MENU

10 stocks trading near 52 week lows

With the market getting smashed almost every other day, many stocks have seen their shares trading at their lowest levels in a year. Stocks hitting these lows can be a fertile hunting ground for bargains, as well as a dumping ground for what I’d call ‘ordinary’ stocks (and not in a good way). Sorting through them to work out which ones may offer some value and which ones are the dogs is the difficult part.

Here’s a select list of stocks hitting 52 week lows from a broad range of sectors, which are currently on sale at depressed prices.

Company Name Market Cap Current Share Price ($) 52 week low ($) Trailing P/E ratio
Australian Agriculture Company (ASX: AAC) 360m 1.15 1.11 23.5
Bradken Limited (ASX: BKN) 897m 5.54 5.45 10.2
David Jones Limited (ASX: DJS) 1,110m 2.13 2.11 7.6
Kathmandu Holdings Limited (ASX: KMD) 209m 1.04 1.02 8.0
Myer Holdings Limited (ASX: MYR) 1,070m 1.84 1.84 7.7
Reece Australia Limited (ASX: REH) 1,780m 17.90 17.90 15.3
Seven West Media (ASX: SWM) 1,400m 2.17 2.17 5.1
Sims Metal Management (ASX: SGM) 2,100m 10.21 10.09 n/a
Ten Network Holdings Limited (ASX: TEN) 669m 0.64 0.66 n/a
The Trust Company (ASX: TRU) 154m 4.62 4.62 12.0

Source: Australian Financial Review and Google Finance

It is important when researching shares to determine whether a company’s earnings 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 written some brief thoughts on a couple of them.

David Jones versus Myer

If retailing recovers – which it should at some stage – David Jones at least has a competitive advantage with exclusive brands and products that are seen as much better quality than Myer. DJs appears priced for possible extinction – or at least long term poor performance. Despite the company’s recent woes, analysts still expect the company to pay a dividend yield of over 7% in 2012 and 2013.

Reece

Reece provides bathroom and plumbing supplies, mainly to tradespeople. Amid fears surrounding the threat Bunnings, owned by Wesfarmers Limited (ASX: WES) and Woolworths Limited’s (ASX: WOW) Masters pose, Reece has seen its share price slammed. A slowing construction industry hasn’t helped either.

Reece is majority owned by the Wilson family (around 60%) and doesn’t really cater to the D-I-Y handyman, so it really operates in different markets to Masters and Bunnings. With an average return on equity of over 19% in the last three years, despite revenues growing at just 3%, Reece could be a stock for the watchlist.

The Trust Company

The Trust Company I’ve written about before, in this article, and at these low prices becomes even more interesting.

Which ones would I bypass?

Kathmandu, Sims Metal and Ten. All three are in pretty ordinary businesses. They either have low returns on equity (Ten, Sims), poor profit margins (Sims) and little or no competitive advantage (all three).

If you’re in the market for some less risky, high yielding ASX shares, look no further than Secure Your Future with 3 Rock-Solid Dividend Stocks. In this free report, we’ve put together our best ideas for investors who are looking for solid companies with high dividends and good growth potential. Click here now to find out the names of our three favourite income ideas. But hurry – the report is free for only a limited time.

More reading

Motley Fool contributor Mike King owns shares in Woolworths. 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.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.