5 Best Cheap Stocks To Buy For 2014

NEW YORK (TheStreet) -- Don't look now, but Microsoft (MSFT) has replaced Apple (AAPL) and Netflix (NFLX) as the market's favorite battlefield stock.

There are analysts who consider the Redmond. Wash.-based software house to be dirt cheap, and there are others who think the whole edifice is about to come crashing down.

Those who consider the stock dirt cheap point to recent Apple-like moves, a dividend hike and stock buyback. Those who see imminent doom point to the slow up-take of Windows 8, the failure of Windows Phone against Apple, and the Azure cloud's troubles competing with the Amazon.Com (AMZN) cloud.

CEO Steve Ballmer, who has announced his retirement next year, defended the company this week with an analyst webcast. He said only 20% of revenue comes from consumers, only one-quarter of revenue comes from Windows, and that more than half of all revenue comes from outside the United States and Canada. Our Barry Randall calls what has happened with Microsoft under Ballmer "value compression." The price paid for its earnings has fallen, from 47 times a decade ago to 13 times now. The company has grown, but has not surprised, and just as with Apple is now valued more for the cash it gives todaythan its growth prospects tomorrow. It's going to be hard to change that trajectory, because Ballmer has set a firm course for the company's future in buying Nokia, and his successor will be chosen by people loyal to him. Many fail to see Microsoft's stock course as Apple-like because the battlefield appears small, the $5 per share between $30 and $35. But Microsoft has nearly 10 times as many shares as Apple, 8.3 billion. If the two companies had an equal number of shares, Microsoft would be trading in a $300 to $350/share range. My own view is that Wall Street prefers monopoly to competition, and that the U.S. Justice Department was more successful in attacking Microsoft on anti-trust grounds than anyone will ever know. While Microsoft won the battle, it lost the war. It was forced to add layers of bureaucracy, professional naysayers, to its ranks, which frustrated its best people and eventually destroyed its innovative capacity. Like IBM with Windows, it became vulnerable to the first "kid with a Clue" who came along, and many did.

5 Best Cheap Stocks To Buy For 2014: USG Corporation(USG)

USG Corporation, through its subsidiaries, engages in the manufacture and distribution of building materials worldwide. The company offers gypsum and related products, including gypsum wallboard, joint compounds used for finishing wallboard joints, cement boards, glass mat sheathing, gypsum fiber panels, poured gypsum underlayments, ultra light panels, and various construction plaster products. Its gypsum products are used in various building applications to finish the interior walls, ceilings, and floors in residential, commercial, and institutional constructions, and repair and remodel constructions. The company also produces gypsum-based products for agricultural and industrial customers to use in various applications, including soil conditioning, road repair, fireproofing, and ceramics. In addition, it manufactures ceiling grid and acoustical ceiling tile for electrical and mechanical systems, and air distribution and maintenance applications. USG Corporation distribut es its gypsum products through specialty wallboard distributors, building materials dealers, home improvement centers and other retailers, contractors, and a network of distributors. Further, it distributes other manufacturers? gypsum wallboard, joint compound and other gypsum products, as well as drywall metal, insulation, and roofing products and accessories. The company sells its products under SHEETROCK, DUROCK, FIBEROCK, SECUROCK, LEVELROCK, RED TOP, IMPERIAL, DIAMOND, SUPREMO, AURATONE, ACOUSTONE, DONN, DX, FINELINE, CENTRICITEE, CURVATURA, and COMPASSO brands. The company was founded in 1901 and is based in Chicago, Illinois.

5 Best Cheap Stocks To Buy For 2014: Freeport-McMoran Copper & Gold Inc.(FCX)

Freeport-McMoRan Copper & Gold Inc. engages in the exploration, mining, and production of mineral resources. The company primarily explores for copper, gold, molybdenum, silver, and cobalt. It holds interests in various properties, located in North and South America; the Grasberg minerals district in Indonesia; and the Tenke Fungurume minerals district in the Democratic Republic of Congo. As of December 31, 2010, the company?s consolidated recoverable proven and probable reserves totaled 120.5 billion pounds of copper, 35.5 million ounces of gold, 3.39 billion pounds of molybdenum, 325.0 million ounces of silver, and 0.75 billion pounds of cobalt. The company was founded in 1987 and is headquartered in Phoenix, Arizona.

