Bargain Hunting for Mid Caps: Five Stocks Worth Taking a Look At

Mid Cap stocks make intriguing trading and investment vehicles, as they generally have the potential for large percentage moves and high growth.

While the volatility may be daunting and a cause for concern to an investor in a highly valued stock, it can serve as an opportunity to garner big profits should you find an undervalued company.

The Price-to-Book Ratio (P/B) is a good valuation tool when trying to gauge whether or not a stock is undervalued. Rather than taking earnings into account, which are constantly changing, the Price-to-Book Ratio is a measure of a company's stock price relative to its assets (total assets – intangible assets and liabilities). Basically, it gives you an idea what the company would be worth if it were to go bankrupt.

Stocks trading with a low P/B ratio may serve as an opportunity to acquire an undervalued company before it becomes “popular” again.

The measure should not be used alone however, as a low P/B can sometimes signify a problem regarding a company's balance sheet.

The following mid-cap companies are trading with below average Price-to-Book ratios, and have recently hit 52-week lows.

1) Excel Maritime Carriers (NYSE: EXM): Currently trading at $2.52, shares of Excel Maritime have an astoundingly low P/B ratio of 0.1199 versus an industry average of 2.32. Additionally, Excel has a Price to Earnings ratio (P/E) of 1.076, which is one of the lowest in its industry.

The company, which provides sea based transportation for dry bulk cargo, has been hit by high fuel costs, as well as an overall slowdown in worldwide economic activity.

The stock recently hit a 52-week low of $2.40 on July 27th. Shares are currently trading 17% lower than their 50-day simple moving average (one year daily chart). Look for a move above $2.59 as a decent entry point, with $2.40 serving as the clear stop out.

2) Genco Shipping & Trading (NYSE: GNK): Currently trading at $6.02, shares of Genco have an extremely low P/B ratio of 0.1731 versus an industry average of 2.32. Genco also has a low P/E ratio of 2.1756, which is one of the lowest in its industry.

The company transports iron ore, coal, grain, steel, and other products worldwide. Given its cargo, the recent economic slowdown has taken its toll on this company.

The stock recently hit a 52-week low of $5.53 on July 27th, but found some support in today's (Thursday's) session, as it gained 8.3%. Shares had been trading as high as $18.08 back in mid-November. The stock is currently trading 47% lower than its 200-day simple moving average ($11.40 on a one year daily chart), and seemingly has a lot of room to the upside. As with all contrarian plays, keeping tight stops and/or managing position size are keys to profits.

3) Tsakos Energy Navigation (NYSE: TNP): Currently trading at $9.06, shares of Tsakos Energy have an extremely low P/B ratio of 0.42 versus the industry average of 2.32.

The company transports crude and petroleum products.

The stock hit a 52-week low of $8.50 in today's (Thursday 7/28) session, but buyers emerged early and began pushing the stock up around 9:40am. Shares closed 6% higher than the low at $9.06 – near the intraday high of $9.13. The large bounce suggests that the stock may be ripe for an upside correction. Look for a move above $9.13 as an entry point. $9.60 has served as strong area of resistance for the stock recently. Should it break above that level, expect a quick move to the $10 area.

4) Central European Distribution (NASDAQ: CEDC): Currently trading at $9.70, shares of Central European Distribution have an extremely low P/B ratio of 0.42 versus the industry average of $4.65. Additionally, the company's Price to Sales ratio is one of the lowest in the industry (1.02 versus 3.06).

Central European Distribution produces vodka as well as imports and distributes numerous alcoholic spirits, wines, and beers.

The stock hit a 52-week low of $9.68 in today's (Thursday 7/28) session. Shares had traded as high as $24.23 in late January. Given the stock's steady/controlled move downward, waiting for a downside capitulation followed by an emergence of buying would be a good idea before jumping into a full position.

5) SkyWest (NASDAQ: SKYW): Currently trading at $12.54, shares of SkyWest have an extremely low P/B ratio of 0.48 versus the industry average of 1.91.

The company operates SkyWest Airlines, Atlantic Southeast, and Express Jet, operating mainly in the United States, Canada, Mexico, and the Caribbean.

The stock recently hit a 52-week low of $12.00 on July 18th and has been consolidating in a tight range around $12.50 since. Shares are currently trading 14% lower than their 50-day simple moving average and 19% lower than their 200-day SMA. The level to watch for SkyWest is $12.87. If shares can break above that level, look for a fill of the gap around $14.50. A break below the $12.00 low would act as a clear exit point.