With the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) having gained 1.8% since 1 January this year, investors are currently faced with the same dilemma they had at the start of the year – there just aren't many cheap and overly appealing investment options available at present.
Of course, having few obvious investment leads isn't the same as not having any and often it just means digging a little deeper to uncover a hidden bargain. The following three stocks have all just hit new 52-week lows but none should be considered down-and-out for the count!
Reckon Limited (ASX: RKN) is a software company that provides small and medium-sized businesses with products to manage their accounting and financial requirements. The phenomenal success of competitor XERO FPO NZ (ASX: XRO) and the ending of a software supply arrangement with previous partner Intuit have led investors to mark-down Reckon's stock price. The next few quarters will be critical for Reckon and investors will have the opportunity to analyse how well the firm has managed the separation from Intuit and how well it is dealing with the new competition.
ERM Power Ltd (ASX: EPW) is a player in the competitive energy generation and supply segment with a focus on supplying business, industrial and government customers with their electricity needs. ERM was bidding to acquire the Macquarie Generation assets from the NSW Government, however, in February the firm announced that it had been unsuccessful in its bid, losing out to competitor AGL Energy Ltd (ASX: AGK). The stock price has fallen 33% in the past year with a recent profit downgrade not helping, however at these levels there could be substantially more long-term upside than downside.
Fleetwood Corporation Limited (ASX: FWD) has been on a steep downward path over the past two years as the supplier of caravans and mobile accommodation to the mining sector has battled the slowdown in the resource sector. The stock has now fallen 74% in the past 12-months and just hit a new 10-year low of $2.26 per share; while there aren't any signs that the current headwinds will turn into tailwinds anytime soon, this well-managed company is one to watch.
Foolish takeaway
Simply hitting a new 52-week low is certainly no reason to buy a stock – there is nothing stopping a stock from hitting a new, lower level the next day! It is however where you will find out-of-favour stocks, which can become loved by the market again one day. By remaining focussed on fundamental value, the 'new lows' lists can be a source of opportunity for the careful investor.
