I love finding businesses where the valuations are at really appealing prices. When growing S&P/ASX 300 Index (ASX: XKO) shares are trading near 52-week lows, I get very interested.
It's important to remember that share prices are volatile and they can't always be trading near 52-week highs. Reaching a 52-week low doesn't mean they'll keep falling.
Some investors may have been expecting the Reserve Bank of Australia (RBA) to start cutting interest rates this year. But now that it has happened, I'm surprised some stocks are still trading at such a low valuation.
Lower interest rates are meant to help asset valuations, including ASX 300 stocks, in theory. So, with the below two names struggling near 52-week lows, it could be a good time to invest in these businesses.
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Rural Funds Group (ASX: RFF)
Rural Funds is part of a group of my preferred real estate investment trusts (REITs) that aren't being challenged by e-commerce trends or the work from home shift. I'm a fan of both industrial properties and farmland.
This ASX 300 share owns a portfolio of farm types including cattle, vineyards, almonds, macadamias, and cropping.
As the chart below shows, it has been a rough period for the farmland owner since the start of 2022 – it's down more than 40% since then.
The business recently reported its FY25 half-year result, with the rental profit and distribution going according to plan. The adjusted funds from operations (AFFO) – the net rental profit – increased by 42%. It was driven by higher income thanks to its capital expenditure on macadamia orchards, the rental indexation, and rental review mechanisms.
For me, the ASX 300 share's rental growth is one of the main reasons to like the business because its rent is contracted to grow, with some leases having fixed annual rises and others being linked to inflation, plus market reviews.
It said that its adjusted net asset value (NAV) was $3.10 at the end of December 2024, meaning the Rural Funds share price is trading at a discount of close to 45% to this figure.
The business also noted it's going to pay an annual distribution per unit of 11.73 cents in FY26, which currently translates into a forward distribution yield of 6.9%.
Reece Ltd (ASX: REH)
Bathroom and plumbing business Reece has seen its share price fall by around 20% since 28 February 2024, as shown on the chart below.
The ASX 300 share has 661 branches in Australia and New Zealand, with another 243 locations in the US, largely in the southern 'sunshine belt' states.
With interest rates lower in both the US and Australia, the business is positioned to benefit in the longer term, in my view, assuming the economies of both countries improve from here.
Lower interest rates could lead to more construction and renovation activity, which should increase demand for Reece
It's true that US homebuilders are concerned about the US tariffs, which is hurting sentiment and may be impacting investors' thoughts on Reece.
However, I don't think demand for Reece's products will be weak forever, so this could be a good time to invest. Plus, it continues to expand its networks in ANZ and the US, increasing its ability to make profits.
