Seven "Opportunity Stocks" To Own In These Volatile Markets

“Opportunity stocks.” They are mostly shares of the “boring and basic” but steadily growing companies that pretty much defy gravity. They get pounded, too, however, when overly intense fear grips the market. That’s when the intrepid investors shoot for them — after the panicked crowd starts dumping stocks.

A proven, time-worn wise strategy is to keep ample cash in reserve in any type of market environment — not as a defensive tool but as an aggressive, strategic move. When the market tumbles so deeply that it scares the daylights out of most everyone and pushes them to run for the exits, you need cash to buy aggressively – and wisely.

So when the markets convulsed and swung wildly in August and early September, taking down most stocks, the fearless among long-term investors went bargain hunting – and bought some of such ”opportunity stocks.”

“We started to put our cash to work and went after shares of companies we knew were healthy and growing but which had gotten smashed during the market’s extreme volatility,” says Mark F. Travis, president of Intrepid Capital Funds, which has some $1.2 billion under management. Travis describes his strategy as “disciplined” in its valuation techniques, “opportunistic” in finding stocks with potential attractive risk-adjusted absolute returns, and “contrarian” in that it avoids the “herd mentality” on Wall Street.

Specifically, Travis is high on companies whose products are part of life’s boring but basic necessities, such as shoes and haircuts, and enterprises that provide services in high demand among consumers or corporations in various industries. So Travis started buying shares of seven such companies, most of which are still below investors’ radar screen:

1. Regis (RGS), which owns and operates more than 10,000 hair fashion and beauty-product salons in the U.S. and overseas, now trading at $14 a share;

2. Oshkosh (OSK), a manufacturer of specialty trucks for the defense, fire and emergency, and hauling markets, trading at $17;

3. CSG Systems International (CSGS), a customer and billing service outfit used by telecom, cable-TV and direct broadcast satellite companies, now at $14;

4. CoreLogic (CLGX), which provides information technology services, financial data and data processing to various enterprises, now selling at $11 a share;

5. Bio-Lab Laboratories (BIO), a maker of instruments and consumables such as diagnostic products for blood, diabetes and autoimmune diseases, now trading at $91 a share;

source: forbes.com

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