Financial Expert Recommends Buying Bargain Stocks - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

Financial Expert Recommends Buying Bargain Stocks

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Some of the biggest companies in America have watched their stock prices tumble in recent months. In this Your Money report, an investment expert tells News 8 why buying bargain stocks could double or even triple your money.

After years of surging, stock prices these days look like a roller coaster ride to the bottom, which is why Wilsey Asset Management President Brent Wilsey says now may be the time to buy bargain stocks.

"You might see some huge gains in some of these companies," Wilsey said.

Starting with Starbucks, a company that in 2006 traded for nearly $40 a share and as of the filing of this story was selling for $8.57 a share.

"You're getting a great company for a very low price. It might not turn around tomorrow, but Starbucks has a very good brand name. They have a very good business model," Wilsey said.

Cheaper bargain stocks allow investors to get more shares for their buck, but make sure you do your homework.

SDSU finance professor Dr. Dan Seiver says just because a stock sells for less than $10 a share doesn't mean it's a winner.

"It could get even cheaper than it is now and you have to be willing to hold on, but I think for an investor who has a three- to five-year horizon, this is a great time to pick up stocks," Dr. Seiver said.

Wilsey and his clients both own Bank of America stock, which in 2006 traded for nearly $50 a share and is now selling for $3.74. Wilsey says the price is low because of the fear the government will take B of A over, but he doesn't see that happening.

"Why would the government come in and take over Bank of America when they are profitable," Wilsey said.

Wilsey's final bargain stock is eBay.

"eBay is one of the most recognizable names in the world, and the stock has fallen down to $10.50 a share," he said.

With a $1,000 investment, at $10.47 a share you could buy 96 shares of eBay. If the price goes back up to 2004 levels of $58 a share, your money could potentially grow to more than $5,000.

So the big question is how long do you have to wait until those stocks slowly start to inch up and you actually see a profit. Wilsey says give it at least 12 to 24 months.

With any investment there is risk. A recent example is Circuit City, where you could have bought their stock for less than a pack of batteries, but the company shut down and that stock value is now worthless.

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