If you’re like most investors, you gravitate toward popular, hot stocks. But John Buckingham of Al Frank Asset Management and The Prudent Speculator newsletter says you’re better off keying on stocks that are “priced for imperfection”.
“While most of us like to hunt for bargains in our everyday life, investors seem perfectly willing to pay up for growth, hoping that an exciting story will attract even greater interest and/or that a company will grow into its premium valuation,” Buckingham writes in his Forbes column. “Many of these hot stocks are priced for perfection, with even a minor disappointment proving disastrous to the share price.”
On the other hand, he says, “Inexpensively priced stocks, many of which pay generous dividends, offer several avenues for appreciation.” Buckingham highlights several of those avenues, as well as a couple of his favorite current bargain-priced stocks.