MENU

Have these 4 stocks entered the buy zone after hitting 52-week lows?

Some investors must surely be getting excited at the prospect of buying beaten-up stocks following the retracement in the S&P/ASX 200 (INDEXASX: XJO).

Two sectors of the market which have experienced their fair share of price falls are the retail and media sectors, with a number of high profile companies pummelled by investor selling.

The Retailers

Amongst retail stocks that have been sold down, two stand-outs are Myer Holdings Ltd (ASX: MYR) and Kathmandu Holdings Ltd (ASX: KMD). Both have just hit new 52-week lows. Just six months ago Kathmandu was trading around 25% higher than it is today, meanwhile Myer is down almost as much (22%) in the last six months.

Arguably these price declines have sent Myer and Kathmandu into buy territory. Based on Morningstar’s data Myer is trading on a forward price-to-earnings (PE) ratio of 11.8x and a dividend yield of 7.8%. Kathmandu’s metrics are also appealing – given its greater earnings growth potential – with a forecast PE and yield of 13.4x and 3.9%.

The Media players

Likewise Southern Cross Media Group Ltd (ASX: SXL) and Ten Network Holdings Limited (ASX: TEN) are both also at new 52-week lows. Radio and regional television broadcaster Southern Cross has seen its share price slump 28% in six months, while Ten Network’s share price has continued its downward trend, losing a further 16%.

Although there are structural issues facing these two media companies which does make forecasting difficult, their share prices may currently reflect these concerns. Southern Cross is trading on a forecast PE and yield of 8.8x and 7.2% which looks somewhat compelling. Ten Network’s metrics are clouded by expected losses, but talk of corporate activity could see the market reappraise its long-term value.

Fishing amongst beaten-up stocks can make you a fortune but buying our #1 tech stock just might make you even more!

Attention investors: The Motley Fool has just released a special video report on our analysts' #1 ASX tech pick -- all about the one Australian company poised to win big from the 'cloud computing' trend. (Hint: The shares are already up over 100%!) Click here to claim your FREE copy.

Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.