name advertisers include: Air China (www.airchina.com.cn), Samsung Electronics (www.samsung.com), Pride Tobacco (www.pride56.com), and a Chinese brand name men’s apparel retailer. These posters will be placed on the 8 signs that have been installed at the Departure level of Chengdu Airport. Installation for the Arrival level signs will commence soon and we expect to have advertising shortly thereafter. This initial batch of contracts will generate about US$300,000 in revenue. China Media1 has a 10 year contract to provide a total of 32 illuminated outdoor scrolling signs of different configurations to Chengdu Shuangliu International Airport, the 6th largest in China.
  • China Media1 Signs Advertising Contracts for Shenzhen Airport with Samsung, Casio, and China Mobile Amongst Others
    China Media1 Corp. is pleased to announce that the Company has received several initial contracts for the Company’s Shenzhen Airport Arrival level signs. The major brand names include: Samsung Electronics (www.samsung.com), Casio Electronics (www.casio.com), China Mobile (www.chinamobile.com), China Unionpay (the dominant multi-bank ATM network in China www.chinaunionpay.com), a premium class Chinese wine (www.gj1573.com), and a Shenzhen 4-star hotel. All of this advertising will be placed at the prominent Arrival Level signage the Company installed last year. The total value of these contracts to China Media1 is approximately US$500,000.
  • China Media1 Signs Multiple Contracts at Guangzhou MTR Subway System: Advertisers Include Bank of China, Lenovo, and China Mobile
    China Media1 Corp. is pleased to announce that the Company has received several contracts for our Guangzhou MTR Subway System. The Pillar Wrap Advertising Project at the MTR has successfully targeted and received ads for the upcoming Chinese New Year period. The advertisers include major brands names such as China Mobile, Henderson Land (a major Hong Kong based major developer), Bank of China, and Lenovo (ThinkPad Line and other PC’s). These are short-term contracts designed to span the length of the Chinese New Year shopping period and account for approximately US$ 200,000 in advertising revenue.

All these three contracts were signed within just a matter of five days. Pretty great, isn’t it? I really think this year could be a good year for them. I honestly hope their recent accomplishments will boost their stock price by at least 80% so I can get a high ROI from trading this stock.. :-)

Source: finance.yahoo.com and chinamedia1corp.com

Quote of the Day:
What we do is not beyond anybody else’s competence. It is just not necessary to do extraordinary things to get extraordinary results. – Warren Buffett

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