3 shares trading at 52-week lows: Is it time to pick up a bargain?

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With the S&P/ASX 200 (Index: ^AXJO) (ASX:XJO) trading near its yearly lows, it is unsurprising to see a large number of companies trading at or near their 52-week lows.

It will also be unsurprising to investors that the majority of companies trading at these levels are exposed to the energy and commodity sectors. With the outlook for both the energy and commodity markets still unclear, it is likely that these companies will remain a feature in this unenviable list for some time.

Perhaps more interestingly, however, are those companies that have no exposure to the commodities market but are still trading at yearly lows. They come from a diverse range of sectors and include:

1. Woolworths Limited (ASX: WOW) – Earlier this year, after much consideration, I decided to buy shares in Woolworths, and although I am now sitting on a loss of around 5%, I am still comfortable with my position as it stands.

Few (if any) of the headwinds facing the company have been resolved and it remains without a CEO to steer the ship in the right direction.

Despite this, I am confident about the long-term potential within the Woolworths network of brands and the competitive advantages it has developed over its competitors.

While I still think a share price recovery could be more than 12 months away, the share price may show signs of life if the company can instil some much needed confidence into the market through strong leadership and management.

2. Primary Health Care Limited (ASX: PRY) – A profit downgrade provided by Primary Health Care in November has accelerated the share price decline which had already been in a downtrend since April.

A large proportion of Primary Health Care’s revenue comes from Medicare through bulk billing services and the ongoing Federal review of Medicare Benefits is having a negative impact on earnings. The company now expects underlying profits to be around five per cent lower in FY16 as a result of the regulatory uncertainty and subdued market conditions in some of its markets.

Although the share price has fallen by nearly 50% since April, I would still suggest investors remain cautious towards investing in Primary Health Care until the findings of the Medicare review are completed and the impact on future earnings is established.

3. Shine Corporate Ltd (ASX: SHJ) – The share price of Shine has fallen in sympathy with that of embattled law firm Slater & Gordon Limited (ASX: SGH).

Unlike Slater & Gordon, Shine does not have any exposure to the UK market or any issues associated with accounting discrepancies.

Despite this, sentiment in the legal sector has fallen significantly and investor enthusiasm towards Shine has all but disappeared.

Interestingly, the company expects earnings to increase by up to 27% in FY16 and has continued acquiring legal practices that are earnings per share (EPS) accretive.

With the shares trading on a price-to-earnings ratio of less than 10, I feel the stock is truly undervalued and would happily be a buyer at current levels.

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Motley Fool contributor Christopher Georges owns shares in Woolworths and Shine Corporate. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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