Hi there, Fools. I’m back to call attention to three stocks at new 52-week lows. Why? Because the big gains in the stock market are made by buying attractive companies:
- during times of maximum investor pessimism; and
- when they’re available at a clear discount to intrinsic value.
As legendary value investor Warren Buffett once quipped, “Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”
Let’s get to it.
Leading off our list is toy maker Spin Master (TSX:TOY), which is down a whopping 20% over the past year and currently trades near 52-week lows of $30 per share.
The stock has slumped on disappointing growth, with the latest 9% decline coming after Tuesday’s downbeat guidance announcement.
Management now says that full-year 2019 gross product sales will be flat relative to 2018. Spin Master cited distribution headaches, trade disputes, and softness in the U.S. market for the disappointing outlook.
“I think we had a bit of hubris,” said co-founder and co-CEO Ronnen Harary. “We were gunning for consolidation, cost savings, integration, all these things in the midst of all these macro factors.”
On the bright side, Spin Master now trades at a forward price-to-earnings in the high teens.
Kicked to the dirt
Next up, we have interior construction company DIRTT Environmental Solutions (TSX:DRT), whose shares are off about 40% over the past year and currently trade near 52-week lows of $3.70.
Declining revenue, operational hiccups, and overall economic concerns continue to weigh heavily on the stock. In the most recent quarter, revenue declined 12% while gross margin narrowed to 38.1% from 40.7% in the year-ago period.
On the bullish side, earnings per share of $0.07 easily topped expectations, suggesting that much of the bear case is already baked into the shares.
“While 2019 has been a challenging year and we are clearly not satisfied with the results, it is a transition year,” said CEO Kevin O’Meara. “We have made significant strides toward enhancing our management team, our commercial organization, and marketing strategy.”
DIRTT shares trade at a forward P/E in the high 20s.
Mine your business
Rounding out our list is uranium miner Denison Mines (TSX:DML), which is down 21% over the past year and currently trades at 52-week lows of $0.50 per share.
Disappointing revenue amid sluggish uranium prices continue to pressure the shares. In the most recent quarter, for example, EPS clocked in at -$0.01 as revenue declined 7% to $3.5 million.
On the bright side, management remains optimistic about the long term due to its key high-grade Phoenix deposit, as well as the new mining process, In-Situ Recovery (ISR), it is currently testing.
“With the final stages of the 2019 ISR field test program planned for completion in the fourth quarter, we are beginning to look forward to 2020 and beyond, as we accelerate towards bringing Phoenix to life as an ISR mining operation with potentially industry leading costs,” said CEO David Cates.
Denison currently trades at a price-to-sales of 20.
The bottom line
There you have it, Fools: three ice-cold stocks worth checking out.
As always, don’t see them as formal recommendations. Instead, view them as a starting point for more research. Trying to catch a falling knife can be hazardous to your wealth, so plenty of homework is still required.
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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of and recommends Spin Master.
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