Advisors' Opinion:

• [By Joshua Bondy]

  Freeport-McMoRan Copper & Gold (NYSE: FCX  ) is one of the most interesting plays within the copper market. It recently broke the mold when it decided to merge with the oil and gas firm, Plains Exploration & Production. The merger reduces Freeport's dependency on the volatile metal prices, but it also means that management must navigate two very different industries.�

Top Growth Companies For 2014: Advance Auto Parts Inc(AAP)

Advance Auto Parts, Inc., through its subsidiaries, operates as a retailer of automotive aftermarket parts, accessories, batteries, and maintenance items. It operates in two segments, Advance Auto Parts (AAP) and Autopart International (AI). The AAP segment operates stores, which primarily offer auto parts, including alternators, batteries, chassis parts, clutches, engines and engine parts, radiators, starters, transmissions, and water pumps; accessories comprising floor mats, mirrors, vent shades, MP3 and cell phone accessories, and seat and steering wheel covers; chemicals consisting of antifreeze, freon, fuel additives, and car washes and waxes; and oil and other automotive petroleum products. This segment also provides battery and wiper installation, battery charging, check engine light reading, electrical system testing, video clinics and project brochures, loaner tool programs, and oil and battery recycling services; and sells its products through online. The AI segm ent operates stores that offer replacement parts for domestic and imported cars, and light trucks to customers in northeast and mid-Atlantic regions, as well as to warehouse distributors and jobbers in North America. As of January 1, 2011, the company operated 3,369 AAP stores, including 3,343 stores located in the northeastern, southeastern, and Midwestern regions of the United States under the Advance Auto Parts and Advance Discount Auto Parts trade names; 26 stores situated in Puerto Rico and the Virgin Islands under the Advance Auto Parts and Western Auto trade names; and 194 stores under the Autopart International trade name in the United States. It serves do-it-yourself, do-it-for-me, or commercial customers. The company was founded in 1929 and is based in Roanoke, Virginia.

Advisors' Opinion:

• [By Ben Levisohn]

  Autozone has dropped 0.3% to $413.22 �, while�Pep Boys (PBY) has gained 0.2% to $12.19 , Advanced Auto Parts�(AAP) has risen 0.3% to $80.35, and O’Reilly Automotive (ORLY) has advanced 0.3% to $124.42 .

• [By CanadianValue]

  At the end of 2011, Advance Auto Parts (AAP) and O��eilly Automotive (ORLY) were the fifth- and tenth-largest positions in the Fund, respectively, and together constituted 6.2% of our assets. Auto parts retail is a difficult business for all but the most efficient players. An auto parts retailer must carry literally thousands of hard parts for hundreds of models of cars. Not many people walk in the door needing an alternator for a 1994 Ford, but the person who does is probably experiencing a crisis. The retailer who can manage a substantial investment in slow-turning parts inventory is able to earn a high margin on sales.

5 Best Cheap Stocks To Buy For 2014: S&P GSCI(GD)

General Dynamics Corporation, an aerospace and defense company, provides business aviation; combat vehicles, weapons systems, and munitions; military and commercial shipbuilding; and communications and information technology products and services worldwide. Its Aerospace group designs, manufactures, and outfits various large and mid-cabin business-jet aircraft; provides maintenance, repair work, fixed-based operations, and aircraft management services; and performs aircraft completions for aircraft. The company?s Combat Systems group offers tracked and wheeled military vehicles, weapons systems, and munitions. Its product lines include wheeled combat and tactical vehicles; battle tanks and infantry vehicles; munitions and propellant; rockets and gun systems; and axle and drivetrain components and aftermarket parts. This group also manufactures and supplies engineered axles, suspensions, and brakes for heavy-load vehicles for military and commercial customers. The company Advisors' Opinion:

• [By Rich Smith]

  The U.S. Department of Defense started the week slow Monday, awarding only five new contracts to its defense contractors, and those five worth less than $120 million in aggregate. Of these, the two largest awards went to publicly traded companies, specifically:

  BAE Systems' (NASDAQOTH: BAESY  ) San Diego Ship Repair subsidiary, which won a $38.6 million modification to a previously awarded contract to perform upgrades on the guided missile destroyer USS Benfold (DDG-65). BAE is expected to complete this work by August 2014. General Dynamics' (NYSE: GD  ) soon-to-be merged-out-of-existence Armament and Technical Products unit, which was awarded a $32.7 million firm fixed-price multi-year procurement contract for the production of MK82 Mod 0 Aegis gun and guided-missile directors and MK 200 Mod 0 Aegis director controllers to be incorporated into six Aegis Weapon System ship sets.

