Is it time to pounce on 1-Page Ltd, Select Harvests Limited, and Woodside Petroleum Limited?

Credit: Matt Biddulph

The S&P/ASX 200 (INDEXASX: ^AXJO) (ASX: XJO) index has lost 16% for the year. Rather than all stocks falling an equal amount however, this actually means that some have fallen substantially further, while others haven’t moved at all or have risen.

Here are three stocks that recently hit a new 52-week low, and my take on whether they’re good value today:

1-Page Ltd (ASX: 1PG) – last traded at $1.02, down 44% for the year

1-Page’s woes are pretty straightforward – the company is spending a lot of cash, but isn’t making any money. Investors appear to be concerned that the cash expenditure is accelerating but isn’t generating a corresponding return on the company’s investment (yet). The good news is that 1-Page has enough cash for around two years of operations at its planned cash burn rate of US$2 million per month. So there is plenty of time for the company to take market share and begin ramping up revenues.

The bad news is that shares could well fall further if growth takes longer to materialise than investors are comfortable with. Today’s prices could be a good entry point for a speculative investor.

Select Harvests Limited (ASX: SHV) – last traded at $4.26, down 44% for the year

After hitting a low of $3.73 on Tuesday, Select Harvest shares have undergone a mini-renaissance, probably due to bargain hunters. The company does appear exceptionally cheap, trading at an estimated ~7 times full-year 2016 profit. This figure is slightly higher if a pre-tax gain on sale is excluded from the recent results. It seems that shares have been falling in anticipation of a decline in the value of almonds, and management acknowledged this in a market release in January. Select Harvests is doing all the right things in terms of adding scale to its operations and developing value-added products, but as a minority producer it is quite vulnerable to global supply and demand.

Shares could fall further if almond prices materially decrease, but for investors looking for exposure to food products, who have the ability to ‘look through’ the cycle, it’s hard to go past Select Harvests.

Woodside Petroleum Limited (ASX:WPL) – last traded at $24.90, down 28% for the year

Woodside’s decline has been well covered, with weak oil and gas markets hammering its profitability. Shares declined most recently after Woodside and partners decided not to proceed with its Browse Joint Venture project until LNG markets improve. Although a disappointment for shareholders, the decision preserves Woodside’s strong financial position, which is probably the primary consideration in present market conditions. With revenues still plummeting compared to previous periods, it’s hard to argue that Woodside offers compelling value at today’s prices.

I expect that shares will fall further as lower prices make their way through to the company’s bottom line. However, as with Select Harvests above, Woodside is one of the better ‘through the cycle’ plays for oil and LNG exposure.

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Motley Fool contributor Sean O'Neill has no position in any stocks mentioned. 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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