I love a stock-market panic.
Crashing confidence in the Eurozone is providing the bargain opportunities blue-chip investors often have to wait years for.
I've selected 10 stocks that are trading at their lowest price in a year, from a broad range of sectors, that are currently on sale at depressed prices.
|Company||Market Cap||Share Price ($)||52-week low||P/E||Dividend Yield (%)|
|Alumina Limited (ASX: AWC)||2.2Bn||$0.897||$0.89||17.2||6.3%|
|Bendigo & Adelaide Bank (ASX: BEN)||2.7Bn||$6.89||$6.86||12.5||8.7%|
|Data#3 Limited (ASX: DTL)||147.8m||$0.96||$0.90||10.3||7.7%|
|Fairfax Media (ASX: FXJ)||1.49Bn||$0.635||$0.62||N/A||5.5%|
|GR Engineering Services (ASX: GNG)||181.5m||$1.21||$1.21||9.7||6.6%|
|Macquarie Radio Network (ASX: MRN)||41.45m||$0.555||$0.55||22.1||8.1%|
|RCG Corporation (ASX: RCG)||78.6m||$0.33||$0.31||8.9||9.1%|
|Rio Tinto Limited (ASX: RIO)||102Bn||$55.13||$54.94||18.5||2.4%|
|Ten Network Holdings (ASX: TEN)||710.8m||$0.68||$0.68||N/A||7.7%|
|The Trust Company (ASX: TRU)||165.6m||$4.97||4.76||12.9||7%|
Source: Google Finance
It is important when researching shares to determine whether a company's earnings and dividend are sustainable. Larger companies are often the dominant, established participants in their industries. While that provides some help, it doesn't make the shares immune from management shortcomings (such as a disastrous acquisition) or industry decline. From the list above, I've picked three shares that I think stand out.
Fairfax is the name behind some of Australia and New Zealand's biggest newspapers such as The Sydney Morning Herald, The Age, Australian Financial Review and some of Australia's most visited websites including Domain, Drive, Mycareer and Stayz. The media sector in Australia has fallen dramatically as a result of rapidly declining circulation and readership figures, amid a subdued advertising market. No wonder then that Fairfax's shares have fallen 40% in the last year.
The company is trying to transform itself by moving from an old media type organisation to the delivery of digital content through a multitude of new channels. Should the transformation work out, Fairfax's share price could be multiples of the current price in years to come.
One of the largest diversified miners in the world, Rio is involved in iron ore, aluminium, copper, diamonds, coal, gold, uranium and energy to name just a few. However, the company's large exposure to iron ore leaves it dramatically exposed to a slow-down in China's steel production. Iron ore contributed 78 per cent of Rio's earnings in 2011. Hence the reason the shares have hit new lows. The current market falls offer better value elsewhere, such as BHP Billiton Limited (ASX: BHP), which trades on a lower P/E multiple, pays a higher yield, and is much more diversified.
The Trust Company
The Trust company is a financial services company offering funds management, financial planning, estates and trusts administration, property and infrastructure custody services, responsible entity services, superannuation compliance and trustee services, structured finance trustee services and REIT trustee services to institutions.
The company announced a 12% increase in reported net profit after tax to $12.6m for the year ended 29 February 2012, and they expect to see a significant improvement in underlying business performance for the financial year 2013. That's despite a $2m impact from an organisational review. Given the complexity and past and proposed changes to Australia's superannuation and financial advice laws, it seems to me that companies like The Trust Company will be in demand for years to come. This could be a stock to add to the watchlist.
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Motley Fool contributor Mike King owns shares in BHP. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.