Although public companies that suffer staggering losses often do so for good reason, sometimes, it might be worthwhile to take a shot with stocks at 52-week lows. Some of the justification comes down to the mechanics of contrarianism. Essentially, traders who shorted troubled securities need to exit their positions. For the bears, this exiting necessitates buying back borrowed shares, thus sparking bullish momentum.
In other cases, certain enterprises may be overlooked and/or undervalued. With so many people having access to the internet these days, it’s rarer to find truly overlooked opportunities. Nevertheless, the number of publicly available securities also increased, meaning that some organizations invariably won’t get the attention they deserve. So, if you’re ready to gamble with the speculation side of your portfolio, these are the stocks at 52-week lows.
|JNJ||Johnson & Johnson||$152.92|
Grocery Outlet (GO)
An American discount closeout retailer consisting exclusively of supermarket locations that offer deeply discounted, overstocked, and closeout products from name brand and private label suppliers, Grocery Outlet (NASDAQ:GO) fundamentally offers much relevance. With many consumers struggling, people can use a discount. However, the market hasn’t been too kind to GO stock.
Since the Jan. opener, GO dipped over 6%. And in the trailing year, it’s down 10%. While it’s not the most horrific of losses, GO technically finds itself as one of the stocks at 52-week lows. However, this could set up a contrarian opportunity. Financially, investors enjoy some positive attributes. For instance, its three-year book growth rate stands at 10.9%, above 69% of the competition. As well, its gross margin pings at 30.52%, ranked higher than nearly 73% of its peers.
Finally, Wall Street analysts peg GO as a consensus moderate buy. Their average price target is $30.75, implying over 14% upside potential.
Johnson & Johnson (JNJ)
On paper, healthcare giant Johnson & Johnson (NYSE:JNJ) ranks among the most relevant market ideas. With so many revenue-generating avenues, JNJ offers relative security during these shaky times. However, it also happens to be one of the stocks at 52-week lows.
Since the start of the new year, JNJ uncharacteristically cratered, giving up almost 14% of equity value. In the past 365 days, it slipped nearly 9%. However, this also makes for a compelling opportunity for contrarians. For one thing, Gurufocus.com’s proprietary calculations for fair market value (FMV) rate JNJ as modestly undervalued. Also, the company enjoys excellent operating and net margins.
Plus, you can’t ignore Johnson & Johnson’s passive income. Currently, it carries a forward yield of 2.93%. As well, it features 61 years of consecutive annual dividend increases. Lastly, covering analysts peg JNJ as a consensus moderate buy. Further, their average price target stands at $183.10, implying nearly 19% upside potential.
Although pharmaceutical giant Pfizer (NYSE:PFE) contributed greatly to the normalization of society following the coronavirus pandemic, it’s not quite getting lasting credit for that effort. Since the January opener, PFE dropped over 21% in equity value. Therefore, in the past 365 days, PFE declined by 15%. Subsequently, it’s one of the stocks at 52-week lows.
Strictly by its chart performance, circumstances don’t look great for PFE. However, Gurufocus.com rates shares as significantly undervalued based on its FMV calculations. Objectively, the market prices PFE at a trailing multiple of 7.36. As a discount to earnings, Pfizer ranks better than 90.59% of the field. Also, PFE trades at a forward multiple of 11.72. Here, the company ranks better than 69.53% of sector peers.
As with Johnson & Johnson above, prospective investors can’t ignore passive income. Right now, Pfizer carries a forward yield of 4.07%. Its payout ratio also sits at 42.17%, which is favorably low. Turning to Wall Street, analysts peg PFE as a consensus moderate buy. Also, their average price target stands at $49.67, implying over 23% upside potential.
Sirius XM (SIRI)
Before mentioning satellite radio specialist Sirius XM (NASDAQ:SIRI) as one of the stocks at 52-week lows, I recognize that SIRI carries serious risks. Even for some hardened contrarian investors, SIRI might be too rich for the blood in terms of risk magnitude. Since the Jan. opener, shares plunged nearly 30% in equity value, which is simply staggering. In the past 365 days, SIRI plunged over 36%.
