Warren Resources, Inc. (NASDAQ:WRES, WRES message board) dropped more than 15% after the market opened today, October 27, 2008. There was no particular reason for such a sharp drop to occur, however it made the company's stock even more undervalued.
Those who follow the stock know of a shareholder rights plan the company adopted not so long ago. The company had announced the plan shortly after the share price had dropped to somewhere near its current level. Warren currently has a PEG ratio of 0.11. As we know, anything below 1 means the stock is basically undervalued and such a low ratio means the company has very good chances of providing high returns on their share price in the future.
This would only happen if the expected growth rate is attained. Looking at their current fundamentals reveals that the company is in a very favorable position with high and sustained growth rate of top and bottom lines. They also have enough cash to survive through possible periods of recession. With all but share price intact, investors should see the company's share price rising in the near future.
Another of today's losers we're going to take a look at is Yanzhou Coal Mining Co. (NYSE:YZC) . This company's stock has been among the losers for the last month or so, however today's drop might have been somewhat offset by the company's news announcement.
Yanzhou has announced that its third quarter profit has risen by 302.53% on a year-to-year basis. All this is said to be due to the rise of coal prices and slower growth in operating costs. This company also has pretty good fundamentals, and with further sales and profit growth, investors should see an increase in share price once the current market problems come to an end.
These two stocks have followed the market drop and are undervalued with no particular problem in their fundamentals. Currently the share prices look very attractive, especially for a longer term investment. There is no reason why these two stocks should remain at such low levels once the market get back on track. Of course there is always a call for deeper analysis when considering a stock, but putting these two on a watch list is surely a good idea.
References:http://www.warrenresources.com/
http://www.yanzhoucoal.com.cn/English/index.asp

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