If you're like me, you like to buy a bargain. Whether I'm shopping for socks, a television, a car, property or shares, a discounted price always puts a smile on my face.
So when a stock hits new 52-week lows, I start to get interested.
There are lots of great companies out there, the problem is that most of the time everyone thinks they're great too, so they're priced accordingly….every once in a while though the market sells stocks off indiscriminately – creating the opportunity to buy great companies at great prices!
Now I wouldn't go so far as to say the market has reached the point of 'indiscriminate selling' but the S&P/ASX 200 (INDEXASX: XJO) is down over 5% in the last month which is a hefty fall.
The situation has meant a number of quality companies which are on my watchlist are now selling at lower prices and while I might not be buying them just yet – I certainly am watching!
Here are three that I'm keeping my eye on.
Leading global travel agent Flight Centre Travel Group Ltd (ASX: FLT) has dropped 19% in the last six months putting the company on close to the market average with a forecast price-to-earnings (PE) ratio of 15.3x and fully franked dividend yield of 3.9%.
Iluka Resources Limited (ASX: ILU) mines mineral sands and is a leading global producer of zircon which has end applications for a number of industries including ceramics. The stock price of this $3.3 billion company has fallen 21% over six months.
National Australia Bank Ltd. (ASX: NAB) is in many ways the 'ugly duckling' of the 'Big Four' banks. Its share price has fallen around 8% in the last six months but there are reasons to be more positive about the bank's future prospects. Firstly, the group has committed to reducing the drag from its underperforming overseas operations – the recently announced initial public offering of one of its US-based businesses is an example of this. Secondly, the stock is priced on a forward PE of 12.3x and dividend yield of 6.2% which is more appealing than its peer group – this should provide share price support.
Wait and See
These three stocks are certainly looking more appealing now than they were six months ago, but personally I'd like them to be a little cheaper before I bought them. In comparison there is a tech stock which I'm keen to buy right now…
