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Five Guru Stocks Hitting New 52 Week Lows Today: ALTH, CAAS, JAG, TLB, USAK

The overall market slowly turned higher today. There ended up being 411 stocks on the NYSE, Nasdaq, and AMEX at new 52 week highs and 38 at new lows. Below are five companies at new 52 week lows that are owned by gurus. They’re a good place to start doing research. For some of them, a guru may have just gotten in too early, which is common among value investors, and it may be a good opportunity to follow them. For others, it may have been a thesis that went wrong along the way. It’s important for you to take a close look and determine the guru’s rationale for getting in the name, and the reason why the stock has dropped. Beware of value traps.

Allos Therapeutics (ALTH): Jean-Marie Eveillard bought into Allos in the 3rd quarter last year. Since then, the stock price has dropped 31%. Shares have headed downward over the last month specifically as the company focuses on its lead drug, Folotyn. Allos is a biopharma focused on anti-cancer drugs. Folotyn is currently used on patients who with T-cell lymphoma who don’t positively react to other drugs. They’re developing its use for recurrent tumors, and recently laid off 13% of their workforce in order to focus exclusively on Folotyn.

China Automotive Systems (CAAS): Mario Gabelli and Ron Baron own shares in CAAS, although they haven’t made any trades since the 1st quarter of 2010 when Baron sold 30% of his shares. Since then, the stock is down 35%. CAAS is a Chinese parts manufacturer specifically focusing on steering systems. Taking a cursory look, it appears shares are cheap and business, but as we saw with China Media Express (CCME), investors should look very closely and not trust the filings.

Jaguar Mining (JAG): George Soros owns 1% of Jaguar Mining and added shares in the 1st, 2nd, and 3rd quarters last year. Shares have been pushed down because of a recent $90 million convertible note issuance and a poor 2011 forecast. JAG is a gold miner who owns mines in Brazil.

Talbots (TLB): George Soros also owns shares in Talbots, first picking them up in the 2nd quarter last year. Since then, shares have gone down 64%. Unfortunately for Soros, most of management was selling shares in the 4th quarter last year at prices that are double what they are today. Talbot has dropped most recently because they failed to come close to hitting their own guidance and they also lowered their 2011 EPS guidance by 25%. Management has a serious credibility problem.

USA Truck (USAK): 9% of USA Truck is owned by Donald Smith. Most of his purchases were in 2007 and 2008. They operate as a truckload carrier and haul mostly commodities in the U.S., Canada, and Mexico. They’ve had a rough nine months, but about a week ago reported improving fundamentals, although they’re still showing a loss. Revenue increased considerably, but they have to worry about rising fuel costs as tensions in the Middle East and commodity inflation continues.

Disclosure: No positions

For the complete list of 52-low stocks, go to this link.

About the author:

Steven Kiel
Steven Kiel is the president and chief investment officer for Arquitos Capital Management, a Virginia-based investment management firm. He is a graduate of George Mason School of Law and a captain in the Army Reserves. He manages two spoke funds, The Freedom Fund, a value-oriented portfolio, and The Hayek Fund, a portfolio dedicated to free market principles. He can be contacted at steven.kiel@arquitos.com or through the firm's website at www.arquitos.com.

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