3 stocks hitting 52-week lows – is this the bottom?

What do a mining services company, a crowdsourcing marketplace and an aged care provider all have in common?

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

In short, the only commonality between the three shares in this week's lows is the fact that they're all at their lowest point this year. Boart Longyear Ltd. (ASX: BLY) has been stunned by the virtual evaporation of its business; Freelancer Ltd (ASX: FLN) is returning to reality after last year's hottest IPO, and Japara Healthcare Ltd (ASX: JHC) is trending down with shareholders anticipating the withdrawal of government subsidies.

Boart Longyear – down 82% in the past year, last traded at $0.093.

It's been a long fall for Boart Longyear, down from over $15 in 2008, to $4 in 2012, to its current price of less than ten cents apiece. Much of that is due to the slowdown in the resources sector, reducing demand for the drilling company's services. Weak resource prices and reduced levels of mining exploration and activity – not to mention debt – look likely to keep Longyear's earnings subdued for the foreseeable future, and I personally would be steering clear of Boart Longyear.

It is worth noting, however, that according to Morningstar estimates Longyear is trading at 56% below its 'intrinsic value', making it a potential value purchase for investors who are set on owning this company.

Freelancer – down 66% in the past year, last traded at $0.855.

Freelancer is finally returning to reality after an awe-inspiring IPO that saw it reach intra-day highs of $2.50 before closing at $1.60 – up from an issue price of $0.50. Full-year results for 2013 were solid, with earnings up 3% while revenue rose 77%.

It's still too difficult to value Freelancer owing to the less tangible nature of the business – Net Tangible Assets (NTA) equate to only 2 cents per share as at the 2013 report. However with that said, price falls considerably increase Freelancer's appeal, and if the company can increase the portion of its revenue that it receives as profit, this could well be the next Amazon.com. I would watch things develop from the sidelines in the meantime.

Japara Healthcare – down 7% in the past year, last traded at $2.25.

Japara is the only share from today's article to occupy a place on my buyer's radar, with its long-term business prospects looking attractive. The average lifespan of Australians has increased almost linearly over the last 40 years, and fertility rates hover broadly around (varying by demographic) the replacement rate of two children per couple.

Thanks to these statistics, the number of elderly people is increasing quickly, which puts a good long-term wind into the sails of Japara Healthcare. The company's share price has been down lately though after the removal of a government subsidy for dementia and changes to payroll tax, earnings look likely to reduce for FY2015.

I personally am waiting for an announcement to revise or confirm earnings guidance before buying, but Japara looks like a good long-term purchase either way.

If you're after a few more buying ideas, why not check out our free newsletter, Take Stock? It's packed full of investing tips and the latest on a number of shares on our watchlist. Simply click here and enter your email address – it takes less than thirty seconds. As part of signing up, you'll also receive our FREE guide on making money in the share-market.

Motley Fool contributor Sean O'Neill doesn't own shares in any company mentioned.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »