5 Stocks That Can Be Bought Cheap Due To Irrational Fears Seeking Alpha
We recently saw what happened when fear and emotions trumped fundamentals with Bank of America ( BAC ) stock. Many investors were scared out of their shares for about $6 per share and then Buffett bought that fear with an investment of about $5 billion into BofA. This causes BofA stock to jump about 25% in a very short time frame. There is no doubt that many other stocks are trading on fear in this market more than on their fundamentals or future growth potential. Here are some stocks that could provide very strong long term rewards for investors willing to buy the fear right now.
General Motors ( GM ) shares are trading at $23.58. GM is a leading automaker. The 50-day moving average is $27.62. Earnings estimates for GM are just over $4.27 per share in 2011 and $4.77 for 2012 so the PE ratio is only about 5. Two officers recently bought over 5,000 shares. The fear for some investors is that the U.S. and the global economy are about to fall into another major recession. A significant global economic downturn would impact GM, but the stock seems to be pricing in a lot of bad news and fear already with it trading for about 5 times earnings.