Primarily, Sirius suffered from investor fears as management revealed weaker-than-expected 2023 financial guidance. The outlook reflected softer consumer spending in general and weak auto sales in particular, according to Barron’s. Not surprisingly, Gurufocus.com warns that Sirius represents a possible value trap.
Still, the company does offer some positive attributes, including sector-median-beating three-year revenue growth (10.2%) and trailing net margin (13.47%). Fundamentally, the return-to-office movement and the normalization of society could eventually boost Sirius’ membership stats. Still, it’s a longshot bet, as evidenced by analysts’ consensus hold view. Nevertheless, the average price target for SIRI stands at $5.65, implying over 39% upside potential.
Signature Bank (SBNY)
Based in New York, Signature Bank (NASDAQ:SBNY) is a full-service commercial bank with 38 private client offices throughout Connecticut, California, North Carolina, and its home state. Through its subsidiaries, Signature provides services such as equipment finance and leasing, and asset management. While relevant in perhaps most other contexts, Signature now carries risks because of the hawkish monetary environment.
Specifically, Federal Reserve Chair Jerome Powell recently testified before Congress. Acknowledging better-than-expected economic data, Powell opened the door to further and quicker-paced interest rate hikes. Given the associated rise in borrowing costs, not too many entities will be interested in loans, thus hurting Signature Bank. To be sure, SBNY easily ranks among the stocks at 52-week lows, shedding over 63% in the trailing year.
Still, contrarians might view SBNY as a buy-the-dip opportunity. For instance, the market prices shares at a forward multiple of 7.12. As a discount to earnings, Signature ranks better than 71.39% of the field. Looking to the Street, analysts peg SBNY as a consensus moderate buy. Further, their average price target stands at $147.40, implying almost 41% upside potential.
Gen Digital (GEN)
A multinational software company, Gen Digital (NASDAQ:GEN) provides cybersecurity software and services. On paper, Gen Digital offers an incredibly relevant business. During the Covid-19 crisis, cyberattacks increased significantly in scope and scale. Further, they can impose crippling damage to enterprises, making online protection vital. Unfortunately, the market has other ideas.
Since the start of the year, GEN gave up almost 14% of its equity value. And in the past half-year period, 20% of the value just disappeared. Still, among the stocks at 52-week lows, GEN presents an enticing profile. After all, the cybersecurity industry is practically guaranteed to rise in relevance.
Fiscally, it’s difficult to read Gen Digital. For instance, Gurufocus.com warns that GEN is a possible value trap. However, the company enjoys significant operational strengths. Its three-year EBITDA growth rate (25%) and trailing net margin (17.83%) rank within the underlying sector’s top tier. As well, the market prices GEN at a forward multiple of 8.78. In contrast, the sector median value pings at a lofty 24.39. Finally, covering analysts peg GEN as a consensus moderate buy. Moreover, their average price target stands at $27.50, implying over 47% upside potential.
A Brazilian petrochemical company, Braskem (NYSE:BAK) would appear to be one of the compelling stocks at 52-week lows. After all, the combination of geopolitical flashpoints and global inflation cynically bolsters enterprises tied to critical resources. However, other concerns such as domestic stability also weighed in. Ultimately, the market currently doesn’t like BAK.
Since the Jan. opener, BAK dipped over 5%, which is disappointing given the spike in several securities received in the new year. But much worse is the trailing-year performance, with BAK hemorrhaging nearly 55% of equity value. Despite major concerns, Braskem features certain attractive fiscal qualities. Notably, its three-year revenue growth rate stands at 22.1%, outpacing 87.14% of the industry. Also, its free cash flow growth rate during the same period came out to 20.1%. This metric beat out 67.46% of its competitors. Turning to the Street, covering analysts peg BAK as a consensus moderate buy. Notably, their average price target stands at $16, implying almost 104% upside potential.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.