Three stocks which all operate in three very different market segments and with three quite different future outlooks have hit new 52-week lows this week. The depressed share prices of each stock could offer a buying opportunity depending on your investment style.
The Resource Speculator
The term speculator is perhaps a little harsh given Western Deserts Resources Ltd’s (ASX: WDR) Roper Bar iron ore project recently entered production, thereby removing a significant proportion of the risk involved with investing in early stage resource plays.
However despite announcing on 19 December 2013 that its inaugural export shipment had been loaded, the market (surprisingly) has marked down the stock price since that time by 47%.
While the exact reason for the heavy fall is its share price is unclear, a recent $60 million capital raising may have weighed on Western Deserts stock; adverse weather, transportation difficulties and a lower iron ore price have played their parts too.
With a current market capitalisation of $240 million and a resource which is expected to ramp up to 3Mtpa of production there could be significant upside from here.
Southern Cross Media Group Ltd (ASX: SXL) operates regional television broadcasting and a stable of popular FM radio stations across Australia. The stock is currently registering a loss of 21% over the past 12-months with the share price at a 52-week low of $1.23. Despite Fairfax Media Limited (ASX: FXJ) regaining some popular support recently, overall the media sector still appears to be on the nose with investors. This situation has perhaps opened up a great buying opportunity in Southern Cross Media’s stock. Analyst consensus (Morningstar data) forecasts earnings of 12.9 cents per share for the current financial year (FY), with those earnings growing to 14.2 cps in FY 2015. Based on these consensus numbers, Southern Cross is trading on a prospective price-to-earnings ratio of 9.4 and 8.5 respectively.
The High Yield Seeker
McPherson’s Ltd (ASX: MCP) supplies products which would be familiar to many readers including cutlery brand Wiltshire, beauty care brand Swisspers and kitchen essentials brand Multix. A difficult retail environment has affected the wholesaler’s earnings which saw interim underlying earnings per share fall 21.7% half-on-half. The share price has in turn fallen 51% to not just a 52-week low but a five-year low as well.
Despite the retail headwinds, analyst consensus has McPherson’s still managing to pay a 9.6 cent fully franked dividend this financial year, and rising to 12.5 cents in FY 2015. On that basis the stock is trading on a forward dividend yield of 8.8% and 11.5% respectively.