The S&P/TSX Composite Index was up 54 points in early afternoon trading on February 25. Last week, I’d discussed whether the TSX index was overpriced. Many of the top constituents on the TSX have climbed into the top end of the 52-week price range. Today, we are going to focus on two stocks that have hovered around 52-week lows in recent weeks.
Investors who are eager to buy in late February may be on the hunt for bargains right now. Do either of these equities fit the bill? Let’s find out.
Maxar Technologies (TSX:MAXR)(NYSE:MAXR)
Maxar Technologies stock has dropped 43.4% in 2019 as of this writing. The stock has plunged 85% year over year. Shares reached a 52-week low of $6.32 in late January. Maxar’s stock dropped to its lowest point in its history in late 2018 and early 2019.
Maxar is set to release its fourth-quarter and full-year results for 2018 on February 28. In the prior quarter, Maxar reported a net loss of $432.5 million as Maxar’s GEO Communications segment posted a 31% year-over-year decline. In January, Maxar lost a significant revenue-generating satellite. This will put a large dent in its revenue stream going forward.
In December, I’d discussed whether Maxar stock was worth picking up. Maxar stock dropped well into oversold territory after announcing the loss of its satellite, but the stock has since climbed into neutral territory. The stock does boast a 16% dividend yield, but this could be at risk in the coming quarters.
Uni-Select is a Quebec-based distributor of automotive products and paint and related products for motor vehicles. Shares of Uni-Select have plunged 35.8% in 2019 as of early afternoon trading on February 25. The stock is down 46% year over year.
The company released its fourth-quarter and full-year results for 2018 on February 20. Consolidated sales rose 21% from 2017 to $1.75 billion. This was driven primarily by growth from recent business acquisitions. Organic growth stood at only 1.5% for the year.
Uni-Select’s adjusted EBITDA margin fell by 130 basis points in the face of pricing pressure and shifting customer mix, which impacted performance in its FinishMaster U.S. segment and Canadian Automotive Group segment. Adjusted earnings fell to $51.5 million compared to $55.1 million in 2017. Headwinds like acquisition costs and higher debt were partially offset by lower tax rates in the United States.
The board of directors declared a quarterly dividend of $0.0925 per share, which represents a 2.9% yield. As of this writing, the stock had an RSI of 19, which indicates that it has dropped well into oversold territory. However, shares were up 4.01% during trading as of this writing.
Uni-Select is projecting modest revenue growth in 2019, while it expects profitability to decline marginally over the course of the year. Shares of Uni-Select may be a bargain, but investors should expect continued volatility in the struggling automotive sector heading into the next decade.
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Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. Maxar is a recommendation of Stock Advisor Canada.
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