With the market sinking deep into the red once again, it will come as no surprise to learn that several shares have dropped to 52-week lows or worse.
Three that caught my eye today are listed below. Is this a buying opportunity?
The AGL Energy Ltd (ASX: AGL) share price fell to an 18-month low of $19.40 in morning trade. Concerns about competitive pressures and regulatory scrutiny have weighed heavily on its shares. Unfortunately, this may not be the bottom for AGL Energy’s shares if one leading broker is to be believed. A note out of Credit Suisse today reveals that it has downgraded its shares to an underperform rating with a $17.70 price target. I would stay away from energy retailers until after the next election as I suspect electricity prices will be a hot topic.
The Class Ltd (ASX: CL1) share price dropped to a two and a half year low of $1.88 on Friday. Investors appear to have been concerned at the self managed super fund platform provider’s slowing growth. Class posted a net profit after tax of $8.7 million in FY 2018, up 9% on the prior year. Earnings per share came in at 7.4 cents, meaning its shares are changing hands at 25x earnings. Unless its growth accelerates, I feel this could prove expensive and could push its shares lower.
The Netcomm Wireless Ltd (ASX: NTC) share price has tumbled to a multi-year low of 70 cents on Friday. Although in FY 2018 the technology equipment company achieved impressive revenue growth of 69% and saw EBITDA increase 5.7 times on the prior corresponding period, its guidance for the year ahead has led to a sharp selloff. Management expects flat underlying EBITDA in FY 2019 due to lower margins as its sales mix changes shifts to lower margins products and component costs increase. I think it could be worth a look at these levels, though, especially with management expecting its growth to accelerate again in FY 2020.
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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 Class 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.