While many investors prefer to buy the high-flying stocks that are priced for perfection with lots of growth priced in, other investors really love a bargain and can put up with owning businesses that might not be performing so well but are cheap.
Both investment philosophies are perfectly reasonable so long as you get it right! Given the stock market is efficient enough in the long-term for share prices to move roughly in line with value (with plenty of volatility in between), investors need to get the price they pay and the valuation of the company right.
The last few weeks have seen a staggering number of companies touch their lowest points in the past year, with some companies falling to levels not seen since the Global Financial Crisis. Mining service firms have been particularly hard hit as the slowdown in the resource industry becomes more and more evident.
While falling prices can make investors uneasy, the opportunity to purchase companies at a discount can encourage investors to sift through the list of new lows. The mining boom may not be coming back for a long time, so the sector is a very tricky one to value and certainly has its risks, however with leading firms such as Orica (ASX: ORI), Ausdrill (ASX: ASL) and Emeco (ASX: EHL) at multi-year lows, investors may wish to take a closer look.
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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.