Santos Ltd, Maca Ltd and AGL Energy Ltd: Which stock can bounce back?

These three energy companies are all at 52-week lows. But are they good long-term buy and holds?

| 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

Shareholders in some well known and widely-owned companies have watched their share prices sink to new 52-week lows recently. It's a bitter pill to swallow and for some investors it's more pain than they can take, leading them to sell.

Unfortunately this is almost always the wrong moment to sell.

Instead of selling and turning a paper loss into a real capital loss, investors need to focus on the underlying economics of the businesses in their portfolio and determine a conservative appraisal of their value. If the price remains above their calculation of value then they should keep holding the stock.

The following three companies have all recently touched new lows and while the timing of a rebound would be nothing more than a guess, the potential for a rebound at some point in the future looks pretty good.

The share price of oil and gas major Santos Ltd (ASX: STO) touched $12.90 this week which is a level not seen since July 2013. Despite providing negative returns to shareholders over the past one and five years, the future is looking bright for shareholders thanks to the massive exposure the group has to LNG projects.

Add to that consensus estimates which suggest the stock is trading on a FY 2016 price-to-earnings ratio of 13x and dividend yield of 4.5% and there are reasons to expect a bounce back in price.

Maca Ltd (ASX: MLD) is a contractor of mining and civil engineering services. The company obviously operates within an industry that is facing headwinds, however, a number of brokers have share price targets which are significantly above where the stock currently trades.

AGL Energy Ltd (ASX: AGK) recently completed a rights issue to help fund its acquisition of electricity generation firm Macquarie Generation. The offer of shares was priced at $11 which was appealing for shareholders as the stock was trading around $14 at the time. With a commanding position in the Australian energy market, blue-chip status and trading on a forecast PE of 14x and a yield of 4.8%, shareholders will likely see higher prices for AGL in the future.

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

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 »