While the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has been enjoying a stellar start to calendar year 2015 with the index soaring 10% in the first two months and looking set to crack the 6,000 point level any day now, not all companies have been partaking in the rally.
Here are three leading stocks which rather than rallying to new heights are in fact all trading near their 52-week lows.
- Ainsworth Game Technology Limited (ASX: AGI) suffered a 12.9% fall last week after the manufacturer and supplier of gaming machines reported interim results which underwhelmed the market. Those results showed an 8% fall in revenue and a flat profit compared with the prior corresponding period – nothing terrible but arguably not good enough to justify the multiple it was trading on.
- Investors slashed the share price of Village Roadshow Ltd (ASX: VRL) by 12.3% last week after the entertainment group reported interim results which disappointed. Village Roadshow owns a suite of attractive assets including the newly opened Wet'n'Wild theme park in Sydney as well as cinemas and film distribution, however, the company's guidance for a full year profit result below the 2014 financial year was not the news investors were looking for.
- Woolworths Limited (ASX: WOW) share price sank to a new 52-week low of $29.11 last week after Australia's largest retailer reported a weak set of interim numbers and issued a downgrade to its full year profit guidance. Amongst the concerns for investors were the ongoing losses within the Home Improvement division and the announcement by management that it needed to invest heavily in its supermarket division to boost competitiveness.
Should you buy?
Ainsworth, Village and Woolworths are all leading companies in their respective industries. While their recent interim results could be considered uninspiring the real question for investors is whether the long-term earnings potential of these businesses has meaningfully altered. If it hasn't, then the recent share price weakness could offer long-term investors attractive opportunities to buy into these three stocks.
