8 Dirt-Cheap Stocks with Great Potential

These companies may be down on their luck, but mountains of cash prime them for a turnaround.

What’s better than a bunch of dirt-cheap stocks? A bunch of dirt-cheap stocks of companies stuffed to the brim with cash. Cash-rich companies can jump on new opportunities more easily than cash-poor firms can. And in the case of riskier, less financially fit firms such as the ones below, cash buys breathing room. It means they have time to work through short-term issues and get their houses in order. Each of these eight companies trades for less than $5 per share, but don’t let that mislead you into thinking they’re penny stocks -- each runs a substantial, mature business. And if animal spirits return to the market their stocks have plenty of room to run.

For Qwest Communications (symbol Q), a $2.4-billion pile of the green stuff, or $1.39 per share, is a lifeline while waiting for a takeover. One of the original “Baby Bells” spun off from the old AT&T in 1984, Qwest’s trouble is that “it’s basically a land-line phone company,” says George Putnam, editor of The Turnaround Letter, which ran the screen that generated the names in this story.

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Elizabeth Leary
Contributing Editor, Kiplinger's Personal Finance
Elizabeth Leary (née Ody) first joined Kiplinger in 2006 as a reporter, and has held various positions on staff and as a contributor in the years since. Her writing has also appeared in Barron's, BloombergBusinessweek, The Washington Post and other outlets.