Leading investor and multi-billionaire Warren Buffett was in the market buying stocks last week according to an interview he gave with CNBC.
The ever-logical Buffett commented in response to the Dow Jones’s significant drop last Wednesday that he likes to buy stocks when their prices go down – not the other way around.
Buffett’s view of course makes perfect sense – who doesn’t want to get something for less?
Just as the volatility created opportunities for Buffett to buy stocks he liked last week at lower prices, Australian investors likewise have had a similar opportunity on the ASX.
A significant number of top stocks hit new 52-week lows and possibly they are now priced attractively enough to warrant buying.
Here are four stocks which I believe could be worth adding to your watchlist.
Crown Resorts Ltd (ASX: CWN) closed on Friday at $13.62. Morningstar forecasts the stock to trade on a financial year (FY) 2015 price-to-earnings (PE) ratio of 15x which is below the forecast PE of 16.1x for the S&P/ASX 300 (INDEXASX: XKO).
Meanwhile, Myer Holdings Ltd (ASX: MYR) closed at $1.90 which implies the stock is trading on a forecast PE of 12.1x which is well below the market multiple, however a 3.9% decline in earnings per share in FY 2015 is predicted according to Morningstar.
AGL Energy Ltd (ASX: AGK) shares closed at $13.40 which is a multi-year low for the stock. With Morningstar’s data suggesting EPS will drop 2.5% in FY 2015 before rocketing 23% in FY 2016, the PE of 13.6x could hold appeal.
Downer EDI Limited (ASX: DOW) also set a new 52-week low of $4.21 last week. At this price, Morningstar’s data is forecasting a PE of 9.7x for FY 2015. Downer EDI is expected to produce flat earnings per share over the next two years.
Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.
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