The September quarter was a horrendous three months for investors to say the least.
The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) finished the quarter down 8%, which marked the worst quarterly performance in four years.
While a market sell-off can seem painful at the time, long-term investors should actually welcome price declines as an opportunity to acquire good businesses at more attractive prices.
The September quarter saw a number of high profile blue-chip stocks decline, in some cases by even more than the market, and numerous blue chips also touched fresh 52-week lows.
Here are four knocked-down stocks which have recently caught my eye and could be worth further investigation by investors. Importantly, with reporting season having occurred in August, analysts have now updated their forecasts for the next full year results.
- Primary Health Care Limited (ASX: PRY) – the share price of Australia's leading listed general practice provider fell 25% over the quarter and touched a new one-year low of $3.74. Earnings per share (EPS) of 26 cents per share (cps) and dividends totalling 17.7 cps are forecast. With the stock above its recent low and trading at $3.80, this implies a forward price-to-earnings (PE) ratio and dividend yield of 14.6x and 4.6% respectively.
- Harvey Norman Holdings Limited (ASX: HVN) – down 14% over the quarter and currently trading at $3.94, the retailer's share price is a long way from its 52-week high of $4.99. With a positive earnings growth outlook over the next few years and EPS and dividend forecasts of 26.7 cps and 21.2 cps respectively for 2016, Harvey Norman is currently priced on a PE of 14.7x, with a yield of 5.4%.
- AMP Limited (ASX: AMP) – as one of Australia's largest financial service companies, the shares in AMP performed well in a relative sense to only decline by 8% over the quarter. With the shares closing on Thursday at $5.66 and with consensus data (Thomson Consensus Estimates) forecasting 38.7 cps for EPS and 28.7 cps for dividends this year, the stock is available to investors on a PE of 14.6x and 5.1% respectively.
- Computershare Limited (ASX: CPU) – Australia's leading provider of registry services is likely to come under renewed scrutiny in the next few months with the imminent initial public offering (IPO) of its rival Link Group. Interestingly, even before the 10% decline in Computershare's share price over the September quarter the investment metrics of Computershare would appear to be more appealing than those expected from Link's planned float. With EPS and dividends of 75.1 cps and 37.4 cps forecast for 2016, Computershare is trading on a PE and dividend yield of 14x and 3.5% respectively.
