What: By the close of trade on Tuesday Seven West Media Ltd (ASX: SWM), Primary Health Care Limited (ASX: PRY) and Crown Resorts Ltd (ASX: CWN) had all hit new 52-week lows. That’s not a pleasant position for shareholders to be in but for those considering topping up their shareholding now could be an opportune time.
Why: In the case of Seven West it would appear to be a case of ‘good company-bad industry’ with the latest monthly data showing Seven continued to increase its dominance of the free-to-air advertising market but it was within the context of an overall fall of 7% in market size.
The reason for Primary’s decline is less obvious; as I stated here, the full year results and pricing looks reasonably compelling.
Finally, Crown’s new low may partially be explained by a recent ABC program which offered up a number of concerning questions about the operations of the casino group.
What now: These three companies all have appealing assets and are run by their founders who continue to have significant ‘skin in the game’. While that doesn’t guarantee success, strong, engaged management is a key to a successful long-term business.
In the case of Seven West and Primary both stocks are now actually trading at levels approaching two-year lows and on multiples below the market average. While there is of course nothing stopping the stocks getting cheaper, in the case of Seven West and Primary their appealing dividend yields could create support at current prices.
Meanwhile, investors may want to wait and see how Crown responds to the allegations from the ABC report and monitor developments from any political fallout.
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Motley Fool contributor Tim McArthur owns shares in Primary Health Care Ltd.
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