  The Aegis Weapon System, described by its maker, Lockheed Martin (NYSE: LMT  ) , as "the world's premier naval air defense system," consists of an integrated SPY-1 multi-function phased array radar system, integrated into a missile battery, and can be used for shipboard defense against everything from aircraft to conventional missiles to ballistic missiles.

• [By Jon C. Ogg]

  General Dynamics Corp. (NYSE: GD) is down the least of defense stocks with a late-Tuesday drop of 1.4% at $83.08 against a 52-week trading range of $61.70 to $87.85. According to Thomson Reuters, its consensus analyst target is $95.80.

5 Best Cheap Stocks To Buy For 2014: Hewlett-Packard Company(HPQ)

Hewlett-Packard Company and its subsidiaries provide products, technologies, software, solutions, and services to individual consumers and small- and medium-sized businesses (SMBs), as well as to the government, health, and education sectors worldwide. Its Personal Systems Group segment offers commercial personal computers (PCs), consumer PCs, workstations, calculators and other related accessories, and software and services for the commercial and consumer markets. The company?s Services segment provides consulting, outsourcing, and technology services to infrastructure, applications, and business process domains. Its Imaging and Printing Group segment provides consumer and commercial printer hardware, supplies, media, and scanning devices, such as inkjet and Web solutions, laser jet and enterprise solutions, managed enterprise solutions, graphics solutions, and printer supplies. The company?s Enterprise Servers, Storage, and Networking segment offers industry standard s ervers, business critical systems, storage platforms, and networking products, including switches, routers, wireless LAN, and TippingPoint network security products. Its HP Software segment provides enterprise IT management software, information management solutions, and security intelligence/risk management solutions. The company?s HP Financial Services segment offers leasing, financing, utility programs, and asset recovery services; and financial asset management services for enterprise customers, as well as specialized financial services to SMBs, and educational and governmental entities. Hewlett-Packard Company also provides business intelligence solutions that enable businesses to standardize on consistent data management schemes, connect and share data across the enterprise, and apply analytics, as well as licenses its specific technology to third parties. The company was founded in 1939 and is headquartered in Palo Alto, California.

Advisors' Opinion:

• [By Chris Neiger]

  NVIDIA said the Quadro K6000 GPU will be�available this coming fall from Dell (NASDAQ: DELL  ) , HP (NYSE: HPQ  ) , Lenovo, and other major workstation providers.

• [By Matt Blecker]

  Although still a long way from IBM (IBM) and HP (HPQ), acquisitions of Perot Systems in November of 2009 and Secure Works in February of 2011 has enabled Dell to become a broader IT services and solutions provider. The IT services market is a large, highly competitive market, nearly $850 billion in 2011 worldwide according to Gartner, and is also less concentrated with lower barriers to entry. IBM�� top market share (approximately 7% in 2010) is a much lower share than the top share in other areas like servers and storage systems. Dell�� growth of service revenue shows they have executed relatively well so far, is helping to forge stronger IT relationships, and also partially responsible for the improvement in operating margins over the past couple of years.

• [By Alex Dumortier, CFA]

  Hewlett-Packard's board gets some new blood
  Dow component Hewlett-Packard (NYSE: HPQ  ) has just added former Microsoft technologist Ray Ozzie to its board of directors. On the one hand, Ozzie brings exceptional knowledge and experience of the technology industry to HP's board: He founded two software companies that were ultimately bought by industry heavyweights and inherited the role of "chief software architect" at Microsoft from Bill Gates himself. While such expertise is welcome, the real problem with HP's board is that it is rudderless. Meanwhile, Ozzie seems to me too independent and intellectual to fill the leadership gap.

• [By Matt Thalman]

  Onward to earnings reports
  Shares of Microsoft (NASDAQ: MSFT  ) , Hewlett-Packard (NYSE: HPQ  ) , and Intel (NASDAQ: INTC  ) all closed lower today as investors awaited Intel's second-quarter earnings report and a brief insight into what's happening within the PC industry. As the closing bell rang, shares of Microsoft had lost 1.46%, Hewlett-Packard was down 0.53%, and Intel slid lower by 0.41%.