A portfolio of 8 stock picks from the edge

And now for the final post in the 20 Stocks Left Behind series. These are stocks that had been selected as initial candidates for the portfolio, but which had been removed in favor of the chosen 8 stock portfolio.

Finisar (FNSR)

Finisar is a technology company which makes fiber optic subsystems and network performance systems. At a glance the company seems to be increasing revenues at a nice clip while diminishing their losses. However, they are in the midst of an attempted combination with another company called Optium (OPTM). Optium is about half the size of Finisar based on market cap, so it represents a significant combination. I don’t know enough about their respective businesses to determine how smoothly they could integrate and what problems they may or may not encounter.

52 Week High Price: 4.13
Recent Price: 1.34
Decline from 52 Week High: 68%

Monaco Coach (MNC)

Monaco Coach designs, manufactures, and sells recreational vehicles or RVs. This business has been absolutely crushed by the combination of a soft economy, rising gas prices, and decreased availability of credit for potential buyers. Monaco Coach has been trying to cut staff and right size their business to suit the overall smaller market. At the same time, they are competing against larger and better capitalized companies like Winnebago (WGO) and Thor Industries (THO). It just seems like the company is facing too many challenges to be optimistic about their prospects.

52 Week High Price: 14.89
Recent Price: 2.26
Decline from 52 Week High: 85%

Advanta (ADVNB)

Advanta is a credit card issuer which targets small businesses and business professionals. The stock price took a beating back in October and has been treading water below the $10 mark since. As mentioned previously, I decided to leave stocks in the financial and housing industries alone. There may or may not be another proverbial shoe to drop, and at best I think these industries will be facing multi-year hangovers from the last big party.

52 Week High Price: 29.95
Recent Price: 8.08
Decline from 52 Week High: 73%

Shuffle Master (SHFL)

Shuffle Master is a gaming supply company that was taken down along with the industry that it serves. In theory, as a supplier to the industry Shuffle Master should lead an upswing if and when gaming stocks come back. What turned me off was a recent $65 million dollar public offering at $4.25 per share. I don’t like to see a company dilute their existing shareholders with a stock offering at such a low price. Why didn’t they sell shares a few years ago when the stock price was in the 30’s? Quite the opposite, they were buying back shares at those levels.

52 Week High Price: 17.87
Recent Price: 4.90
Decline from 52 Week High: 73%

Office Depot (ODP)

Office Depot supplies a range of office products and services to businesses and consumers. A cut back in business spending has taken its toll. Although Office Depot has managed to pick themselves up from the dust before, I don’t like how the stock has performed in comparison to Staples. If business spending is falling, why has Staples stock price barely budged? Will this be a winner take all market? As with a few other stocks, I decided not to invest in a company facing off against an obviously dominant competitor.

52 Week High Price: 25.51
Recent Price: 6.73
Decline from 52 Week High: 74%

Carmax (KMX)

Carmax has supposedly simplified the process of buying a new car. In addition to some other niceties, they offer upfront low prices without any haggling. Berkshire Hathaway also reported a stake in the company last November. The stock has recently fallen as the company struggles through the worst sales declines in its history. While many are already anticipating a quick turnaround, I am not convinced that the darkest days are done.

52 Week High Price: 25.55
Recent Price: 14.10
Decline from 52 Week High: 45%