Another week of 2014 is in the books, and for these three companies trading at 52-week lows, it was a week to forget.
Sherritt International (TSX:S)
This coal, oil and nickel producer took a drop on February 20 and posted a new 52-week low of $2.82. Several factors have culminated to bring the company to this position, including a 17% or $0.46 per share drop in Q4 revenues. These poor financials have led the company to cut its quarterly dividend to $0.01 form $0.043, this is expected to save the company $39 million in 2014. Another factor may be the recent announcement by Sherritt to disinvest its coal portfolio, what was once the companies largest segment will now be sold off to two different companies for $946 million.
Cenovus hit rock bottom on February 18 when the stock hit a new 52-week low of $28.25 as investors were quick to show their dissatisfaction with the company’s Q4 and year-end results. While revenues were up $1.8 billion from last year, spiraling “product procurement” costs have eaten away at its bottom line. This led Cenovus for the second year in a row to post a dramatic drop in its net earnings, closing 2013 with $662 million in net earnings, down from $995 million in 2012 and $1, 47 billion in 2011. This drop in stock price comes days after being named a “top 25 dividend stock” by the Canada Stock Channel. Analysts remain divided on the company with target prices varying between $25.40 to $38.50.
It’s Groundhog Day all over again as Bombardier posts a 52-week low for the second week in a row, hitting $12.70 on February 20. The fallout from the CSeries delays continues to unsettle investors, who have not seen enough from the company to reassert their trust. It seems a decision to shift some of the announced 1,700 layoffs to Mexico was not enough to change the view of the company. If the CSeries delays were not enough, new top business jet company Gulfstream posted over $1 billion more in business jet revenues in 2013 than Bombardier.
Foolish bottom line
The market is full of highs and lows and savvy investors know when to jump on a good deal. A bad week for companies could actually turn into an opportunity for investors to jump in at bargain prices. It can also mark a dark turn for a company that may be months or years away from being worthy of a place in your portfolio.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Cameron Conway does not own any shares in the companies mentioned.