While the sell-off in iron ore stocks such as Fortescue Metals Group Limited (ASX: FMG) in response to the weakening outlook for the iron ore price is understandable, it appears that people’s fears may be spreading.
Certainly the link between a slowing Chinese economy, a weakening outlook for iron ore and the flow on effect to the Australian economy is concerning, however any indiscriminate selling could create opportunities for savvy investors to go bargain hunting and swoop on undervalued stocks.
Here are four companies whose share prices recently hit new 52-week lows and could be worth a closer look –
Bradken Limited (ASX: BKN) has sunk to a new low after announcing a restructuring of its cost base which will see the equipment maker lay-off around 10% of its workforce. It’s an unpleasant situation for employees, and obviously reflects a difficult trading environment. If the company can right-size its cost base however, a floor to the share price will be established.
Southern Cross Media Group Ltd (ASX: SXL) is suffering from the dual effects of a weak advertising market and the loss of key radio talent. The stock is down 29% for the year and while the industry may continue to face headwinds, Southern Cross could find itself attracting the attention of suitors if regulatory changes occur and its share price remains at these levels.
Super Retail Group Ltd (ASX: SUL) spent the first half of this year riding high and in favour with investors. The last six months however has seen the stock fall 35% to levels last seen in 2012, as the company has reported weakening sales and investors became increasingly concerned about the outlook for retailers on the back of a belt tightening Federal Budget.
Trade Me Group Ltd (ASX: TME) appears to have been swept up in the tech sell-off which has claimed the scalps of a number of previous high fliers. Shares in the New Zealand-based online marketplace and classifieds platform still trade well above their 2011 IPO price, but have fallen 23% for the year. Given the long-term tailwind for online sales, Trade Me is worth keeping tabs on.
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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.
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