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These shares just sank to 52-week lows

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With the market dropping notably lower today, it will come as no surprise to learn that a number of shares have sunk to 52-week lows.

Three that caught my eye are listed below. Is this a buying opportunity?

The Caltex Australia Limited (ASX: CTX) share price has bounced back now, but earlier today hit a 52-week low of $28.44. The fuel retailer has come under pressure in recent months after the ACCC blocked its attempt to acquire petrol stations owned by Woolworths Group Ltd (ASX: WOW). In addition to this, there is now speculation floating around that Puma Energy might be interested in acquiring these petrol stations. Not only would this bring another player into the market to compete with, but I suspect Puma Energy would be unlikely to contract Caltex to continue supplying these petrol stations. This could hurt its future earnings. So while it shares do look reasonably priced now, I would suggest investors stay clear of Caltex until the new owner of these petrol stations is known.

The Ellex Medical Lasers Ltd (ASX: ELX) share price tumbled to a 52-week low of 55.5 cents on Wednesday. Ellex is a medical device company focused on the development, manufacture and sale of lasers and diagnostic equipment for the treatment of eye diseases. It appears as though investors have been thoroughly disappointed by the sudden deterioration in the company’s financial performance. Although Ellex delivered record revenues of $38.2 million in the first half, it posted a net loss after tax of $2.4 million. In the prior corresponding period the company achieved a profit after tax of $1 million. While I think Ellex could be worth considering due to its undemanding valuation and sizeable market opportunity, it may be prudent to wait to see if its financial performance has improved in the second-half.

The Somnomed Limited (ASX: SOM) share price has continued its decline and hit a 52-week low of $2.40 today. This means the sleep treatment company’s shares have now lost over a third of their value since the turn of the year. Like Ellex, Somnomed has been impressing on the top line but not on the bottom line. Last week the company advised that in FY 2018 revenue is expected to grow by a sizeable 32% to 34% year-on-year to $65 million to $66.2 million. However, despite the strong top line growth the company expects to post an EBITDA loss of between $6.6 million and $7.4 million. While its decline this year has brought its shares down to an attractive level, I think there are better and less risky options in the sleep treatment industry for investors to choose from.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Ellex Medical Lasers Limited. 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 Scott Phillips.

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